If I were running a car dealership, I'd modify a good deal of my advertising budget to target the best prospects rather than shooting blindly and hoping for the best.
While I concede that some general advertising is necessary to bring bodies into the showroom, I'd shift 50% of the advertising dollar into past buyer and future prospect mailings. Since lists are available (from the dealers, the motor vehicle administrations, and companies such as R. L. Polk which specialize in automotive lists) that will target specific type of car buyers, I'll select the best prospects to buy my cars. And then I'll mail to the best 5,000 or 10,000 each month to entice them to come in and look at the new cars.
Assuming full well that people buy cars only every 3 or 4 years, the mailings will also highlight my service and body shop departments so I can catch people not only when they are ready to buy, but also when they need service and repairs. Since a car dealer is traditionally more expensive than most small garages, the mailers (probably 2- or 4-page newsletters) will talk about the advantages of using mechanics who are specifically trained to work on a particular type of car. I'll also stress that we have a huge inventory of parts to quickly replace any needed parts. And since we also have a used car lot, I'll convert some of the cars to rental units that the repair people can rent while their own cars are being serviced.
As for selling the new cars, I'd use direct mail to build a relationship with prospects and past buyers. Yes, I'm probably going to be slightly more expensive than the competition. But the buyers will get more for their money -- better access to the salespeople after purchase, better access to the service people, even a special -- private -- number to call if there's a problem that is not being resolved properly. Granted, every other dealership has this service. But my prospects and customers will be constantly reminded of this through our mailings, and will see these as our strong points and assume that we go above and beyond what the other dealers offer.
The overall cost for this marketing effort (which can be scaled up or down depending on the dealership's needs and size) should be $5,000 per month (based on 10,000 mailers going out and additional in-house costs for phone lines and phone calls to keep in touch). That's about 25% to 30% of a dealership's overall advertising budget. Much of the cost should be covered by cooperative advertising budgets, and the entire cost should be offset by an increase in number of cars moved off the lot, additional service business, and more body shop work in the future.