“We need more apps. Let’s offer a promotion next month.” No doc fee, extra points, no payments until, promotional giveaway and more are at your disposal to turn the head of vendors and/or brokers. Promotions can be a component of a very effective marketing effort. In fact, most captives offer regular incentives and have for years while vendor finance companies are less strategic in doing the same. But we caution you around “throwing one together” and instead developing a promotion strategy.
Keys to a successful promotion strategy:
- Measure: I can’t tell you how many times we work with vendor finance companies and they can’t tell us how successful a promotional campaign performs. They “feel like” it works. This is silly folks. Each promotion should have a plan of messaging, communication strategy, tracking and full P&L associated with the effort. No exceptions to this guys, this is just good business.
- Mix it up: With so many promotional incentives available to you, it is important to mix your strategy between popular promotions that you offer year after year and new promotions. For example, if you do really well with a “no payments until 20XX” promo every year, celebrate it. Build excitement about it and momentum toward it… “Our no payments until next year program is coming October X, 20XX”. Use your signature promotion as the cornerstone, but then try new offers throughout the year.
- Be creative: Remember the goal is to connect with people, not to give away margin (even though most of you are baking the financial incentives in the deal somewhere). Not every promotion has to be about lower rates, increased fees or skipped payments. How do you really drive volume? New dealers. What if you offered a Visa Gift Card for every participant in a Webinar where you spoke about “Financing your customers in a post GE Captial world”?
- Be consistent: Of the 2 biggest mistakes vendor finance groups make with promos, this is one. You throw one together and it “seems to work a little” and then it could be another 4 months or 2 years until the next one. Consistently offering a good promotion, even 2x per year, is important for success of the effort.
- Don’t be a one trick pony: This is the 2nd big mistake Promotions, as effective as they can be, SHOULD NOT be the extent of your outreach to the market. Promotions are the component of a comprehensive marketing strategy…not the entirety of your marketing strategy. If all or most of what you do with regard to marketing are promotions, you come off a little too gimmicky. You want people to choose you because of your significant differentiation in the vendor finance space, not because the McRib is back.
If you ever wanna chat about how to develop a real promotions strategy, give us a holler.