Two dealerships in Grand Junction, Colo., hope a customer-appreciation promotion will generate nearly $200,000 worth of business for locally owned shops and restaurants in their hometown -- and sell some new cars in the process.
Grand West Hyundai and Grand West Kia are mailing letters to about 8,000 previous customers who may be in the market again, offering them a gift card worth at least $50 to Grand Junction's central business district.
"We'd love to sell them a new car, but it is really a customer-appreciation gesture," said Ken Reeher, the dealerships' marketing and business development manager.
"Instead of these fake little fliers that people send out that have keys that don't do anything, we're sending a minimum of a $50 gift card," Reeher said. "We wanted to find a better way, and we wanted to keep our money local."
Grand West Dealerships, which also operates a tractor store, bought about 3,600 Downtown Grand Junction gift cards totaling $181,000 -- six times as much as the merchants group had expected to sell in gift cards in a year. The cards are good at more than 100 businesses, many of which have put signs in their front window urging passersby to "shop here with your Grand West Dealerships gift card."
"To have a local, professional, automotive dealership reward their customers throughout the region with the Downtown Grand Junction gift card speaks volumes of Grand West Hyundai-Kia's commitment to their customers and their community," said Mike Bell, co-owner of two restaurants on Main Street, the Rockslide Restaurant & Brewery and Dream Cafe.
Aaron Hoffman, Downtown Grand Junction's marketing and communications manager, said the gift-card program had just started a few months before Grand West called to say it wanted to offer the promotion.
"Everyone's really excited and really supportive of it," Hoffman said. "It shows a genuine interest in helping out the community and keeping money in our local economy. I was glad that we had the vehicle -- that we had the gift-card program started to help him out with this."
Reeher said the dealerships had considered alternatives such as gift cards to big-box chains, which it could get at a discount, but decided it would rather direct its money toward nearby small businesses.
"We didn't feel that saving 10 grand was worth not supporting our local economy," he said. In response to this approach, "other businesses are wanting to work with us, which increases our profile in the community."
The dealerships, which sell about 70 to 90 new and used vehicles per month, are contacting customers by phone in addition to mail over the course of six months to encourage them to pick up a gift card. In the past, they have gone a more traditional route, spending $5,000 to $10,000 for "spray and pray" direct-mailer campaigns that tend to get no more than a 5 percent response rate.
For this campaign, Reeher is expecting half of the customers offered a gift card to show up. If even more than that do, he said, the stores may have to order extra gift cards.
But no matter what the costs end up being, Reeher is confident the effort will be worthwhile in terms of added sales and exposure. The dealerships are rethinking much of their marketing spending, he said, and plan to try some other new ways of getting customers' attention in the future.
"Most people are good spending $200 to $300 per up coming in the door. This is costing us a whole lot less than that, if it works," he said. "It's more and more important, in my mind, to separate yourself and get away from the old car-guy mentality."
