Common Sense Marketing Aims Directly At BHPH Customers
What does pizza have to do with buy-here, pay-here marketing? You need to understand the difference between marketing pizza and marketing your BHPH operation and why you can't afford to use the same methods.
Now, let's look at the numbers for BHPH.
For this analysis, we will use the state of Illinois. We chose Illinois because of the great diversification of its population. Illinois has one of the largest cities in America and also some of the most rural areas of the country.
In today's market, you could say that the portion of the population that will work for BHPH would be the last two groups mentioned — a score below 550. That means that your target audience is only 19.35 percent of the population.
You may be excited to know that one out of five people could be your customer. But now you need to look at the portion of that group that is in the market at any given time.
Typically 3 percent of your audience is shopping for a vehicle during any given month. If you take 3 percent of your 19.35 percent, you have a number that is just above one-half of 1 percent. This is where the pizza comes in.
Remember that 93 percent of the population eats pizza at least once per month compared with 0. 58 percent of the total population that will be shopping for a BHPH vehicle during the month. It's quite obvious that the pizza chain can use a shotgun for marketing while you need to use the most accurate rifle available.
Here's the good news. You can define and target your market. Just think about your current customers and carefully look at what you know about them. Since we're not sitting across the table from each other, I'll use some answers I've received from some of the many BHPH dealers I've worked with over the last 25 years.
There's a good chance that a large portion of your customers have been through a bankruptcy.
Using the Illinois data, 32,351 or 0.70 percent of the households were discharged from a Chapter 7 bankruptcy in the last 12 months. If you're not already doing so, marketing to this group is a very good idea.
Just keep in mind that you will be competing with many of the non-BHPH dealers in your market since there are still many subprime lenders that like this group of consumers.
Now here's a group of consumers that have nowhere else to go but a BHPH dealer. There are few, if any, lenders that will finance an individual that has experienced repossession in the last 12 months.
Again, to use the Illinois data, there are 15,871 or 0.34 percent of the market that has experienced a recent repossession. Now, that's a rifle shot.
In the Market
One of the most difficult parts of marketing is hitting the right people at the right time. It is possible if you know where to go. For example, there were 13,515 consumers with a score below 550 shopping for a vehicle in the last 30 days in the state of Illinois. That's only 0.29 percent of the total market.
Most of these people were shopping at the wrong type of dealership and were denied credit. Most consumers believe that all dealerships are created equal, so once they are denied at one store they will not continue shopping. Imagine these people getting a letter from you letting them know that there may be help. Once again, a real targeted rifle shot.
Your Entire Targeted Market
You should also consider marketing to your entire targeted market. As we mentioned previously, that group is a little less than 20 percent of the entire market.
This is not near as targeted as the groups mentioned previously, but it's your market and you need to get the word out to that market that you are available to help.
Take Good Care of Your Customers
"Birds of a feather flock together" is a cliche that we use often in the marketing business for good reason. Your current customers likely live near and know others that are in the same credit situation. Given the small size of your market, you cannot afford to upset even one of your customers if at all possible.
If you take care of your customers they'll take care of you by telling their friends and family. If you don't, they'll return the favor by telling everyone not to buy from you. I promise you that the most successful BHPH dealers I know tell me that taking care of their customers is the No. 1 reason for their great success.
It makes no sense to market your BHPH operation the same way as pizza shops. It takes common sense to understand that you must know exactly what your customers look like and where they live to be the best at marketing your vehicles.
Hitting the right people at the right time with the right message is common sense marketing. I guess we’ll have to talk about the right message in another article.
Good luck and good selling.
Denny Long is President of Credit Mail Experts. He can be reached via email at denny@ creditmailexperts.com.