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[Method] TK's Car Cards - $XXX,XXX/year - Part 1

Discussion in 'Offline Marketing' started by TheTK, Sep 10, 2013.

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  1. TheTK

    TheTK Registered Member

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    ---- THREAD CLOSED 09/11/2013 ----


    TK's Car Card Method


    Table of Contents


    1. Intro - Background of the method
    2. Synopsis - Focus on the method
    3. Step by Step - Hand-held guide through set up
    4. Twists - Experiments I tried that sold (Coming in Part 2)
    5. Sales - My premade tactics, documents and reports to help sell (Coming in Part 2)
    6. Scaling - How to scale the model (Coming in Part 2)


    Intro:


    Back in 2005 I used this method paying my way through university, while I've moved on to a more successful career as a advertising consultant (yes an over paid middle-man I'm like a meathead1234 but for adspace), this is the method that really got my life started and brought me the profit I needed to loosen the reigns of bills and banks and begin to explore the business options in my life. I was sitting in an entrepreneurship class when my business professor first caused me to have the idea, he mentioned that far to often we over think our business strategy and what it really comes down to is finding a simple pain-point that a customer has, something that eats up their time and money but is so small that no one else solves it.


    He went on to tell us the story of the man who makes coffee lids. Coffee lids are this interesting product because they are an after thought. Previously no one sold just lids, there were people who sold cups and included lids but no lid manufacturers, they designed cups and lids were just an add-in, so naturally they were crap. They'd break, they'd leak, they wouldn't insulate well and so one gentlemen came along and designed a better lid, that's all he did be made coffee lids. No cups - just lids; and in solving that problem he got a contract with ever cup seller and became richer than all of them as he focused on a pain point.


    That's what this method is all about, it's simple, it's sweet but it solves a real pain point and that is why people will pay; and now that it's no longer something I actively do it's time to hand this method down to the next generation of entrepreneurs.


    Synopsis


    I'm sure you're familiar with the "thanks for your business" and "Happy Holidays" cards you get from car dealerships? It's a common practice aimed at boosting customer loyalty. On average a car dealership may send you one or two, but after that they stop and become forgotten. It's not like they are a big cost to them, they are just an inconvenience as it's a member of their staff that has to sit down and do it.


    We're going to change that. We are going to offer a service that sends out these cards for the car dealerships.


    Let me explain why car dealerships! The average car dealerships (at least those polled in my region) sell on average 20 - 100 cars a month depending on their size. The average between that spread is somewhere around 30 - 40 in my experience; and what's important to us isn't the margin that they make but the amount they spend on marketing.


    I had one used car dealership tell me that his break down went a little like this:



    While the margin isn't that big for profit (especially when factoring in his time) the important part is that car dealerships expect to spend a lot on advertising (and make a lot of their profit from service repairs and repeat business). Which is what makes them the perfect target for this method.


    You are going to offer for $175 per customer you are going to send that customer post cards for the next three years (don't worry it's way less time commitment than it sounds).


    You will buy in bulk "thank you cards" you'll hire someone with good penmanship for a few hours a week at minimum wage (to start you probably won't need more than 4 hours a week). You'll set up a series of 36 boxes, 3 for each month of the year, and after selling the dealership you'll have them email you a weekly list of everyone who bought a car that week, and for each purchase you'll have your employee sit down and write out all six cards and place them in the appropriate months. On the first of each month you'll take the right box to the post office and mail out all those post-cards.


    Step by Step Guide


    Step 1: Bulk Cards


    One of the first things you are going to want to do is get your bulk cards there are a number of places you can check out for this:


    Code:
    http://www.postycards.com/
    http://www.dollardays.com/
    http://populargreetings.com/
    http://www.harnelinc.com/
    

    Or just search "wholesale greeting cards" "wholesale holiday cards" "wholesale thank you cards" etc in Google and find a place that works for you. You are going to find cards that are anywhere from $0.25 - $2 depending on the amount you buy and the quality. Obviously the quality comes down to the type of car dealership as well. I've got some pretty posh neighborhoods around me and so $175 a customer and $2 card stock works for me, but it may not work for you and that's ok. Here is a quick sample spreadsheet of your profit margins:


    [​IMG]


    This image is a quick mockup and errors on the side of caution by assuming you are mailing with USPS First-Class Mail with next day delivery (which you should never have to do). It assumes you are paying your employee $10/h and that they are fairly slow. Once again hopefully a situation that you never find yourself in, but in a worst case scenario even if you had both of those high costs and needed the expensive card stock, or needed to play around with your price, you'd still make plenty of profit per customer.


    Step 2: Card Content


    So you are probably wondering "Hey I've got six cards for the next 3 years, how does this play out?"


    Here's what I recommend:


    First card is a "Thanks for your business card", that should be send out in the month after their purchase, so inside the card write:



    Then 2 cards will be oil change reminders (it's important to note if that car dealership sells oil changes, if they do be sure to promote it. These cards should be sent out 6 months from purchase date and 12 months from purchase date



    The last two cards will be christmas cards (pretty obvious when they should be sent out) and depending on how politically correct or religious your region is may read:



    Bonus: There are some car dealerships that you can upsell to an additional card if you know their buyers are on a lease. The average lease term is 36-months (3 years), which *gasp* is exactly how long our service helps to keep users on the hook for. The 7th card would look something like this:



    Now it is important to note that some car dealerships will find the last one too pushy which is why I don't included it as standard. But when selling car salesmen you'll quickly pick up on which ones will find the tactic favorable.


    Twists
    Coming in part 2 if there is enough demand


    Sales Documents and Tactics
    Coming in part 2 if there is enough demand


    Scaling
    Coming in part 2 if there is enough demand


    Quick Tips


    1. You MAY need to play around with price, not every dealership has the same sales flow, ad budget, or margin; but always start high as you can always lower a price but never raise it.


    2. Check out the 7878 mailing method as it could be a great way to help you sell some clients: http://www.blackhatworld.com/blackh.../354896-22-letters-17-000-profit-3-weeks.html


    3. At the same time, don't be afraid to get out there and sell. Car salesman are used to face to face negotiation and sales, and engaging them on their front will help strengthen your cause.


    4. I can't legally encourage you to pay your handwriter under the table. But I'm also not going to tell you not too.


    5. Yes. Yes you do need someone to write the cards for you. Yes, grandmothers do work great (and cheap).


    Worst Case Scenario Math


    In everything I do I like to include some "worst case scenario math". In a worst case scenario, if I only sell a fraction of what I expected, if my costs are at their highest points, my profits are low and nothing is working out was it still worth my time?


    Most of you probably have a huge number of car dealerships in your region. More than you can think of off the top of your head. But for our worst case scenario math lets say there are 10 SMALL car dealerships around you, let's say you only manage to sell one of them. Your costs are high from the spread sheet above, and you had to drop your price to $100 per customer to make the sale.


    ($100 sale - ($22.50 cost ) * 20 cars a month) * 12 months
    =
    $18,600/year


    So if you sold one small car dealership who did 20 cars a month, and you only charged $100 per client and had a large cost you'd still make $18,600/year without much time commitment.


    So hard is it to go out and sell people on this model? It's not. Car dealerships are notorious for investing money in all sorts of crazy gimmicks. Wild wacky-waving inflatable tubemen, giant inflatable rooftop ducks, "buy a car get a hotdog", they'll stop at nothing to sell and quite frankly don't always have the best ideas. So if you try and sell it to enough car dealerships you WILL get a buyer and you WILL make money with this method.


    FAQ
    I'll add to this section as questions get asked in the thread


    Why did you stop this method?


    This is a question you should ask any time you hear someone talk about a method they used to do, if it's so good why stop? This started out as a way to pay bills and school for me, and it worked and it worked well, and it gave me a good income (which I stupidly blew through quite a bit on parties and things I didn't need, and plenty of much more outlandish business concepts which I now call 'learning experiments') but at the end of the day my passion has always been the ad business and once I got out of school and started working full time at an agency I downsized my card operation (to be fair I didn't scale it that big in the first place, wasn't my focus). But eventually I got out of the agency gig and work for myself making more money than I did from cards, doing what I love. Each day I get to wake up and talk till I am blue in the face about the psychology of ad design, and negotiate placements and critique pieces and copy etc and its both profitable and a blast. At the end of the day I'm sure for some of you money will make you happy enough that it can be the main focus, in which case scale this puppy the sky is the limits! But for some of you this will be a stepping stone to get to doing what you love, and I totally get that, that's how it was for me.


    Do used car dealerships do this?


    Not as much as new car dealership, it really depends on ad spend and budget. I've worked with a used car dealership on it before, but you're probably better off trying to sell to new car dealerships, the ritzier the better, because those are the dealerships that are already doing this and having their salesmen write the cards and they HATE it.


    How Should I Handle Billing?


    In most situations I use freshbooks, but you may find that car dealerships, like many other brick and mortar businesses, would still love to cut you a cheque.


    Can I write about this in my blog/e-newsletter?

    Sure just reference this thread, spread the bhw love a little!


    Can I use this in my WSO?

    No; and I hate you. Share it for free or don't share it at all.
     
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  2. DarkPixel

    DarkPixel Jr. VIP Jr. VIP

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    Now this is something outside the box, and nothing like anything I have seen shared here. +repped, pretty interesting stuff :)
     
  3. ucozer

    ucozer Power Member

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    Do you think this will work outsite the USA .

    In Romania for example ?

    Thanks
     
  4. TheTK

    TheTK Registered Member

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    I guess it depends on car sale volume and how much they expect to spend on advertising when selling a car. You'd obviously need to re-work the price as it's a different market, but there is no reason why the concept couldn't be applied if tweaked.
     
  5. kristian013

    kristian013 Newbie

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    Thanked :)
    Waiting to see the next posts!
     
  6. nesterdwarf

    nesterdwarf Regular Member

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    Any reason for the generic cards instead of custom printing them with the dealer's logo/details? Seems like that option would add value and you'd be able to include a set-up fee that could be discounted as part of getting the sale. Even going with a custom letter-sized postcard in the smallest possible order size of 100 pcs. would cost ~$0.70 ea, nowhere near $2/card.

    Definitely interested in Part 2.

    ND
     
  7. TheTK

    TheTK Registered Member

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    That's actually one of the twists I was going to talk about in part 2 but

    $2 is very high-end card stock with gloss and great color. Most times I bought stuff in the $0.50 - $1.00 range and $2 was reserved for if I had a really high-end client. The reason I wouldn't do custom for each dealer is mostly for logistics.

    You can drive the price of your cards down by buying in bulk with the same card for each dealer, and it's easier for your writer to go "ok I need 2 christmas cards and 2 normal cards and 1 thank you card" each time rather than I need "these for dealer x" "I need these for dealer y" but depending on your set up you can certainly get creative with it and go for the custom cards.
     
  8. GreenHustler

    GreenHustler Junior Member

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    $175 for writing 3 cards... am I missing something? Why would they pay almost $60 for you to write a single card that would probably take less than a minutes work? Sorry if I'm being daft - bit tired at the moment.
     
  9. mickyfu

    mickyfu Jr. VIP Jr. VIP Premium Member

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    Because they don't. Please correct me if I am missing something, but I learnt about mail merge when I was roughly 14 some many years ago, is this something that businesses cannot do anymore?
     
  10. nesterdwarf

    nesterdwarf Regular Member

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    I think the concept has more to do with the psychological aspect of hard-written vs. printed correspondence, plus the benefit of scheduled contact with the buyer. Think of it as an offline autoresponder. One out of ten return buyers would cover all the costs for the ten, and that wouldn't include any service visits.

    ND
     
    Last edited: Sep 11, 2013
  11. vivalafeva

    vivalafeva Supreme Member

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    Im very interested in part two, I also am just questioning whether dealerships would pay that. I live in NYC, where car dealers are definetley doing well and I find it hard to believe. Either way its a good method, that even with much smaller margins would work!
     
  12. thedorf

    thedorf Supreme Member

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    Wow, you are getting these guys to pay you and give you leads? That's cool. I'd be happy just getting the list of buyers, really.

    Unless you have some no re-use clause which might be a bummer.
     
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  13. TheTK

    TheTK Registered Member

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    Bingo, these are hand-written cards with hand written envelopes. It's a much more friendly approach and its something that car dealerships actively do, you are simply off loading the work (also to the other fellow it's not 3 cards, it's 6; and it's framed as "3 years of continued service"). From the outside it looks like you keep organized point of contact with a buyer for the three years that they are in that lease which means they are more likely to come back to that same dealership (and part of the sales documents that I'll show in the next thread is a study that helps outline why).

    But it's all in how you frame the sale, you aren't writing cards, you're maintaining a three year relationship to increase return sales and save the car sales team time. If the client comes in and gets their next car from that dealership because of the positive image of this service helps them feel then they've easily made back their investment. It's about promoting your brand positively for repeat business so that you are first in mind when they need a new car, this has nothing to do with the cards.

    I think you'd find that the car dealerships that are doing well would be the ones to jump on this as their margins are higher and they probably compete heavily in customer care services. As I said I live in some pretty ritzy neighbourhoods so you may have to play with the price to find what works for you, but as you see in the "worst case scenario math" even one small dealership at $100 for the 3 year service package can make you nearly $20k/year

    They aren't giving me leads, they are paying for me to send those cards to the customer on their behalf so that the customers come back to them and buy their next car there once their 3 year lease is up.

    But yes you're right this means I do have very detailed lists of regional car purchasing trends with peoples names/addresses attached, and no I can't sell that information to a third-party but I've found otherways to re-monetize it over the years myself. As data is a very powerful thing.
     
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  14. vivalafeva

    vivalafeva Supreme Member

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    very interested in the sales tactics portion of this, I used the be the kid selling comedy tickets on the street in highschool so I dont fear talking to people, but have never done any selling like this before. My assumption is that little things would help, like dressing well, and bringing a short presentation on an ipad or something as well.
     
  15. TheTK

    TheTK Registered Member

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    For sure, dressing like you belong is actually kind of important when you deal with individuals in an aggressive sales vertical but it's also how you frame the sale.

    Focus on the difference between:

    "Oh yeah I'm going to write 6 post cards for your client"

    and

    "Over the next three years of your clients car lease, I am going to help to maintain a relationship with them with hand-written notes at holidays, and oil change times, to help boost your brands relation with them so that you are front of mind when they come in for their next lease. This is something you're paying your sales team (or other staff) to do anyway and something we can do cheaper to free up their time for more important tasks."

    It's not 6 cards their paying for, it's a 3 year relation boosting commitment, and that's got to be worth a measly $175 ;p
     
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  16. mickyfu

    mickyfu Jr. VIP Jr. VIP Premium Member

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    unless I am miss reading, as I cannot really be bothered reading all the thread. You state profit on car $1000 and cost per customer $175, so the dealer would be down $750 if 1 out of 10. Unless I am wrong, it is as though you are just making figures up.
     
  17. tiagorossi

    tiagorossi Junior Member

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    very great stuff! thanks very much
     
  18. searchwiser

    searchwiser Regular Member

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    How many Car Dealerships did you come across that already did this. It seems all the dealerships Ive dealt with in last 5 years did this.
    But another twist is lawyers and I also get these from a few lawyers Ive dealt with in past several years.
     
  19. nesterdwarf

    nesterdwarf Regular Member

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    I was using the 'worst case' figure that the OP had posted ($100/customer x 10 customers=$1000) and his used car example ($1000 profit/car) to break even.

    ND
     
  20. TheTK

    TheTK Registered Member

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    You are missing something. You are NOT trying to convince him to spend $175 out of his profit, but rather re-allot $175 he is already spending on advertising. You're not trying to get him to spend more money, just trying to get stuff he is already spending and switch over to you. That example was also a USED car dealership meaning their margins are a lot smaller and was an example to point out that you want the money from their advertising funding not their profit margin

    90% of them do this already and that is GREAT. Because when they do it - they HAAAATE it. They don't want to spend time at a desk writing this crap, they want to get out and sell. So they are happy to unload it. If they are doing this already then they are already half sold they KNOW this method is useful to them. You just have to convince them that time is money!

    Do you want to save your valuable time and sell more? Yes? Let me take care of the cards you were already doing AND do it for a longer period of time.

    There are a few that turn around and say "I'd love to unload this on to someone else but it's a little pricey" and look at your profit margin, plenty of room to negotiate, so drop the price down if you need to. Crap worst case you're making kickass pocket change.

    Also sidenote I avoid selling to lawyers, they are a handful and they all have associates and paralegals to take care of this kinda stuff. But real estate might work if you did it longer term and with something bigger than just a card
     
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