Social media is great for boosting brand awareness but can it also drive sales? This is a question brands and marketers are wrestling with as they try to engage social media users. For automotive dealers, this question is particularly compelling if it means reaching customers, like Millennials, who are resistant to traditional marketing.
The stakes are also rising for dealers to effectively engage social media users as more people use the channel to make purchase decisions. One-fifth of consumers use social media as their primary source of information about automotive brands, according to the J.D. Power 2014 Social Media Benchmark Study, which surveyed 9,800 U.S. online consumers. And 29 percent of the respondents said they get recommendations about a product or service from friends and family exclusively through social media.
Social media is "the ideal platform for commerce because it already has a captive audience," comments Rob Begg, vice president of enterprise strategy at Hootsuite Media. "Transforming ads into shopping portals combines marketing and sales into one action, expediting the whole process and ultimately making it more profitable for brands."
And as social platforms like Pinterest, Facebook, and Twitter experiment with buying tools, brands "are on the cusp of a social selling revolution which has grown out of social's success as a marketing tool and its unparalleled ability to effectively connect brands with consumers," Begg says.
Buying a shirt on Facebook is not the same as buying a car, however and dealers face a different set of challenges compared to other retailers. Some auto industry experts say social media has been effective in driving brand awareness but less so as a selling tool. Dealers have yet to get car shoppers to consider buying a specific vehicle through social media, says Mike Accavitti, Acura division general manager, during a panel discussion at the Automotive News World Congress in January. "It's a fantastic way to get awareness," Accavitti notes. "We haven't seen the results yet on consideration."
Building a Personal Brand
The key to using social media as a selling tool is not treating it as an advertising platform, explains Laura Madison, national director of sales at Alan Ram's Proactive Training Solutions. Until recently, Madison worked as a sales professional at Toyota of Bozeman, a dealership in Montana. Madison used social platforms like Facebook, Twitter, and YouTube to build a personal brand and get referrals. She also built a website, lauratoyota.com, where she wrote blog postsabout dealership news and test driving tips, and posted photos and videos of the dealership's cars.
"The car business has been extremely affected by the Internet," Madison says. "Ten years ago, customers visited nearly four dealerships on average before making a purchase. Today, that number is 1.4. If you were the second dealership a customer planned to visit, you may be out of luck. That's why I didn't want to rely on customers to come to the dealership."
As a salesperson earning commission, it was also important to build a client base. Prior to her social media efforts, Madison says she invited acquaintances to visit the dealership, only to have them test drive vehicles without mentioning her name. Salespeople who wait for customers to call or visit a store are "leaving their livelihoods to chance," Madison maintains. "Taking more control by using social media to connect with prospective customers can be a powerful way to build awareness and ultimately, sales."
Before moving on in February, Madison had a client base of about 600 people and was selling approximately 20 cars per month, up from 12 when she started working at the dealership four years ago. Building a personal brand is challenging though, and it can frustrate other employees.
In a blog post, Madison writes that although she had permission to use Laura Toyota as a domain name, "some recent press ruffled the feathers of some not-so-enthused dealers and Toyota has asked I change names." Madison's new website is called LauraDrives.com
Dealership co-owner Jeff Kayser credited Madison for boosting the dealership's sales, but in describing reactions to Madison's self-marketing tactics, he told Automotive News, "It's been a long, hard three years with Laura Madison. It's been really hard," especially "if you're an old-school car guyit may not be the way we want to sell cars, but it's going to be the wave of the future." A request for further comments about Madison's use of social media as a sales platform was not immediately returned.
Engage Your Target Audience
Katie Troutman Johnson, corporate marketing manager at Village Automotive Group, agrees that digital media, including social, has become an essential tool for connecting with customers. Located in Minnesota, Village Automotive Group consists of several dealerships: Village Chevrolet, Lexus of Wayzata, and The Bargain Lot. The company shares content about its vehicles on Facebook, Twitter, YouTube, Instagram and other social platforms that is aimed at younger shoppers who "are looking for quick information and photos," Johnson says. "We know it's important to get in front of customers digitally and hopefully drive leads."
In addition to creating organic posts, Village Automotive Group also works with marketing firm Outsell to design and monitor paid ads, like sponsored posts on Facebook about upcoming sales which include a "shop now" button. If someone expresses interest in learning more about a car in a comment, a sales associate will follow up.
Analytics helps the company keep track of results from its social efforts. For example, Facebook ads promoting Lexus vehicles between November 2014 and January 2015 yielded nearly 290,000 impressions and led to about 560 website views. However, tying the company's social media efforts to sales "hasn't been the easiest process," Johnson notes. "We're trying to generate leads and figure out how much we spent on each lead, but that's hard to equate in social media," she adds. "Our budgets are tight, so we do what we can to keep building an online community."
Social media "is all about creating a story and opening up conversations between a brand and its customers, whether individuals or other businesses," Hootsuite's Begg notes. And the best stories are those that are engaging and provide value. People want helpful information and they will quickly tune out content that comes across as a sales pitch. Posts identifying scams or explaining what makes a car's latest features interesting provide valuable information and help the dealer stand out, Madison notes. "Offering insight, guidance, and context is a much more effective way to garner attention, encourage sharing, and position yourself as the expert in your industry," she says.
Online videos are also an effective way to engage customers. Compared to text, video lets followers "see and hear all my verbal and nonverbal communication: my facial expression, tone, body language and overall excitement," Madison says. Customers often discover Madison's content first through YouTube, which provides the greatest reach among her social channels.
The videos are also homemade. "Fully 90 percent of the 350,000 views on my YouTube channel has been people watching videos that I filmed by myself using the camera on my iPhone," she says. However, video can also work against a brand if people are not comfortable in front of the camera. "There seems to be resistance particularly in the video end of things, people don't like seeing themselves oncamera. It's also, unquestionably, more work to create a social presence," Madison adds.
Also, don't forget about the networking aspect of social media. "The secret to success is for dealers to monitor and listen to what customers are saying on social channels," comments Kim Celestre, a senior Forrester Research analyst who studies social marketing trends. A dealer, for example may notice that a customer posted on Facebook that his daughter is about to get a license.This could trigger a conversation about the type of car she will be driving and special discounts the dealer can offer for a first-time car buyer or used car.
The sales opportunity doesn't end with the car purchase, Celestre adds. Encouraging customers to follow a dealership or use a social login when visiting the auto dealer's website can enable cross-channel messaging and let the dealer send a reminder when the car is due for maintenance, for example.
Word-of-mouth marketing through user-generated content and ratings and review sites also impacts a dealer's brand. Consumers trust what their friends or a company's other customers say about their purchase experience before the vendor. And in today's interconnected world, your brand's reputation is critical, notes Outsell Chief Marketing Officer Dan Smith.
"The reality is the average shopper spends six months researching a vehicle and that includes researching the dealer," Smith says. "Having a strong brand that's trustworthy can make people feel that this is the right dealership for them." Indeed, how dealers respond to negative reviews is just as important as garnering positive reviews, Smith adds. Even if a disgruntled customer refuses to take down a negative review, dealers should show that they reached out to the customer and offered to discuss the issue.
Social media offers numerous opportunities for brands to connect with customers, but it can't be an afterthought. Maintaining an active social presence is time-consuming and requires dedication. And except for direct referrals and a few other attribution tactics, tying conversion rates to social media is murky at best. But if done right, social media can be a powerful sales tool.
"A crazy thing happens when you commit enough to build your own website and put some effort into social," Madison notes. "You start to take more pride in your profession and your work. Particularly when you begin to see results, this action is incredibly rewarding."