Car dealers are trying to work out where they best fit into the online phenomenon of social networking.
It shows how far they have come since the 1990s, when many dealers fea red the Internet might ruin them by eliminating them from the car-buying process.
Instead, dealers have gone on to find the Internet a useful channel to connect with their customers, garner sales leads and display virtual inventory.
Now they are trying to figure out how to use the vastness of social networking to their advantage through an array of online sites such as Facebook, Twitter, MySpace and YouTube.
“Dealers have warmly embraced social media,” says Ralph Paglia, director-digital marketing for ADP Dealer Services and a former dealership Internet manager.
He recalls what a contrast that is to last decade when he met dealer resistance in trying to get them interested in basic Internet use to enhance their operations. “You would have thought I was trying to inoculate them,” he says.
“There is no scarcity of media today,” says Jared Hamilton, CEO of DrivingSales.com.
Nor is there a dearth of different ways for businesses to use social networking, he says. “The strategies will be as varied as the people executing them. That is the nature of social media.”
Exact definitions differ for online social networking, but essentially it consists of online communities that provide ways for people with common interests to interact.
Cutting-edge dealers think there is a place for them among online networkers focused on autos, whether as avid enthusiasts, interested buyers or tentative shoppers. They particularly want to connect with the last two groups.
But the question is how to do that among the social-networking set. Marketing experts warn against the dangers of hard sells.
“It's better off not doing it if you are not doing it right,” says Aaron Strout, chief marketing officer at Powered Inc., a firm that promotes brand building through social marketing.
“It is about what your customers care about,” he says. “You'd be surprised how many people forget that.”
Dealership sales people reaching out through social networking channels should be up front about whom they are “and not try to hide it,” Strout says.
“Don't try to sell, but try to help people understand prices and packages,” he says at a DrivingSales conference in Las Vegas. “Let real conversations take place. Engage in conversation in the right way, not by jumping in saying, ‘Hey everybody, we sell cars!’ Be helpful.”
Social networks are like campfires, with people going from one to another, talking and enjoying the camaraderie, and “no one wants someone at a campfire passing out business cards,” says David Kiley, a former business journalist who now is with a social-media company.
There is a place for direct sales presentations. It is the dealership, not a social network site, says Dean Evans, Dealer.com's chief marketing officer.
“Just because you are soft-selling on social networks doesn't mean there is not a need to sell anywhere else,” he says.
A dealership with its own social-network page should use it to display photos from a sponsored charity or events showing the store's community involvement, Evans says.
Likewise, a dealership sponsoring, say, a youth baseball team, should post photos of “Johnny hitting a homerun,” Hamilton says.
“What you don't want to say on Facebook is, ‘We've got 50 Honda Accords on the lot,’” Evans says.
Most social-networking dealers start out pushing information on people, when they should be doing the opposite, says consultant Ray Fenster, a former e-commerce director for the Lindsay Automotive Group in Virginia.
“Rather than pushing, I recommend pulling, which means you are asking questions, and then listening,” he says. “Questions like: ‘What do you think of this car? What options should it have? Our dealership is thinking of add-ons; is that a good idea?’
“The pull approach is the way to go, but few dealers do it that way,” he says. “Instead, they start out using the push approach, which, I think, is less effective.”
Strout stresses the need for quality content and interactivity when networking online.
“Don't think that because you are advertising on Facebook that you are engaging people,” he says. “And it's not social networking if you put up a blog and don't refresh it. What that says is, ‘We tried and it doesn't work’ or, ‘We don't really care.’”
Hamilton recommends recruiting various dealership staffers to pitch in and write regular blogs on their areas of expertise.
“Get them writing what's important to customers,” he says. “For instance, the finance-and-insurance guy could write weekly on what's going on in the finance world and how customers get financing approval.
“Do that and it can turn into a lead, which can turn into a sale.”
The technology of social networking is important, but, like anything else, “it is much more about how it is managed,” Strout says.
Hamilton agrees, stressing the human side. “Social websites are less about technology and more about biology.”
There's no secret to making social media work to enhance a business operation, he says. “You just got to be genuine. There are hundreds of horror stories of people online being disingenuous.”
It is not the forum for market-speak, says Tom Chisholm, Facebook's Midwest sales director. “It should be a regular conversation. Ask questions. Answer questions. Offer help.”
Dealers need to take a local perspective, Hamilton says. “If you are a dealer in Wisconsin, don't aim for 30,000 scanners in England. Do it locally and share content with people. The way you connect is through the content.”
J.D. Power's 2009 Automotive Internet Roundtable in Las Vegas devoted considerable discussion to the modern marvel of social networking.
“I don't know if it is the biggest shift since the industrial revolution, but it is big,” says Chance Parker, general manager of J.D. Power's Web Intelligence Research Div.
But it comes with some uncertainties, such as whether ads on such sites are particularly effective. Advertising on social networking sites is tempting because of the sheer size of the audience.
“But it is definitely a gamble because Generation Yers don't like it,” Parker says.
How online social networkers expect to be treated defines much of the movement's popularity, he warns marketers.
“If you are going to be active in it, you've got to mean it,” Parker says. “You can't just stick your toe in it. These consumers want to know why they should care about you.”
Ford Motor Co. has become active in social media at the spurring of Jim Farley, the auto maker's group vice president-marketing and communications.
“Our strategy is to have other people talking for us, not us talking about us,” he says.
That's why Ford content is on Facebook, Twitter, Flickr and YouTube. Ford's presence on such sites ranges from configurators that allow users to digitally customize a Mustang to videos of young people's adventures driving company-provided Ford Fiestas, a car that debuts in the U.S. next year.
“It has created rich dialogue,” Farley says. “And it lets people create content with testimonials about our vehicles.”
He adds: “It has surprised us how powerful social media is when you empower people to provide the content. For us, the early results of embracing social media have been positive.”
For a dealership, it may take time to build relationships with customers through social networking. But it is worth it because “it will make people feel good about going to the dealership, rather than equating it with a visit to the dentist,” Paglia says.
Don't expect instant results, says dealer Todd Caputo of Syracuse, NY, who is “experimenting” with social networking to enhance business at his Chevrolet dealership and two used-car superstores.
“We're on Facebook, but you've got to get fans and develop it,” he tells Ward's. “It's not done overnight.”
Caputo's dealership personnel also chat online with customers. “That's drummed up a lot of leads,” he says. “If you are not on top of it with your website, you're done. The website is to get people in the door. They're not going to buy a car over the computer.”
Nothing is more powerful than the person whose name is on the building engaging online with customers, Paglia says of dealer participation. “You can't talk to all of them, but there are ones you definitely want to reach.”
The dealer shouldn't be a one-person show online. Not when dealerships employ so many people. Almost all of them can pitch in.
“Many dealerships have up to 100 employees,” Paglia says. “Build a social network hub and then connect to all the social networks out there. Get your employees engaged and involved.”
He recommends asking in-dealership customers what social network sites they are on. “Obviously, Facebook is the 800-lbs. gorilla, but there are plenty of others. Build that auto community.”
It's too much to ask an already overwhelmed Internet director to run a dealership's social-networking effort, says Tony Giorgione, digital director at United Family Dealerships in Las Vegas.
“We'll get there as an industry, but it will probably take a few good lenders building a new widget that can handle the running of a dealership's social networking site,” he tells Ward's at the National Remarketing Conference in Las Vegas.
But DrivingSales' Hamilton says it isn't necessary for a dealership to turn it into a major production.
“You don't need to be a rock star,” he says. “You don't need 15,000 new followers. A dealer is already connected to a large part of the community.”
He recommends dealership personnel record videos offering advice on car maintenance and such. “A lot of people forget how to reset the car clock,” he says. “Shoot a video showing how to do that, put it on YouTube and provide links to it on your website.”
Dealer personnel on social networking sites can go a long way helping consumers solve their automotive problems, says Michelle Morris, Google's national sales manager-automotive. “Answer questions in a useful way.”
Social network sites merely offer a new channel for what humans have done since primordial times: communicate with each other.
And when it comes to personal transportation, “people love to talk about their cars,” says Erich Miltsch, web director for Auction Direct USA Used Vehicle Superstore.
“It gets back to basics,” says Angie Sherrell, vice president of GS Marketing Group Inc., which provides website services to Toyota dealers. “All the things we're doing we've always done — we're just doing it faster.”
In some respects, dealers have no business being on social sites, although they might consider having their own, says Larry Bruce, a former dealer and vice president of Managed Marketing Solutions, a division of Reynolds and Reynolds information technology firm.
He warns against barging into networking sites, attempting to engage with current or potential customers.
“Social media is not a place for traditional car dealers pushing a message,” Bruce says. “It's to let customers share our message with others, if they so desire.”
Nor, he adds, do customers want dealership text messages about buying a car or getting one serviced. Instead, that's where the dealer website plays an important role.
“People are coming to your website, not to join Facebook, but to schedule service or find a car,” Bruce says. “So make your site attractive, informative and simple to use. Minimize the brain damage.”
He recommends a marketing strategy, online and otherwise, that avoids a shotgun approach. “If you are trying to connect to everybody, you're connecting with nobody.”
Dealers and auto makers deliver different messages, says Dave Latham, vice president-product development for Jumpstart Automotive Group. “The OEM is saying, ‘Buy this car.’ The dealer is saying, ‘Buy here.’”
Meanwhile, consumers are saying that buying a car is frustrating. “So the dealer's message should be: ‘It's not frustrating here,’” he says.
He adds that such a message should be posted on sites such as Twitter and Facebook, “because if you are not there, customers expect you to be.”
Online-search capability may rise to a new level because of the social networking phenomenon, some experts say.
“We're watching real-time search as a part of ‘social,’” says Michael Margolin, interactive marketing director for RPA ad agency.
“Conversations are happening on Twitter, and if search engines can figure out how to manage this content, it could be incredibly valuable,” she says. “You could get some great stuff with real-time search.”
Dealers have come a long way since the days when they worried the Internet would drive them out of business. Now social networking is the new frontier.
“It seems like every year something new and complex comes up,” Adam Simms, general manager of Toyota Sunnyvale in Sunnyvale, CA, says of the latest online advances. “There are layers and layers of complexities.”
Is Social Media a Fad?
Is social media a fad, like so other come-and-go elements of modern society?
J.D. Power and Associates' researchers asked that question at its recent Internet Roundtable in Las Vegas, then cited impressive numbers. Such as:
- Facebook added 100 million users in nine months.
- If Facebook were a country, its population would be the fourth largest in the world.
- 100 million videos are on YouTube.com
- Online bloggers now number 200 million, three-quarters of them posting opinions about products and services. “I'm not going to tell you bloggers represent the mainstream of buyers but, boy, they're getting close,” says Chance Parker, a J.D. Power researcher.
- Nearly 80% of consumers trust their peers' opinions.
5 Commandments of Quality Website Content
Here are website content commandments for businesses from Adam Strout, chief marketing officer of Powered Inc.:
- Don't create cute infomercials or ads for your website or YouTube.com “unless they are really funny — and most aren't,” he says. “Don't expect them to be picked up virally.”
- Align content strategy to complement business objectives.
- Offer depth and breadth of content.
- Keep it fresh.
- Acknowledge differences in people's learning preferences and offer a diverse format to accommodate them. “I'm more visual, so graphics work for me,” Strout says. “On the other hand, my wife is a reader, and prefers a text format.”