How to Bring Them In

What makes a successful ad campaign? The answer is easier than you might think: knowledge of your customers.

The first step before you start spending valuable ad money is to study your customer base. You should have research tools available that tell you the following:

Once you know who your customers are, you will know which media is best for advertising and what you should feature in your ads.

Selecting the right ad medium is vital to the success of a campaign. If you have a younger audience, the local daily newspaper may not be the right place to spend your money. Newspaper readers are generally 50 years and older, so you might want to consider a contemporary radio station or TV shows that skew to a younger demographic.

Assuming you have selected broadcast as your media outlet, you must have enough reach and frequency to be successful. Your advertising agency or the media representative at the station should be able to run a “reach and frequency” report, so you can be assured of having enough advertising for the campaign to work.

The reach represents the percentage of the market you will hit and the frequency tells you how many times the average person in your desired demographic will likely see or hear your commercial.

The rule of thumb is that potential customers need to see or hear your message at least three times before they are likely to respond. So if you don't have at least that frequency, you will probably fail. You must also have enough reach to connect with enough people in your market.

Talk to your ad representatives about this and look at the various alternatives. You will see that there is a way to buy media that will increase your chances of success.

Now that you know where to place the ads, you must develop them. Some dealers try to stay away from price wars in their ads. Rarely are these dealers the top ones in their market because it is a proven fact that customers are going to make a purchase where they think they will get the best deal.

Price shoppers are smarter than ever. They know what they want to pay for that vehicle.

Most of them know what your invoice is on that car, and they know what the hold-back and incentives are. If you are not offering a great deal or the appearance of one, consumers are more likely to go to elsewhere.

The days of advertising way below factory invoice are quickly coming to an end. Japanese auto makers now are requiring that their dealers not sell under invoice.

Domestic auto makers are still letting dealers advertise any way they wish, but customers are becoming immune to these absurd below-invoice prices.

So what is the answer when pricing a vehicle for an ad?

Offer “loss leaders,” but limit them. Don't put every car in your inventory at this price, otherwise you won't make any gross. Put enough of these on sale to let the buyers know that when they get to the store, they have a good chance of getting that vehicle at that price.

To be effective and have ads that stand out, the ad price should be a front-end loser, and hopefully you can make it up in back-end money and volume. Smart pricing of your inventory will help you put more money on the bottom line and assure you of a successful ad campaign.

Media advisor Tom Letizia is founder of the Automotive Marketing Group concentrating on the automotive industry nationwide.