Have you wondered about those solicitations you get asking you to trade in your used vehicle? I have, so I chatted with Adam Lee, chairman of Lee Auto Malls, Maine’s largest auto dealership.
He said it’s an effective marketing technique. If you’ve purchased a vehicle or had it serviced at a local dealership, your name is in the dealership’s database. Contacting vehicle owners directly to ask if they’d be interested in trading in their used vehicles produces a much greater response rate than other techniques.
At Lee, for every 100 customers contacted about a potential trade-in, about five follow up, said Adam Lee. For a similar response, dealers would have to make 1,000 cold calls to recruit a trade-in from someone unknown to them.
“Car dealers discovered that working a customer database is more rewarding – it doesn’t matter what the car is – I still have a shot at selling you something better,” he said, noting new car sales have been strong for the past couple of years, fueled in part by low interest rates and increasing trade-in values. “So much in this business is fueled by the value of used cars.”
AN INABILITY TO CATCH FIRE
I’m sad to hear the intermodal facility in Auburn is running into trouble with Canadian National Railway’s announcement that it will no longer provide the shipping service. I was at the ribbon cutting back in 2003 when the facility was designated a formal port of entry and allowed a U.S. Customs inspection station for rail freight. That, coupled with its designation as a Foreign Trade Zone the next year, was expected to open all kinds of global trade doors.
But alas, there would be too much bureaucracy ahead for the FTZ to gain traction. Companies such as Procter & Gamble’s Tambrands, which imported its tampon fiber from Germany, and Safe Handling, which imported chemicals from Asia for its paper mill customers, and many others explored using the facility to save duty and processing fees. But the numbers never worked. The costs to comply with FTZ regulations outweighed the gains.
ONCE THOSE VACATIONING EUROPEANS RETURN TO WORK
In June, staff writer Whit Richardson wrote a story about Cerealus, a tech company in Waterville that is developing an additive made of nanocellulose that produces stronger and better-quality paper when introduced into the papermaking process. The development of the additive has been done in conjunction with the University of Maine Process Development Center in Orono. Whit’s story got picked up by RISI, an international association of pulp, paper and forest products producers that shared the news with its global subscribers. A few days after the story ran, I received this email from Tom Moore, president of Cerealus:
“Among the notes I got were several calls by European mills yesterday asking about our relationship with UMaine and how they can evaluate the cellulose nanofribril applications. Pretty cool for a Maine company.”
Indeed. Yesterday I checked in with Tom, who said Cerealus is poised to capitalize on that interest once Europe’s mill managers return from their extended summer vacations. Apparently Europe is a work-free zone in August. Stay tuned.
Watch this: At the global economic symposium in Jackson Hole, Wyoming, there was a consensus among central bankers that the Fed should start presenting unemployment data in a much broader context. So it’s creating its own Labor Market Conditions Index, an acknowledgment that simple unemployment figures do not reflect what’s really happening with job growth and creation.
Although Maine’s July unemployment rate of 5.5 percent is good, it does not take into account the nearly 60,000 people who have given up looking for work and remain in the shadows of labor market analysis. It’s tough to unravel how many jobs actually exist, how many people are looking for work, and where and how they find jobs. It’s an especially thorny issue during an election year when candidates tend to tout how many jobs their policies and programs created – or how many they promise to create – when the data keep dancing around.
The Fed’s index uses 19 indicators that run the gamut from the Department of Labor’s monthly unemployment rate, to private payroll employment reported by the federal Bureau of Labor Statistics, to hiring plans reported by the National Federation of Independent Business. It promises to offer a much more complete assessment of U.S. jobs.
Let’s hope it’s operational before Nov. 4.
Drop me a line: This is the first in what will be a regular column in the Tuesday Business section. It’s intended to be a home for insight and updates from Maine’s business community. If you have any tips to share, email me at firstname.lastname@example.org or call me at 791-6460. I’m all ears.