Email marketing can work well if you know the ins and outs

Email marketing campaigns can help a dealership — if you know what you're doing.

Consider the response rate results from an email marketing campaign by a Texas dealership, Richardson (TX) Toyota, in conjunction with MyCarPage.com.

The dealership emailed 1,044 customers a service coupon. Two types of emails were sent. In one, 476 customers received a coupon with a survey attached. Only eight customers responded by completing the survey. Another 588 customers received emails that required them to complete the survey before receiving the coupon. Interestingly, 118 of these customers completed the survey.

A total of 126 customers completed the survey, and out of those, 70 customers redeemed the coupon before the three-week expiration date. Of course, not every email campaign will generate those kinds of numbers, says Michael Moskowitz, president of MyCarPage.com.

Research does show, however, that a targeted email campaign can result in anywhere from a 5%-25% response rate. That compares to 1%-2% from direct mail.

Mr. Moskowitz says 1,000 emails are worth approximately $8,000 in revenue. That figure varies depending on what's promoted and who's targeted.

But he notes, “Email marketing is not going to replace direct mail and it certainly isn't the answer for every customer. Dealers need a combination of both.”

Tom Vann, a Chrysler dealer in Hillsdale, MI, now relies only on direct marketing and email marketing. He considers his database, with 35,000 email addresses, as one of his most valuable assets.

There are obstacles, though. One of the biggest, says Mr. Moskowitz, is that dealers often don't have the email addresses and don't know how to get them.

There are a variety of ways to collect email addresses. One of the best is to get them from customers whenever they're in contact with the dealership, says Michael Sweigert of PureDealer.com.

That way, the information can be put in DMS systems. Asking for the customer's email can be easily incorporated into the process whenever a customer interacts with the dealership in some manner.

Another method is to allow visitors to your web site to subscribe to its areas of interest such as newsletters, recall notices or coupons, says Mr. Sweigert. In the process, get their email addresses as well as other information that would help in a targeted marketing campaign.

It's important to get that other information, such as type of car, age, mileage of vehicle, ages of children.

When you're ready to begin email marketing, the one rule to remember, says Mr. Moskowitz, is to make sure you're sending the right message to the right customer at the right time.

Sending to the right customer includes adhering to the concept of “permission-based marketing.” In other words, have permission from the customer before you email them. Practically, when customers provide you with an email address, they are agreeing to receive emails from you. It is important, however, to indicate just what type of emails you will be sending when you collect the address. Then send only what you said you would.

Another key aspect of “permission-based marketing” is providing the customer with the ability to “unsubscribe” or “opt out” of future emails in every email you send. That makes customers feel empowered and at ease with you. Before implementing future email campaigns, make sure the customers who have unsubscribed do not receive any more emails.

Emailing to large numbers of people without their permission is called spamming. The consequences to spamming can be surprisingly harsh. One disgruntled customer can report you to the Realtime Blackhole Register List (Yes, this list really exists) and basically every server in the world will refuse your emails.

At the very least, spamming risks alienating potential or existing customers.

On a positive note, removing unsubcribers from your email list ensures that you are emailing to very targeted and interested customers.

Mr. Moskowitz says a strong subject line is critical to the success of any marketing efforts.

“A good subject line — one that is descriptive and concise — will have open rates of 30% - 50%,” he says. Chances are those open rates are much higher than they are for the typical “junk mail” your customers receive.

It is also important to personalize the email — always include the person's name. And if you're sending service reminders or coupons, always mention the person's vehicle make in the email.

Creative emails can help. Because of HTML technology, emails can be dressed up with graphics and bold colors. But make sure the body is concise and relevant, Mr. Moskowitz says.

A dealership can also have some fun with its emails, says Mirza Thomas, Internet director for the Washington D.C.-based Jim Koons Automotive Companies dealership group.

They've sent mock ransom note emails to prospective new-car customers.

The offbeat note says, “We have your new car and are holding it for ransom. For now we are keeping it safe: it's fully gassed, clean and polished…We cannot hold this car forever.”

Says Ms. Thomas, “We've received great responses from that campaign.”

Typically, every 1,000 emails from her stores results in 45 customers coming into the dealership.