You must understand your audience in order to do a great job at marketing your product. If you sell pizza, understanding and targeting your market is pretty easy. Statistics show that 93 percent of Americans eat pizza at least once per month. Many eat pizza more than once per month. So if you sold pizzas, you could advertise just about anywhere and hit someone who wants to eat one. Marketing your BHPH operation is nowhere near as easy, and you can’t afford to use the same methods.
Let’s take a look at Illinois, which has one of the largest cities in America as well as some very rural areas. Illinois has more than 4.6 million households. 2.2 million, or 47.56 percent, of those households have a credit score above 700. 1.2 million, or 25.72 percent, of those households have a score between 600 and 699. 563,263 or 12.19 percent have a score of 550 to 599. 577,067 or 12.49 percent have a score between 500 and 549. 316,640 or 6.85 percent have a score below 500. In today’s market, the last two groups mentioned with a score below 550 will work for BHPH. That means your target audience is only 19.35 percent of the population.
That’s a lot of potential customers, but you need to consider what part of that group is in the market at any given time. Typically, 3 percent of your audience — 0.58 percent of the total population of Illinois — is shopping for a vehicle during any given month. Here’s the good news. You can define and target your market. Here is what I’ve learned from some of the BHPH dealers I’ve worked with over the past 20 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 past year. If you’re not already aware, 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 cater to these buyers.
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 with a repo in the past 12 months. In Illinois, 15,871 or 0.34 percent of the market has a recent repo. Now that’s a rifle shot!
2. In the Market
One of the most difficult parts of marketing is hitting the right people at the right time. It’s possible if you know where to go. For example, there were 13,515 consumers in Illinois with a score below 550 shopping for a vehicle. 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 telling them there may be help. Once again, a real targeted rifle shot.
3. Your Entire Targeted Market
You should also consider marketing to your entire targeted market. As we mentioned above, that group is a little less than 20 percent of the entire market. But it’s your group and you need to get the word out to it that you are available to help.
4. Take Good Care of Your Customers
Your current customers likely know others in the same credit situation. 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. The most successful BHPH dealers I know tell me that taking care of their customers is the number one reason for their success.
It makes no sense to market your BHPH operation the same way as a pizza shop does. 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!