Jim Radogna: Avoiding the Eye of Mordor in Social Media

December 22, 2014 By Arnold Tijerina

Just like in the blockbuster series “The Lord of the Rings”, the Eye of Mordor is always open. Until now, its focus has been on larger battles and more interesting things. Then a Hobbit found a golden ring and slipped it on his finger. And the Eye started paying attention to this little being that had avoided the Eye’s gaze… until now.

The intersection of advertising, marketing, and compliance is not easy to navigate. It seems as if each week, rulings are being rendered from one of the myriad of regulatory bodies making it more difficult for dealers to know what they should – and should not – be doing in regards to social media in order to stay compliant. In an effort to bring clarity to an increasingly confusing and misunderstood topic, I sat down with Jim Radogna, the president of Dealer Compliance Consultants, to get some answers.

Arnold Tijerina: I believe dealers aren’t vigilant enough ensuring that social media performed on behalf of the dealership meets the same compliance rules and standards that all of their other advertising requires. It’s sort of like an afterthought to them. What are your thoughts?

Jim Radogna: Very true. First, many dealers aren’t aware that advertising regulations apply to social media every bit as much as traditional media. Advertising regulations don’t go away despite the fact that social media tends to be a low-key, casual type of communication. In fact, The FTC recently updated its document Dot Com Disclosures: Information About Online Advertising. The primary focus of the publication, which was first issued in 2000, is to inform advertisers that consumer protection laws and the requirement to provide clear and conspicuous disclosures applies to the online world in addition to the offline world.

So in a nutshell, if inventory is posted or prices/payments are quoted on social media it’s likely that the posts will be deemed to be advertisements and will be subject to state and federal disclosure and truth in advertising regulations. Lack of space is no excuse either. Even if you’re advertising on Twitter and are limited to 140 characters, you must include a clear link to any necessary disclosures.

Next, even if the dealer is aware of these facts, it’s likely that dealership employees and/or vendors posting to social media do not have the same level of awareness.

AT: I’ve interacted with some dealers who operate under strict compliance conformity across all advertising – including social media – and others that don’t feel the need to adhere to the same rules when it comes to Facebook, Twitter, Pinterest, etc. It certainly wouldn’t seem to be unreasonable to assume that most dealers know compliance rules for their advertising. Why do you think they view social media differently?

JR: Until recently, virtually all enforcement actions for non-compliant advertising have been focused on traditional media, so this is a brand new area. In my experience, most dealers have a limited understanding of what constitutes “advertising” in the eyes of the powers that be. When dealers place an ad in the local newspaper, on the radio or TV, it’s pretty evident to them that they’re advertising and that they need to be diligent in following state and local compliance guidelines. But they don’t tend to think of social media as formal “advertising” because their intention isn’t to advertise their products and services on the social networks as much as to engage with customers, brand themselves and showcase their inventory. It really is an innocent mistake in many instances. The problem is that any time they mention prices, payments, interest rates, or the availability of financing etc. – anywhere – certain disclosure requirements are triggered.

So, a dealer or ad agency that is diligent about being compliant in their advertising may have their attorneys or a compliance consultant, like myself, review every one of their ads, mailers, TV commercials, and radio spots before publication, but not even think about having their social media posts reviewed because they simply don’t realize that these are considered “advertising”.

Another area where dealers are vulnerable on social media is transfer from traditional media. Here are a few examples: The dealer may have a full page print ad in their local paper that is fully compliant, but when they post a reduced-size pdf of the ad on Facebook, all of a sudden the fully-legible and compliant disclosure on the bottom of the newspaper ad is now unreadable. Instead of being 10-point type, it’s now 4-point type because of the size reduction. Another example is the TV commercial that’s posted on YouTube and shared on the social networks. Again, the disclosure on the bottom of the screen may be easily readable on TV but becomes indecipherable on a computer or mobile device.

AT: A recent FTC ruling regarding personal bias disclosure across all social media platforms seems to have lead some dealers into believing that simply adding a notation that the content is an “Ad” or “Sponsored” – whether in the ad or with the use of hashtags such as #ad and/or #sponsored – is enough to be compliant. To my knowledge, while the FTC ruling is certainly applicable when it comes to employees sharing dealership offers and specials on their personal social networks, it doesn’t negate obligation by the dealer to add necessary disclaimers. Do you agree?

JR: Absolutely. Dealers may face liability if employees use social media to promote their employer’s services or products without disclosing the employment relationship. The FTC requires the disclosure of all “material connections.” These connections can be any relationship that could affect the credibility a consumer gives to statements, such as an employment or business relationship. So if employees, friends, family or vendors post on a dealer’s behalf, they should clearly disclose any relationship they have with the company. It’s all about transparency and full disclosure.

AT: As social media use by dealers grow, what are the most important things that dealers should be aware of in regards to how they use social media?

JR: There are a number of legal considerations that every company should be aware of when establishing their social media policies and procedures, such as social media use in employment decisions; posting of online reviews, testimonials and endorsements; ‘fake’ and paid-for reviews; advertising on social media; potential overtime claims; harassment, discrimination and defamation claims; copyright and privacy issues.

AT: Should dealers be concerned by how their employee’s use social media and, if so, how do you recommend that dealerships protect themselves and/or decrease liability in this regard?

JR: It’s important for dealers to craft a social media policy that’s both practical and legally defensible. They can protect themselves by insisting that participants in their social media programs comply with the law and training them how to do it. The FTC specifically says these steps may limit potential liability and will be considered in any prosecution. According to FTC guidelines, “The Commission agrees that the establishment of appropriate procedures would warrant consideration in its decision as to whether law enforcement action would be an appropriate use of agency resources. The Commission is not aware of any instance in which an enforcement action was brought against a company for the actions of a single ‘rogue’ employee who violated established company policy that adequately covered the conduct in question.”

AT: The FTC has been increasing the attention it is paying to business and social media and has recently been vocal about their intentions to enforce compliance regardless of where the advertisement resides specifically mentioning social media. How do you believe this increased action and attention by the FTC will affect dealers in the future in regards to social media?

JR: What’s become abundantly clear through recent federal and state advertising enforcement actions against dealers is that regulators are trolling through the digital world to find dealer violations. For instance, the FTC has cited many ads recently from websites and YouTube. It stands to reason that social networks are their next logical target. Let’s face it, it’s far easier for regulators to perform digital searches for violations than to read countless newspaper ads or listen to radio commercials.

My suggestion is to train every employee and every vendor that posts to the dealer’s social networks or may post on the dealer’s behalf on their own networks. Next, constantly audit all posts, either internally or by utilizing a qualified professional, to ensure compliance. Dealers are ultimately responsible the actions of their employees and any vendors they hire.

AT: Thank you, Jim. I appreciate your taking the time to help bring more clarity about this topic to dealers.

Before founding Dealer Compliance Consultants, Jim Radogna developed a strong background in dealership operations, having spent over 15 years in dealership management. His experience includes working in diversified roles including sales manager, F&I director, general manager, and training director. In addition, he served as compliance officer for a large auto group, where he developed and integrated a comprehensive compliance program. Being well-versed in all aspects of dealership operations, Jim and his team have used their knowledge and industry experience to develop unique, no-nonsense compliance and reputation management solutions for automobile dealerships of all sizes. These programs are designed to not only protect dealerships from liability but also greatly enhance the company’s reputation, increase profitability through consistent processes, and increase customer satisfaction and retention.

Jim is a sought-after speaker and frequent contributor to several automotive industry publications including Dealer Magazine, WardsAuto, Auto Dealer Monthly, DrivingSales Dealership Innovation Guide, AutoSuccess, and F&I Magazine.

Identifying Loyal Employees Can Be Counter-Intuitive

March 25, 2014 By Arnold Tijerina

A few weeks ago, I presented at Fran Taylor’s “30 Sales a Month” workshop in Philadelphia, PA. The presentation was mainly focused on my retail sales “story”, if you will. Part of what made me successful, however, was that I questioned… well, just about everything. If I saw a better way to do something, I said so. If I disagreed, I spoke up. My sales managers got so fed up with me that, at one point, both the GSM and Sales Manager walked into my GM’s office and announced that they “washed their hands of me”. My GM’s response was that I could report directly to him then. The fact that I had a great leader and mentor that believed in me and was willing to give me leeway was what allowed me to go to the next level in my career.

I remember what he used to tell me every time I came to him with some crazy idea, “I’ll give you all of the rope that you want. You can either hang yourself with it or make a basket to carry all of your money.” I never hung myself. While my presentation was mainly geared towards salespeople, I wanted to leave the dealers and managers present with a takeaway encouraging them to change their perception of employee loyalty. Attendees really liked the message and shared it on social networks with their peers so I thought I’d share the origins of that and explain it for those who couldn’t attend.

Many experts have extolled the fact that the genesis of customer loyalty lies in first ensuring that you have employee loyalty. Your employees are the front-line people that can make or break the best designed and intentioned customer experiences. The porter washing that new car just purchased could send those otherwise happy customers leaving with a slightly less wonderful taste in their mouths. The receptionist who sends a customer off into on hold limbo can send a service customer elsewhere. Don’t think that just because you care that your employees do. I believe most successful businesses, however, intuitively understand this concept. The trick is identifying these employees and sometimes that can be tough.

In a recent article, Hubspot founder Dharmesh Shah listed what he believed to be the 7 qualities of a truly loyal employee. In that article, he illustrates that while it may seem easy to identify loyal employees based on things like how long they’ve worked for you, some of the traits of a loyal employee are the same traits that may actually lead you to firing them. It’s a fact that, in general, there is high employee turnover at dealerships. Some managers are also not the most sympathetic people to work for either. It was easy to see how some of these traits could be easily have their intentions misunderstood.

The first quality he lists is the display of loyalty through integrity. In his opinion, the employee who openly disobeys you to “do the right thing” actually has your long-term best interest at heart. Secondly, they generate discussions. Shah explains that a loyal employee knows what peers understand and assists them in learning how you think by asking the questions others are hesitant to. Third, they praise others. They recognize hard work or a job well done and care enough to verbalize their praise. Fourth, they disagree with you and share their opinions because they want to improve the company and doing so leads to better decision making. Fifth, they support your decisions regardless of whether they disagree. Six, they tell you “what you least want to hear… especially when it’s awkward or even painful to do so.” And last, they leave when it’s time to. That last one would seem to particularly illustrate disloyalty but, according to Shah, when your best employees leave, they help you fill their places while doing so.

His article was very thought-provoking and certainly presented a compelling argument listing qualities that many would deem insubordinate and reversing them into qualities of a loyal employees. At one point in all of our lives, we’ve all had that boss that exhibited the “my way or the highway” method of supervision. They weren’t much fun to work for. I certainly displayed many of these qualities and, while I may not work for my mentor anymore, when I left, it was simply my time to do so.

In the turnover challenged industry that is automotive retail, managers must pause and take a moment to reflect on these qualities. List first the employees that you would say were your most loyal. Afterwards, reassess everyone using the qualities presented by Mr. Shah then compare the two lists. Are they the same? Chances are that some different names will suddenly appear. Loyal employees are key factors in business success. Identifying and understanding employee loyalty can assist you in not only increasing customer satisfaction – but also in identifying your future leaders.

Stat of the Week & In the News: Compliation August 2012

September 5, 2012 By Arnold Tijerina

August 2, 2012 “In the News” – [LINK]

Bing Deepens Facebook Integration
Allows Users to Tag Friends within Search and Share Instantly to Facebook

Bing announced earlier this week that they’ve further enhanced their integration with Facebook, enabling users to tag Facebook friends directly within search results and share queries instantly on Facebook. Using this functionality, users will now be able to more readily involve friends in decision-making by soliciting their advice while searching online.

There are obvious implications for digital marketers and online vendors—and for automotive dealers in particular. Imagine a car shopper searching “Toyota dealer” on Bing, receiving results, and then instantly asking specific friends on Facebook if they’ve had any experience with a given dealer. This deepened integration with Facebook further illustrates the importance search engines are placing on social media in order to deliver relevant search results to consumers.

The subtraction of a step in the sharing process will not only make it easier for people to share search-related content on Facebook, but also to tag friends, which will then cause those results to on those friends’ timelines, thus exposing the question to their social networks. Typically, the easier you make an action, the more people will use it. Think of the ease of the “like” and “+1” sharing buttons that millions of websites have adopted. This makes it even more important than ever to ensure that your Bing presence is optimized, reviewed regularly, and filled with positive customer testimonials.

If you want to see more about how it works, check out Bing’s video by clicking here.

August 3, 2012 “Stat of the Week” – [LINK]

One million users in 6 hours.

That’s how many people signed up for Microsoft’s re-vamped Hotmail email service, which they relaunched as Outlook.com this past Wednesday, August 1. Many reviewers, such as Gizmodo, are declaring Outlook email the “biggest victory since Gmail.”

The Wall Street Journal reports that it’s Microsoft’s attempt to capture more enterprise customers by integrating themselves into workers’ personal lives. This news should interest online vendors and digital marketers alike. That’s because many consumers favor the use of anonymous-type email addresses (Yahoo, AOL, Gmail, etc) when shopping online or communicating with vendors–including car dealers–because they offer less personal information up front. Chances are good that you will start seeing Outlook email addresses showing up in leads. You need to ensure that your CRM isn’t going to view the new outlook.com email addresses as spam.

On another note, if you were part of the land grab of e-mail addresses on Wednesday, you might have been able to get some really sweet e-mail addresses–maybe even using just your first name. The momentum of sign-ups is sure to plateau, but as long as desirable and easy e-mail addresses are available, we believe many people would make the switch rather than have a long, hard-to-remember Yahoo or Gmail address because of the lack of availability. Would you rather havejohndoe@outlook.com or johndoe34872@yahoo.com? The choice seems easy.

August 10 “Stat of the Week” – [LINK]

What drives up to four times as much retail traffic as Facebook and is #4 out of the top 7 web-traffic-driving social networks in the world? Pinterest.

We came across this article on socialmediatoday and were shocked to learn that Pinterest is responsible for so much traffic to websites. We were also surprised to learn that StumbleUpon is the #2 social media site in terms of driving traffic, but the steep downward trajectory that it’s on means it will most likely be overtaken in the near future.

Pinterest interests us so much because it is driving almost as much traffic YouTube and, although YouTube certainly isn’t something to disregard, Pinterest definitely has the momentum right now, with major brands adopting the platform for marketing purposes. YouTube will always be relevant (well, as “always” as anything can be in the fast-paced world of the internet), but we don’t see their traffic spiking anytime soon. In fact, it could very well decline now that YouTube’s license with Apple has expired and the company’s will no longer be available to iPhones.

Not only that, but Pinterest currently appeals largely to women, making the site both a unique challenge and an especially tempting nut to crack for businesses like automobile dealers. Have you experimented with Pinterest for your business yet? If so, tell us what your experiences have been!

August 14 “In the News” – [LINK]

Recently, two major automotive manufacturers released innovative apps designed to enhance consumers’ buying experiences by making the process more interactive using technology developed for mobile and tablet devices.

This past spring, at the Geneva Auto Show,Volvo unveiled an iPad/iPhone app that “reads” markers placed around Volvo vehicles, allowing users to walk around the cars and experience an x-ray-like view of the vehicle’s skeleton and inner workings, complete with callouts featuring patented Volvo innovations.

Then, this past Monday, Ford released an iPad app designed to assist consumers at the dealership by allowing them to virtually build vehicles equipped to their specifications, then use that information to locate vehicles in the dealers’ inventory that most closely match their desired specifications.

These apps are likely just the beginning when it comes to vehicle manufacturers adopting mobile and tablet technologies in ways that allow salespeople at the dealership level to integrate the latest tech into the sales funnel and make the buying process more informative and interactive for customers. Auto dealers: what’s your take? How do you think car shoppers will respond to these apps and others like them? How would you incorporate them into you showroom experience? And what app would you design for use in your showroom if you ruled the world?

August 17, 2012 “Stat of the Week” – [LINK]

148 million negative impressions.

Whether or not you liked how NBC handled their coverage of the Olympics, as this articleillustrates, the network ultimately fumbled a golden opportunity (McKayla would so not be impressed)—and damaged its reputation in the process.

As you may know, NBC made live-streaming of the Olympic Games available only to those users with an eligible cable provider account. Needless to say, this tactic left many frustrated, would-be viewers—many of whom rely exclusively on the internet rather than cable to get their TV fix—fuming. So much so that they took to Twitter and decided they were going to talk about the Olympics anyways, namely by creating the hashtag #NBCFail.

During the month of the Olympics, netscore counted 93,000 tweets utilizing that hashtag, which accounted for a whopping 148 million negative impressions. This number is made all the more damaging when you consider that NBC itself reported that only 157 million people actually watched the live streams.

Imagine if NBC had made the live streams easy to access, available to everyone, and free (by which we mean, ad-supported). Those 93,000 negative tweets probably would have been replaced by positive, patriotic tweets that included NBC mentions and hashtags. Instead, they chose monetize the content in a different way—one that earned them 157 million short-term internet viewers whose attention shifted elsewhere when the Olympics ended and almost 100,000 negative comments that will live on the Internet forever.

August 27, 2012 “In the News” [LINK]

During the 2008 presidential elections, Barack Obama made waves (and ultimately won the presidency) by enlisting the grassroots support of voters. What made it all the more remarkable at the time was that much of the campaign’s grassroots action took place online, in the context of social media.

So it comes as no surprise that the 2012 presidential elections would continue the trend. According to Fox News, political parties are increasingly recognizing the importance of social media within their campaigns. Both Republicans and Democrats have opened up their conventions and debates to be live-streamed on the internet, hired full-time bloggers and teams of people whose only jobs are to engage with voters via social media channels.

To put some perspective on how much social media channels have grown in importance since the last presidential elections, consider this: according to Twitter, the number of tweets sent on Election Day 2008 was “equal to about six minutes worth of tweets today.” Like businesses, politicians stand to reap huge rewards from social media—that is, if they manage to keep a handle on the conversation. With the help of social media, politicians (like businesses) are able to reach more people and, in circumventing traditional media, they are able to do so without compromising their messages. But social media is a live wire, and if businesses and politicians aren’t on their game, they also stand to get burned (a la #McDStories).

It remains to be seen which party manages to finesse social media to greater advantage, but either way, new media will play a role in deciding the next president of the United States. The good news for businesses is that, no matter how much political activity is taking place on social media channels, businesses won’t be priced out of social media they way they will with traditional media. Traditional media is finite, while digital media is unlimited. [TL/AT]