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Why No Social Media Vendors Exist In Automotive

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Before you get all huffy (especially the social media vendors that may read this), I want to narrow my definition of “social media” for the purposes of this article down. Social media encompasses a lot of things but I’m specifically talking about Facebook and Twitter management.

There are not many people who would argue that, given the choice and means, any company has the ability to do their own social media better than any vendor. You know your company better than anyone. You have the access and availability to create instant, company-specific content on-site and all the content you need to do it.

That being said, if you find yourself either in a position where you don’t have anyone to do it in house, or you don’t have the time to do it yourself and you are considering outsourcing your social media, consider a few things.

Being familiar with many of the social media services directed specifically at the automotive industry, whether those services are from a company that only does social media or as a service offered by a vendor that has multiple services, in my opinion, there aren’t any social media companies and/or any true social media services offered by companies.

What, exactly, do I mean by that?

In my opinion, every company that exists and works within the automotive space that offers social media services are, in reality, offering content marketing services. The basic idea is that they will set-up and/or manage your social media properties and provide content for those properties on a daily (or less) basis. Yes, chances are that they will respond to comments left (hopefully) and engage with fans when fans engage with you. They may offer to help you grow your fan base and followers – some via methods with which I agree and some using methods which I think are idiotic. Keeping in mind that I’m only talking about Facebook and Twitter management (not reputation, location-based services, etc.) that typically encompass the scope of work.

Content marketing is NOT social media.

I’m certainly not trying to imply that there is no value in content marketing. There are lots of benefits to it especially with well run blogs with great, relevant content… but it’s not social media (at least as defined for the purposes of this article).

So, what is social media?

In my opinion, if someone says they will manage your social media properties, these are the types of things they should be doing:

  1. They should be optimizing your pages/profiles to achieve maximum exposure via search engines.
  2. They should be teaching you how and helping you grow your fan base organically through in store signage, marketing integration and other means in which to capture your existing customers.
  3. They should be providing fresh, relevant and timely content and posting this content to your properties on a daily basis.
  4. They should be creating, finding and seeking this content daily. Yes, every day. Not creating some monthly calendar of content 30 days in advance, re-using content amongst clients (whether they are geographically close or are competitors doesn’t matter)… and they certainly should not be using a “content library” of canned posts.
  5. They should be analyzing the performance of different content types on a daily basis and tailoring the content they are posting to what the page audience wants to hear, not what they want to tell them… on a daily basis.
  6. They should be available and ready to react almost instantaneously to any issue, event, request, problem, comment.. anything and everything… on a moment’s notice. If a customer tweets or posts a complaint, there better be someone to respond.. and fast. Not just between the hours of 9am and 5pm.
  7. Most social media companies are reactive in their engagement. Their engagement is in response to an action taken by a fan or follower. Social media companies should be proactive in their engagement. They should be seeking out relevant conversations happening in your market area (whether that’s by region, state or national) and trying to insert themselves into relevant conversations in a non-threatening and engaging way.
  8. Anyone that tells you that social media is all about branding and that “selling” shouldn’t and/or can’t happen is an idiot and you should run away from them. Bottom line is that everything you do – whether its traditional or digital advertising – is about selling your product or service. Sales can be, and are, made on social media all the time. Revenue is there. There is an ROI (albeit it’s hard to track). Anyone trying to convince you otherwise is setting you up for that future conversation where you say you’re not selling anything from it and they say social media isn’t about selling. I’m pretty certain you’re not in business to not make money.
  9. When people follow you on Twitter, they should be thanking those people and, if appropriate, following them back. In addition, they should be finding new and relevant people to follow on your behalf. On top of those two things, they should be identifying your influencers as best as they can (and that doesn’t necessarily mean the ones with the highest Klout scores) and seeking to engage with them.
  10. They should be using methods and techniques designed to maximize your reach on both Facebook and Twitter. There are many things you can do that are free. Some that cost money. There are some things that I believe are worth the money they cost and some that I believe you might as well be lighting your money on fire if you use them. Whatever the case may be, they should be including these in their offerings to you. They should be doing this in real-time as the situation warrants.
  11. They should be providing you with detailed analytics monthly including detailed Facebook reports, Twitter reports, overall performance reports, response times, interactions, and even be able to show you how your social media may have influenced website traffic (which it can, and is possible, if you provide your Google Analytics code to them). These reports should NOT be simply how many new fans/followers you got, how many pieces of content they posted and the engagement metrics associated with that content (likes, comments, shares, etc.)

How do I know that there are NO social media companies that do this? Well, I’ve talked to many of them. Heck, it was my JOB to research competitors. I also attend trade shows and pay attention.

The reason they don’t do it is that it is not a scalable business model. Bottom line. I get that and agree that it probably isn’t but that doesn’t mean they’re providing social media services.. they’re providing content marketing. That’s all well and good but let’s keep it real.

Just because doing it right isn’t “scalable”, that doesn’t justify calling your service something that it isn’t. Many dealers don’t “get” social media. Some “kind of” get it. The ones that actually “get it” will agree with everything I’ve just written (or at least I hope they will).

So, remember two things about your social media: First, that you can do it better than any vendor whether you believe that’s true or not and second, that, IF you’re going to outsource this to a company, at the very least know the difference between a company offering you social media and one offering you content marketing.

[Note: If you know of a vendor that does all of the things I described above and/or even more, I’d love to hear who they are.]

The ‘Car Dealership Expose’ Book You’ve All Been Waiting For!

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In the car business, just about every dealership has “that” employee. You know, the one that complains about everything. The one that’s never happy. The one most sales trainers, consultants and managers would call “cancer”. The advice that 99% would give in regards to “that guy” who, no matter what you tried, just isn’t positive and seems to hate everything would be to fire him. The last thing you need is some jaded veteran salesman spreading dissension and negativity around your dealership.

The guy who says things like these:

“Any sales managers know if the car dealer or general manager are screwing the salespeople by using hidden packs or inflating reconditioning costs of used vehicles, but they do not have the balls to say anything. Their balls have been cut off by the dealer or his puppet general manager before they get their titles.”

“25% commission after the $500 pack means, your dealer is taking away $125 of your hard earned money on every vehicle that you sell. If you are selling 12 units, you get screwed $1500 a month which translates to $18,000 a year, just like that!”

“Car dealers do not allow salesmen in the business office not because they are afraid that the salesmen may screw the girls that are working there, they are not allowed because dealers are afraid the salesmen may look at the files and figure out how they are getting screwed on their commissions.”

Do you know this guy? Do you have one at your dealership? Have you heard of this Great White Shark who lives in car dealerships?

Well, Jaws wrote a book. No kidding.

The book, titled “Kar Guys” and written by Mehdi Roufougar is scheduled for release (according to his Facebook page and Twitter account) .. “soon”.

[Note: There are more choice quotes that I didn’t mention as well as a glowing recommendation of the book from somebody.. probably his neighbor.. on his website if you feel the need to spit your coffee at your computer monitor.]

It’s target audience isn’t consumers. It’s not meant to “educate” people how to buy cars or anything like that. This book’s sole purpose is to “enlighten” commissioned employees of car dealerships in the many ways they are, have been, and will continue to get screwed by their employer.

I was going to contact the author to talk to him regarding his book but his website advised that:

“Any dishonest car dealer,corrupted general manager,crooked sales manager or kinky closer who got offended from the kar guys book or this website feel free to call 1-800-kiss my ass.If the phone is busy,hang up and try again may be away from my desk or on the other line talking to another asshole.”

…so I changed my mind.

Someone this jaded, bitter and hostile would never believe that I really just wanted to talk to him about his book, motivations to write it, and what he hopes to accomplish.

My guess is that it was cheaper to write a book than to continue therapy.

:: face palm ::

Santa Doesn’t Visit Car Dealerships

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Coming from a retail background, I can attest that working in sales at a dealership is hyper-competitive. The whole ‘hero to zero’ mentality is meant to motivate salespeople and not let them mentally back off or take the next month easy because they were top salesperson and/or got a fat paycheck. Now, I know that there are some dealerships where this environment doesn’t exist now as it’s been a little while since I actually sold cars but I do know that this environment exists in many stores to this date.

What made me think of this was when a friend was thinking of planning a ‘Secret Santa’ and ‘cookie exchange’ for the holidays. I had no idea what she was talking about which boggled her mind. You see, these things just didn’t exist in retail. I never wanted to give presents to other salespeople nor did I ever receive any. Now, I’m a pretty giving person. I like giving people gifts and making their days a little brighter, it just never happened. Yes, there were times when I was given Christmas bonuses by employers and, while I appreciate money, it doesn’t ‘feel’ quite the same as being given a gift that took some thought regardless of how much the gift cost.

I remember, in my early days in retail when I was a green pea, literally ducking staplers that a sales manager was throwing at me. Public verbal lashings, which included many curse words, weren’t uncommon. Finding innovative ways to take other salespeople ‘off-the-market’ was encouraged and bragged about. Skating another salesperson was commonplace and arguments over customers and deals were daily occurrences.

Learning that these holiday activities not only existed but were fairly common in workplaces was foreign and it made me reflect on just how much I missed out on in my life. We all talk about the high turn-over of salespeople in dealerships and try to find ways to increase employee retention but I don’t think I’ve ever read, or heard, about a dealership cultivating and encouraging an environment like this. Sure, I’ve heard the whole ‘work as a team’ speech many times but, ultimately, that sentiment lasts only until the next deal dispute happens.

The spirit of the holidays, and a conversation with a friend, saddened me. I sincerely hope that my sharing sparks thought in those still out there in the retail sales environment missing this just as I did.

For many salespeople in retail environments, it’s not beginning to look a lot like Christmas.

When Charity Isn’t Charity: A Contrast in Two Auto Manufacturers

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Every time our country experiences a natural disaster, many businesses rally to assist those affected. These shows of empathy and the willingness to help their fellow human being are great and can show true character from the company.

Recently, due to the devastation caused by Hurricane Sandy, automotive manufacturers joined these relief efforts.

An interesting contrast exists, however, in two major automotive manufacturers philanthropic strategies.

Toyota pledged to donate $1 million to assist in Hurricane Sandy relief efforts and to also match employee contributions to relief efforts and organizations.

Nissan took a different route by offering “deep discounts” on vehicles to consumers affected by Hurricane Sandy.

As I read these, one struck me as a genuine act of kindness and an effort to ‘give back’ to the community while the other struck me as a thinly-veiled grab at some publicity and an effort to stimulate some sales. Can you guess which is which?

I don’t know about you but if I were affected by Hurricane Sandy with results ranging from flooded houses to no electricity and fuel rationing, the last thing I’m probably thinking about is buying a new car. Sure, maybe my car is underwater and totaled and I will need one eventually but is it truly philanthropic to offer what amounts to ’employee pricing’ to affected consumers? Nissan is already blaming slow sales on Sandy. Now, it appears as if they are attempting to stimulate sales by capitalizing on it.

“Employee-pricing” just doesn’t seems like philanthropy to me, personally. I know that, in many cases, a consumer can negotiate a price below what an employee would have to pay. Most auto manufacturers and/or car dealers have offered employee pricing to their consumers at some point in time as simply a normal sales promotion. What turns this oft-used sales promotion into an act of charity all of a sudden? Nothing.

Both companies have offered to assist customers of their respective lending arms with payment extensions and flexibility, which is great, but only one of these “efforts” seem like a true charitable gesture…

..and it’s not the one offering a discount on a new car.

 

Social Media and OEMs: the Flaw in the Machine

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I remember a few years back when OEMs started pressuring their dealers to develop a social media presence. “You have to have a Facebook page.”, and “You need a Twitter account.” They sent their contracted digital marketing consultants to their dealers and beat them senseless until they complied. They started grading their dealers’ online presence and critiquing it’s absence.

On the flip side, manufacturers were developing and building healthy and thriving online presences. I get that. Their job is branding and promoting. That’s awesome. Some manufacturers were better at it than others. Some took their time joining the game. Some were ahead.

As most of you reading this know, one of the goals of social media is exposure outside your networks. That’s difficult to achieve for most dealers, especially dealers not paying attention and putting forth just enough effort to say they are “doing it”. Some are effective and others aren’t.

The thing that puzzles me is that, for the most part, many manufacturers have large audiences – some in the millions. Their public face is all about reassuring customers and branding. You hear phrases and messages that say things akin to we value you as a customer. Wait a minute now. Who, exactly, is a manufacturer’s customer? I don’t know any manufacturer’s that sell cars direct to consumers. The only people that buy cars from manufacturers are car dealers. In my opinion, that makes car dealers the manufacturer’s customer but that’s beside the point.

Many manufacturers spend a lot of time watching, learning and responding to consumers on various social media channels – which is awesome. That being said, if you are social media savvy at all, you understand the value of a retweet or mention from a “person” with a large following – whether that be on Facebook, Twitter or wherever. While I’m sure it’s probably happened at some point in time, I have yet to see any car manufacturer put any concerted organized effort into identifying tweets from their TRUE customers – the car dealers – and using their considerable online presence to retweet and mention those dealers. You’d think they’d want to support a dealer’s social media effort.

If a dealer is putting out great content and saying positive things, why wouldn’t a manufacturer want to spend meganbarto@gmail.com or skeetle@me.com and effort into assisting the dealer gain exposure and increase their networks to the relevant people within their audience? I mean, THEY are the ones that pushed dealers into the social media world.

If your customer – the dealer – is doing a great job, reward them by interacting with THEM as well as with the end buyer. It would be a great way to support your franchises, reward them for their efforts, which, for the most part, are also going to be promoting the brand itself, which is completely in line with your goals anyways. YOU want engagement. YOU want to be retweeted. Why is it unreasonable for to assume that your dealers do as well?

I challenge a manufacturer to devote as much effort into integrating social media support for their franchises into their operations as they do supporting themselves. There are less franchises than consumers so it wouldn’t take a lot to accomplish. A retweet here and there would be easy, appreciated, rewarding, and relevant.

Oh, and don’t try the whole “we don’t want to play favorites” excuse – even if you truly believe it might be interpreted that way by your franchises. If your dealers have an online social media presence, support it. Maybe that would encourage your dealers who do not to jump on the bandwagon.

Practice what you preach and support the hand that feeds you.

 

The Only Way To Do Social Media Right

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Yeah, Yeah… I know what you’re thinking. Here’s another social media “expert” that’s going to say “this is how you do it”. Actually, I’m not. (As an aside: What does it mean and can anyone really be an “expert” in a field that’s relatively new.)

I, like any other social media person, have my opinions, methods and strategies that I believe work well. I believe these methods work well through many tests and practical implementation. These are, obviously, what I teach and advise. That being said, there are many other social media “experts” that have different opinions, different methods, and different strategies. Whether I agree with them or not is irrelevant. In most cases, when I hear other social media people say “this is how it should be done”, I cringe inside.

Because of the ambiguousness of what it means to be an expert in combination with the fact that this field is constantly changing and new, many dealers (or clients) don’t really know how to judge/evaluate whether a social media consultant/company is “good” at what they do. The easiest way (and how many dealers do it) is to judge a person or company by their own social media presence: How many “likes” do they have? How many followers? Etc.

I personally, don’t believe that either one of these things constitutes a valid assessment point when considering who to partner with in your social media efforts. “Likes” and “followers” can be bought. Does that mean they’re good at what they do? No. It just means they have money to spend. The same philosophy I have in regards to using “likes” to determine the success (or not) for a client’s social media identities applies. You can have a million followers but if none of them would ever do business with you, you’re wasting your breath and your efforts are worthless and a waste of time. If you are a dealer (or business) in Florida, would you pay for traditional advertising in California? Why not? Exactly.

I’m not going to go into what my philosophies are as that’s not the point of this blog post. The point is that there IS no single way to do it right. Numbers of likes and followers or a consultant’s/company’s Klout score don’t mean anything. If you’re looking for a social media partner, for the love of God, please do not use these factors in your decision-making process.

Find a partner who fits well into your company’s strategy, is willing to integrate with your existing marketing, collaborates with you and, most importantly, is willing to make a personalized plan and strategy geared towards your specific audience, not one who fits YOU into THEIR cookie-cutter template process.

If their sales pitch centers around how many “likes” they’ll get you and how many more followers they’ll get you and the reasons they give you for hiring them in any way involves how many likes or followers they have, run away. As fast as you can.

Keep in mind, this person/company is you in the online space. There is no differentiation from a customer’s perspective.

You better be sure that the voice they use is YOURS, not THEIRS.

Why You Shouldn’t Brag About That Pounder

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As an avid social media user and an automotive industry professional, there is something that’s been bugging me.

I see people on social media bragging about that “12-pounder” they just closed (for those not in the industry, a ‘”pound” is equal to $1,000). To me, this really screams “unprofessional” and I also see it as detrimental to the reputation of the person posting it, the dealership represented by that person as well as further contributing to the stereotype car dealers have been struggling to change.

Look, as a salesperson, commissions are how your living is made, I get that. As a dealership, profit is how you pay your non-commissioned employees and overhead, I get that as well. It’s always nice to make money. I also believe that a salesperson and a dealership SHOULD make money. The salesperson is not there to work for free and all dealerships need to make money to keep the doors open. I also believe that most customers understand that a dealership needs to make money to stay open and don’t have a problem allowing the dealership to make some.

What I have an issue with is people who brag about the insane and, some would say, inappropriate amount of profit they managed to negotiate out of a customer. You made a big sale, good for you. Don’t go and brag about it on Facebook. Don’t tweet about it.

Social networks are designed to interact with people. You never know who is listening. Do you really believe that the person in your social network that sees you bragging about these huge deals wants to buy a car from you?

I’m not talking about some high-priced or hard-to-get car. I’m talking about the Honda salesperson (as an example) who is bragging about making $12,000 profit from a single sale. Really? Great, you made money but to many consumers (including your friends and family) what you did was reinforce for them that they shouldn’t buy a car from you or your dealership.

I know many dealerships who have internal policies on how much profit a finance department is allowed to make by limiting rate markup and pricing on back-end products and I believe that is a wise (and honorable) practice. Front-end profit is restricted, for the most part, by the banks. In most cases, they’re not going to let the customer finance $20,000 over sticker regardless of whether they agree to or not.

I personally think that, while the “big fish” you catch may offer immediate gratification, they will hurt you in the long run. Do you really believe that the customer you just buried isn’t going to figure that out eventually? Do you think that person is going to tell their friends and family that they should buy a car from you?

Then to actually go on social networks and brag about it? That’s just insane. You might as well brag about how much money you scored when you mugged the old people in the alley because, excluding other like-minded auto people, that’s what you just did.

How would you feel if you signed a contract with a vendor for services and discovered a month or two later that you were paying three times the rate that other people were? What if that vendor then went on Facebook and bragged about it? My guess is that you wouldn’t be happy with them or their company.

Look, this is only my personal opinion. You don’t have to agree with me and you’re entitled to sell your vehicles for as much (or as little) as you choose to. That being said, I do think that it is important to give ALL your customers a fair deal and, should you choose to make a huge profit from a single customer, you shouldn’t brag about it on social networks.

If you feel different, please comment and let me know why.

Are Industry Awards Meaningful?

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There’s been an interesting discussion going on over on DealerRefresh titled “Is Paying for an Award False Advertising?”

I’ve heard many opinions over the years from all perspectives – from vendors who have won them to vendors who have not, from consultants and from dealers.

My take is that an award is only meaningful if it is a significant factor in a potential customer’s decision to do business with you.

There aren’t a ton of awards for vendors in existence. The ones that do exist are, in most cases, given BY a vendor TO a vendor.

I don’t believe that most dealers have knowledge of, or give weight to, industry awards for a simple reason: they’ve never heard of either the award, the awarding “authority”, or both.

Until an award exists that dealers are aware of and give weight to, in my opinion, receiving an award only gives a vendor the ability to do one thing that their competitors cannot:

cartoon_gorilla

What do you think?

Are industry awards meaningful?

If so, which ones do you believe have authority and could influence a prospect’s decision-making and why?

[P.S. I’m starting the “Arnold Automotive Awards”. If you want to be considered for one of these prestigious awards, please contact me to make billing arrangements.]

Ford Says Consumer Privacy Is Impractical

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In a Yahoo! exclusive article published today, it was reported that Ford has initiated a lawsuit against 13 individual eBay sellers who they accuse of selling fake or counterfeit Ford parts. I’m not arguing the merits of Ford’s lawsuit as it is certainly within their rights to protect their trademarks and copyrights as well as take steps to protect dealer’s profits in the part business but rather to question the bigger issue encompassed by this: an individual’s right to privacy.

The subpoenas for the  lawsuits were granted by the court for Ford to obtain the seller’s identities and information. What is unusual about this is not that they requested it, but what they asked for after that request was granted.

As reported in the article, most ISPs and websites have policies in place that notify users when the company gives out their information for any reason except for that involving criminal activity and which is requested by law enforcement agencies.

In this case, Ford not only requested the user’s information but also asked for their bank account information (which was denied) then went a step further and asked for the court to prohibit eBay and Paypal (an eBay company) from notifying the targeted users that their information was requested and given out.

This move flies in the face of all privacy issues. With the public outcry against the recent legislation effectively designed to skirt privacy issues accompanied by Ford’s strong pro-consumer brand and social media presence, you’d think they would want to steer clear of any controversy in regards to consumer privacy.

“Much of the debate in recent months over online privacy has been spurred by bills in Congress, such as the Stop Online Piracy Act and a new bill, the Cyber Intelligence Sharing and Protection Act, which passed the U.S. House in April. CISPA would let companies and law enforcement agencies broadly share users’ personal information to fight potential threats — including accusations of copyright violations and counterfeit goods — without penalty, trumping any company policy.” writes Justin Hyde in the Yahoo! article.

The reason reported by Ford for this request was:

“Ford respectfully suggests this procedure is impractical and would serve to undermine the rationale for the subpoenas. The procedure would impose a substantial burden on [eBay and PayPal] to prepare, serve and enforce subpoenas and would serve to “tip-off” or warn the Doe defendants of Ford’s investigation. Under the procedure as written, the Does would have notice that Ford was seeking their identities and thus ample time to destroy evidence, the counterfeit and infringing goods, and flee to avoid service all before Ford would be entitled to receive their true identities.”

I understand why they asked the court to do this but just because it’s a good reason doesn’t mean it should outweigh the right to privacy that all citizens enjoy. This is a civil matter, not a criminal one.

Now that one court has issued what I feel is an invasion of privacy, what’s to stop other judges from following suit. I can think of plenty of GOOD reasons for a judge to do this but that doesn’t mean they SHOULD. Where does an ISP or website draw a “line in the sand”? Despite Facebook’s own internal privacy issues, they have, and are still, fighting other companies from requiring or being allowed to access their user’s information and accounts including employer’s requesting pre-employment access, schools requiring students to reveal their Facebook walls to administrators and more.

Being an eBay user for over 14 years and a Paypal user for about 12, I would hope that they would challenge and fight for their user’s right to privacy. It’ll be interesting to see how this plays out and whether any of the companies involved will take a stand for their users.

While Ford may feel that their lawsuit against 13 people succeeding is more important than our rights to privacy, I just find that.. well.. impractical.

Tip: Why (and How) You Should Buy Facebook Stock

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[UPDATE 5/22/12: According to this article by AllFacebook.com, Facebook has reversed course and decided not to issue paper stock certificates so this whole article just became a fantasy.]

First, a disclaimer: I am not a financial advisor in any way, shape or form. What I AM is an entrepreneur so take this advice from that standpoint. There is never a guarantee of future value but this is why I think it’s a good investment.. if bought in a certain way.

Today, Facebook held its IPO to much media attention, speculation and became the largest IPO ever in the history of IPOs. There is a ton of advice saying that the opening cost is overpriced, to wait, etc. and that its a bad initial investment. I disagree but only from the perspective, and using the method, I describe below.

When a popular company has an IPO, they can choose whether or not to allow investors to obtain a physical stock certificate or not. Most companies do not and, if they do, its for a limited time. Facebook chose to allow investors to request and obtain physical stock certificates.

facebook-stock-cert.top

I’ve been selling things on eBay for over 14 years and I’m always on the lookout for things to sell and make a profit so I thought about this and did some research.

When Apple had its IPO in 1982, shares cost $22 each. They also offered the option to buy a physical certificate. Without any consideration for the current market value of that share, the actual certificate itself has a market value of almost $600 on eBay. Say you bought 100 shares and asked for individual certificates. The certificates ALONE would make your initial investment of $25/share ($2500 after adding a few dollars for the certificate) worth $60,000. If you actually retained ownership of the stock itself, without consideration for any stock splits or anything else, the shares themselves would be worth $53,259 (value as of May 18 at 12:00pm PST). You can retain ownership of a stock and sell the actual certificate so your initial investment with physical shares is suddenly ~$113,259. Yes, it took 30 years to make this but it’s still a VERY healthy return on your investment.

Let’s say you really don’t want to retain ownership of the shares as an investment. You buy the shares and order the physical certificates. Wait a couple months to receive the certificates, then sell the shares. Let’s say the shares have tanked and they are only worth $10 each at that point. You’ve recouped $1000 of your initial $2500 investment so you’ve lost $1500 BUT you still have 100 stock certificates which are, at this moment, worth $60,000. So your $1000 investment netted you $59,000. Best case, the share price is up and you can make a profit on the initial investment and, again, still have the actual certificates, in this case, for no investment.

People like collectibles and owning a piece of history. If you’re going to buy the stock anyways, pony up the extra couple of bucks a share (Make sure to get individual shares on each certificate rather than multiple shares on one certificate to maximize the potential future sale as people are buying the certificates themselves. There is no difference in value between a certificate that is for 1 share or 100 shares.) and have the extra potential return.

Other examples:

My guess is that a certificate purchased on (or near) the actual IPO date would be worth more to a collector in the future (as in the Apple stock certificate example). I also believe that the initial stock shares will be signed by Mark Zuckerberg based on similar past IPO certificates.

Of course there’s never any guarantee that the certificate will be worth anything in the future and this is certainly a long term investment whether you keep the shares AND the certificates or just the certificates. Whichever you decide to do, there’s more POTENTIAL in having the certificates then in not having them. In addition, due to the high demand for the stock itself, I don’t believe Facebook will be offering paper certificates for very long so you could have a narrow window to take advantage of this.

Most stock certificates won’t sell like this, of course. The examples I use are exceptions but I believe Facebook will fall into this category. If an old AOL floppy disc (that were everywhere “back in the day” and that they mailed to everyone once a week, it seemed) can sell for almost $10,000 on eBay… well, you get my point.

Either way, in my opinion, it’s kind of cool to own a piece of history.

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