Direct Hit for Direct Marketing

AutoNation Inc. is expanding its direct marketing efforts with the help of a high-tech digital printer developed by Xerox Corp.

The iGen3 allows the nation's largest dealership chain to group its customers into 62 different segments, then print and send customized messages to them through direct mail.

Direct Mail Express and client AutoNation are fine tuning marketing initiatives using two of the new printers.

The results are fascinating, says Scott Zientarski, AutoNation's director of database and direct marketing. “The day of mass customization is really here.”

AutoNation has increased its customer retention in both sales and service from approximately 10% to nearly 17%.

Dealers have used direct mail marketing for years by compiling a list of names and addresses, sending out a mass mailer and hoping for a 1%-2% response rate.

The elusive goal has been making direct marketing really direct. Typically, changing any part of a printed piece requires new film and plates for the printer — a costly process. It was more cost effective to send out a mass mailing, and hope to see some return.

Because the iGen3 is digital, AutoNation is able to print different pieces one after another during the same run, Zientarski says.

Young parents could receive a minivan promotion while people in their 40s could an get offer promoting luxury sedans.

AutoNation also created new marketing initiatives that increase work in the service department to offset reductions in warranty work caused by improved vehicle quality. For example, oil change reminders are sent only to customers needing oil changes, while transmission reminders are sent to customers potentially needing transmission service — all in the same mailing.

AutoNation increased its service revenue 4.3% this year, although new-car sales have dropped, says Zientarski‥ Usually, a sales decrease will mean a drop in service work.