Ask Bark: Did I Throw Away The Key To A New Car?
If there’s one thing I loved about spending time in the offices of General Managers and dealership principals, it was hearing about the harebrained schemes they had to bring customers into the dealership. GMs see an average of 80 or more vendors every single month — there’s always a new piece of software, a new way to buy inventory, even a new way to wash the windows. Invariably, due to some combination of pressure to meet unrealistic sales goals and the attractiveness of the sales rep, managers would fall for something that would make me shake my rather large head in disbelief.
The tough part was always maintaining a straight face when they told me about their plans. One of my fondest memories was listening to a GM explain that he had canceled all of his third party advertisers and ordered two Wacky Waving Inflatable Arm Flailing Tubemen. I wasn’t entirely surprised to see that the store was out of business 90 days later.
But one of my all-time, tried and true favorites is the “gypsy sale.” Click the jump to see our friend Greg’s question about these direct mail pieces and whether or not they actually work.
In my area (greater Charleston SC) there is a dealership that will
mass mail keys at least once a year, and wants you to come to the
dealership and try it on a car they are giving away. Another one
mails out a confirmation letter that “YOU ARE A WINNER” and compels
you to come to the dealership to claim your prize.
Why do some dealerships run these corny promotions? Do they ever
really give away any of the prizes (to real people and not to the
owners brother)? Do these promotions actually drive traffic to the
I’ve always wondered, as I threw my key in the trash, if I was tossing
the WINNING KEY!. These goofy promotions actually turn me off of the
dealerships. I just want to purchase a car, not visit a carnival side
Ah, one of my favorite Sunday Stories was based on this idea. I’m sure that all of you have received a few of these over the years — there’s typically some sort of generic-looking key glued to a postcard, with the promise of a chance to win a Brand New Car!!! and some deals that seem too good to be true (until you read the fine print). You probably threw it away, just like Greg did.
But there’s a reason why dealers keep doing them after all these years — they work. Well, kinda.
The biggest problem that the dealer faces with modern advertising is attribution. Back in the day when your local daily newspaper had multiple sections and dozens of pages of ads, it was easy. Prospective customers would see the dealership’s ad in the paper, and they would physically bring the advertisement into the dealership. The sales rep would take the ad and put it in the deal folder to show that the newspaper ad was the lead source. Boom. Done. Easy.
Nowadays? Oh, man. There’s a million lead sources, and it’s virtually impossible to attribute sales to any of them. Why? Well, even though most of them are digital, and should, in theory, be trackable, it’s not that easy. Almost nobody submits leads to the dealership through the web — they just see what they want online and show up at the dealership. (Cue the comments from people who still send emails. You’re the minority.) Therefore, it’s genuinely difficult for even the savviest of dealers to know if what they’re doing for advertising is actually working.
But the postcards? People still bring those in, and in surprising numbers. They typically skew a little more toward toward the subprime side, but that’s fine with most dealerships, because there’s a lot of money to be made in subprime.
The ones with the keys are mostly sent out in advance of “tent sales” by traveling sales organizations, hence the “gypsy sale” moniker. One sales guy I know calls these sales the “Invasion of the Commission Snatchers.” The dealer pays a hefty sum of money, upwards of $40k or more, to an organization who sends out the cards in advance of the sale and then comes in with a team of pre-screeners, sales guys, hard closers, and F&I guys for the weekend. After they write a bunch of deals that are sketchy at best and illegal at worst, they jump on a plane and head out to lay waste to yet another store. Do they sell a lot of cars? Typically, yes, but it’s a pyrrhic victory more often than not.
But to answer your question — yes, sometimes the keys do actually work. In fact, I was in a dealership in your state, a CDJR store in Myrtle Beach, when a customer’s key started a brand new Chrysler 300S right on the showroom floor. Legally, one of the keys that they send out has to work, but when you send out 20,000 pieces of mail, the odds are literally 1 in 20,000. The gypsy sale organizations will sell you an insurance policy if you like — roughly $5k or so — and if you buy it, they’ll cover the cost of the car on the odd chance that somebody wins. If you don’t, the dealership has to cover it.
Well, the general manager at this CDJR store didn’t buy the insurance. And as the local news station came and interviewed the winner, the poor GM just sat in his office with his head in his hands, knowing that it was probably his last day at the dealership. The sale continued, the bell kept ringing, but he was done (And he was right. The owner fired him the next day).
So there you have it. Yes, the postcards work — but often at a terrible price.
[Image: Gretchen Gunda Enger/Shutterstock]
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