Automotive Direct Mail Case Study. Canada Post:

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1 Canada Post: Automotive Direct Mail Case Study Addressed Admail Campaign Drives Customers to Auto Dealerships Market-research study demonstrates the power of direct mail

2 Study confirms that Addressed Admail campaigns boost dealership visits and stimulate additional sales and leases of new vehicles. This campaign and market -research study clearly link direct mail, majormedia advertisements and increased sales of new vehicles. Gary Dender Account Executive Canada Post The market for new vehicles in Canada is massive more than 1.5 million are sold or leased each year. Not surprisingly, such a lucrative market inspires fierce competition among manufacturers. The automotive industry is one of the largest advertisers in North America and spends more than $1 billion annually in Canada alone. Manufacturers invest the vast majority of these dollars in television, radio, newspaper and magazine ads. Although these campaigns tend to be expensive, they are an effective way to reach large, general audiences. The issue of saturation is a constant problem for auto companies, says Gary Dender, a Canada Post account executive in the automotive sector. To make a lasting impression with potential customers, manufac turers try to break through the clutter in a number of ways by offering discounts, for example, or by creating memorable ad campaigns. Advertising new cars and trucks is a joint undertaking that involves manufacturers and dealers. Manufacturers tend to pay for national campaigns that help build brand awareness, while dealers either individually or in regional associations typically handle smaller campaigns to promote special sales events or target specific markets. According to Dender, both groups deliver the same message: visit your local dealer. Customers buy or lease new vehicles at dealerships that s where deals are closed, says Dender. The goal is to get potential customers through the door; then the experts take over. Many dealerships are able to convert more than 20 per cent of all visits into sales and leases. 2

3 Using direct mail to boost dealership traffic Despite direct mail s proven ability to reach specific groups of potential customers, the automobile industry devotes less than one per cent of its advertising budget to the medium. Part of the reason is the differing perspectives of manufacturers and dealers. Manufacturers want to reach large, general audiences, while most dealers target geographic areas rather than specific consumer groups. In 2006, Canada Post took advantage of a valuable opportunity to demonstrate the advantages of Addressed Admail service as an effective complement to a major automotive campaign. A manufacturer re-launched a popular model with a national multimedia advertising campaign across the country. The company turned to its trusted partner Canada Post to deliver the direct mail component Addressed Admail service. Canada Post offered to conduct a market-research study to gather valuable market intelligence and provide hard data about return on investment a crucial consideration for advertisers. Testing the theory with Addressed Admail service A list was compiled of 300,000 customers who had bought or leased the manufacturer s vehicles three or more years ago. These qualified leads were sent colourful brochures via Addressed Admail service. The brochures described the new model, highlighted particular features and encouraged people to visit their local dealers. No special offers or discounts were included. Advertising roadblocks Saturation: Every day, consumers are inundated with dozens of automotive advertisements on television and radio, in newspapers and magazines, and on billboards and other media. Breaking through the clutter is difficult. Uncoordinated campaigns: For best results, manufacturer and dealer campaigns should feature similar timing, style and content. TM Trademark of Canada Post Corporation 3

4 The qualities of Addressed Admail service targetable, measurable and unobtrusive make it a perfect complement to major-media campaigns. The market-research study involved telephone interviews with more than 1,200 individuals divided into two groups of previous customers. The first group had been sent copies of the brochure; the second (control) group had not. The study assumed that both groups had relatively equal exposure to the national multimedia ad campaign. During the telephone interviews, members of each group were asked the same series of questions: were they aware of the re-launch, could they name any attributes of the new model and did they intend to visit a dealership within the next few months. Addressed Admail service increases return on investment Group Number of people interviewed Percentage planning to visit dealer Expected increase in vehicle sales (percentage) Addressed Admail Control (no Addressed Admail) More than 600 More than Boost from Addressed Admail

5 Results demonstrate effectiveness of Addressed Admail service The results of the interviews confirmed the value of Addressed Admail service in support of a major-media campaign. Interviewees in the Addressed Admail group were significantly more likely to be aware of the model s re-launch and to name some of the vehicle s key attributes and features. In particular, the Addressed Admail group was more likely to describe the new model s safety and performance features crucial feedback for the manufacturer. Most importantly, members of the Addressed Admail group were 37 per cent more likely than those in the control group to have plans to visit a dealer in the next few months. Based on these results, researchers predicted an additional 20,700 visits to dealerships over a 12-month period an increase of 4,200 vehicles sold or leased. Actual sales figures for the 12-month period following the mailings, however, indicate a sales increase of 4,800 vehicles, suggesting that the campaign s impact was even larger. The bottom line: each dollar invested in the direct-mail campaign yielded an increase of more than $350 in sales. The Addressed Admail advantage The market-research study also demonstrated that Addressed Admail service had a positive effect on other elements of the manufacturer s ad campaign. Interviewees who had received the brochure were better able to recall both with and without prompting details of the television advertisements, for instance. The Addressed Admail campaign also influenced decisions about where to turn for more information about the new model. When asked where they would seek more details, members of the Addressed Admail group were significantly more likely than those in the control group to mention dealerships the overarching goal of the entire campaign. The study proves that Addressed Admail has a measurable and positive impact when used to support a major advertising campaign, says Dender. Investments in well crafted direct-mail campaigns generate significant returns. People who received brochures via Addressed Admail service were 37 per cent more likely than those in the control group (who did not receive brochures) to have plans to visit a dealer in the next few months. 5

6 About Canada Post Canada Post is a leading provider of direct mail and other targetedmarketing solutions. Businesses, charities and other groups use Addressed Admail service to promote their products and services to leading customers and prospects on a targeted and personalized basis. For more information, please visit or call