The goal of any automotive marketing program should be to create INCREMENTAL sales and service revenue via the marketing program.  It is an obvious point, but most automotive marketing programs simply market to everybody, and then attribute every single “response” to the marketing program, not recognizing the obvious point that there are other factors at work that also help boost response, or that many customers would have bought a car or brought in their car for servicing anyways, in absence of the marketing program.  

When one examines simply incremental lift rather than total lift, we find that the relative value of each program measured changes dramatically.  You always want to be able to calculate that, “without this program, I would have sold X cars; with this program, I sold Y cars.”

I write this as I review the “results” from an industry service reminder program, in which the report dutifully reports that mailing service customers a “reminder” generated a response rate of 52%.  Of course, this is crazy – no direct mail program has ever generated a 52% response rate.  The only meaningful metric would be the “incremental” response rate, which would require subtracting out all of the people that would still have brought in their vehicle for service without the program.

I recognize that calculating incremental response rates takes more time and discipline, and can often generate results that are different than what we thought we wanted to hear.  It is also requires the creation of a statistically-pure control group, which is a hassle.  However, in order to get an accurate answer as to the impact of a program, it is the only way of establishing the baseline of how the marketing program is actually moving the needle in generating incremental results.

I’d love to hear any comments you may have.