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McDonalds does it. So do Sears, Nabisco, Bank of America, every professional sports franchise, and now your corner restaurant. Do you?

We are talking about building a database of customers and prospects for your dealership. Like it or not, consumers are changing the way they buy cars. More and more of them are doing research before they shop, using the Internet to find out what invoice costs are, available options, rebates, lease terms – even pre-qualifying for an auto loan before they hit the dealership.

Gaining an edge over your competitors is no longer a simple matter of outspending them on advertising. Today’s competitive market rewards the dealers who obtain the best value from their advertising campaigns. Simply put, a dealer must convert more floor traffic into sales.

While many dealers consider “be-backs” to be a myth, more and more they are realizing that the proverb of someone buying within 72 hours of hitting their first lot is losing its ring of truth. If there were a way to convert even a small portion of the 70-80% of an auto dealer’s floor traffic that won’t buy on the first visit into sales, while at the same time strengthening relationships with all customers, the benefits to that dealer would be tremendous.

There is now an economical way to do this, while at the same time building that important database and reaching people who are still doing their online research. It is called email marketing. Combining the efficiency of the Internet for delivering high-impact email with the power of strategic database marketing yields exceptionally high returns for dealers who are willing to accept the new market realities.

More consumers have email access than ever before, and that number is growing by the thousands every day. More importantly, surveys have shown that consumers prefer that correspondence from companies be delivered via email versus traditional postal mail or telephone.

At the same time, the number of unsolicited commercial email messages is growing and becoming a controversial legislative item, with federal and state legislatures targeting this type of email marketing for civil and criminal punishment.

So what is a dealer to do? There are two options: forego email marketing and lose market share and future competitive advantage, or embrace email marketing as a powerful tool and use it appropriately.

Those who choose to gain the advantage and begin marketing via the Internet must assemble their own proprietary database of interested consumers. This eliminates any potential “spam” problems and generates a significant marketing asset.

How does a business build that database? Here are several possible answers:

• The Internet – many people now check a dealer’s site before they leave their home to shop for a car. Every car dealer should have an area on their main page that offers visitors an opportunity to sign up for additional information. What is the point of driving traffic to a website if you are not making a sale or getting contact information?

• Telephone leads – often buyers will call a dealership before visiting dealers. They may be shopping price, checking availability, calling from an ad, etc. Whatever the reason for their call, they should be offered the opportunity to receive additional information and updates via email.

• Showroom visitors – dealers are fortunate to convert 30% of their showroom traffic into closed sales. The other 70% of the potential buyers walk away. Some simply can’t afford a vehicle or qualify for financing. Some are planning ahead. Some just weren’t sold. No matter the reason, all of these people should be given an opportunity to receive updates, news and promotions via email.

• Current customers – most dealers have some type of program in place, whether it is service reminders, customer surveys, anniversary greetings, etc. Too often, the only time a customer hears from the dealer is when the dealer wants them to come in and spend money. Parts and service customers frequently hear nothing from the dealers at all. Every person who visits the dealership should be offered the opportunity to receive future news, financing offers, important maintenance tips, new model announcements and incentives via email.

• Referrals – people tend to talk about their most recent vehicle purchase with all of their friends and relatives. It is, after all, an important event for many people. One of the key advantages to email is that it can be forwarded to family and friends with a click of a button. A good newsletter with valuable coupons and incentives can be forwarded from your prospects to other interested parties. This is known in the Internet marketing industry as “viral marketing” and can be extremely effective.

How you position your offer of email updates will determine a dealer’s success in obtaining email addresses. Training the salespeople is crucial to successfully building a database.

If a salesperson simply walks up to a consumer and asks, “Can I have your email address?” the answer will usually be NO. However, if a salesperson casually suggests that the dealership often has unadvertised specials that are emailed to a select group of VIP customers, the odds of obtaining the customer’s email address increases substantially. The same is true on the phone, on the Internet – even in mass advertising!

Dealers may consider offering incentives to join this “VIP Internet Club” by having monthly drawings, offering discounts and coupons in the emails, sending redeemable gift certificates or any number of incentives. It is a very good idea to include some type of incentive or promotion in the emails that is not available to the general public – providing true value to your VIP group.

Many dealers ask about buying lists of email addresses from a certain geographic area or targeted database. This is where we begin to run into “spam” problems, where the dealer is basically sending an email advertisement to prospective parties.

The best email addresses are those that are obtained from truly interested parties. These are the people we outlined above. Yes, you will begin with a small list and work your way up to a larger database, but your response rates will be higher. Built correctly, this database will grow and its yields increase over time, providing both short-term and long-term benefits to the dealer and the customer alike.