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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.

 

Facebook Promoted Posts: Are They Right For You?

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Facebook’s Edgerank algorithm—the formula used to determine the order content appears in a given newsfeed based on which content is deemed most relevant to that user—may make the Facebook experience more seamless for casual browsers, but it’s a challenge for businesses that harness the social media platform as part of a marketing strategy. After all, thanks to Edgerank, each post on Facebook only makes it onto the newsfeed of about 12-17% of its fans. The fans that do see it are more likely to be those that have already chosen to visit your page, or that regularly interact with your posts. Edgerank’s feedback-loop effect makes it harder than ever to reach and engage consumers that don’t self-select your business’s content.

To counter those daunting odds, Facebook recently introduced a new service allowing business pages with greater than 400 “likes” to pay a fee to promote individual posts. This new feature allows a page owner to select a single post, which could be a status update, photo, video, question, or offer, and pay a premium to increase the reach for that post beyond the circle of fans that are already engaged with your content. Not only that, but promoted posts are supposedly more likely to be seen in the newsfeeds of friends of fans, too.

Promoted posts have a one-time, pre-set budget that remains in place for the life of the post.  While setting up a promoted post, you will be asked to choose a budget from a suite of options that includes the post’s estimated reach at each payment level. The promotion can be suspended or stopped at any time regardless of whether your maximum budget has been used. Promoted posts do have some targeting capabilities, including geographical location and language, but these can only be applied to posts that are less than three days old.

Sounds Great—but Do They Work?

I set out to test the promoted posts feature on my blog’s fan page (which has 613 fans) to see how it performed versus a normal, “organic” post. I’d recently created a page on my blog that consists of a dedicated list of available educational events and conferences for automotive dealers. I shared this blog page via a status update on May 23rd, prior to the launch of Promoted Posts. The post performed as expected, reaching roughly 13% of my page’s fans with a marginal viral reach (a measure of how many impressions came from non-fans who encountered the post because a fan of the page shared or interacted with the post).

  

Keep in mind that my Facebook page isn’t particularly active, nor do I put too much effort into engaging my fans, which limits the reach of posts. I mainly use the page to post blog articles, so I don’t expect high engagement, but these statistics are in line with the average reach reported by others.

On June 2, I decided to test out the new Promoted Posts feature. Upon creating the new post, the only option presented to me was to pay $5 to reach an estimated 300 people.

The post I promoted was essentially the same as the previous one – a status update which included an external link to the same page on my blog. I did no other social media promotion at all for this post and let it run for the full three days.

Here were the results:

  

As you can see, the post exceeded the estimated paid reach (with 324 rather than 300 paid impressions), and it also reached 1200% more non-fans (13 vs. 164) via viral sharing, substantially increasing exposure to my fans’ social networks. Organic displays also increased by almost double (70 vs. 132). The promoted post didn’t increase engagement but, the post itself wasn’t really designed to encourage engagement. I also didn’t see a noticeable difference in traffic to the external page on my blog, with the average number of daily visitors to that specific page remaining roughly the same.

Two interesting side notes: First, Facebook defines paid results as “the number of people who saw your page post in an Ad or Sponsored Story.” But when signing up for the service, Facebook never mentioned that my promoted post could potentially be displayed via an Ad (on the right of the newsfeed) versus as a Sponsored Story (within the newsfeed itself). In my estimation, Ads constitute weaker exposure than Sponsored Stories, but I have to assume that at least some of the paid exposure for my promoted post came via Ads.

Second, as mentioned previously, I was initially only given the option to reach 300 people for $5. However, when I looked into promoting another post following my initial trial, I was given a second option to reach 700 people for $10, as well. This tells me that Facebook underestimated the results they could deliver.

Are Promoted Posts for You?

As in any form of advertisement, you must have clearly defined goals before spending any money. Here are some questions you should ask yourself before making a decision one way or another regarding promoted posts.

1.    How large is your page’s fan base? Keep in mind that the larger your fan base, the more potential reach each promoted post will have, which will result in a higher upfront cost.

2.    Are these actual customers, or are they a random assortment of individuals who were collected in an effort to grow the number of fans at all costs? I consider fans to be relevant if they are potential or existing customers who could realistically do business with you—whether that’s via sales, service, or parts—and whose social networks will, in all likelihood, include more relevant people. In the case of dealerships, for example, it does you no good to increase exposure to people outside your PMA, vendors, or anyone else who doesn’t have the ability to spend money with you. Note, however, that the geo-targeting option does allow you to more efficiently reach relevant fans.

3.    What is your goal for promoting a particular post? Is it to increase engagement? Increase exposure for an offer or event? Share important information with your fans? Lead people to an external website or conversion page?

In my opinion, promoting a post just for the sake of promoting it is ill-advised. If you have clear goals in mind, you should be able to accurately track whether your money was spent wisely. Did you actually increase engagement, and was that engagement by new people rather than those who already regularly engage with you? Did more people take advantage of your offer? Did you receive more traffic (via Facebook) to the external link you included in your post?

If you’ve built your fan page organically via your website, in-store signage, or via inclusion in other marketing channels, I could see a promoted post helping to jumpstart your page by potentially increasing your fans via increased exposure to THEIR networks. Keep in mind that the majority of the people you will be reaching already like your page so, in my opinion, the greatest potential of Facebook Promoted Posts is in its ability to extend your exposure beyond your fans and into their social networks.

That being said, a well-thought-out promoted post with clearly defined goals has the potential to increase reach and revenues—all at a relatively low cost.

via the June 2012 edition of the 3 Birds Marketing newsletter

Google Cars Encourages Dealer Trades

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Yesterday, Brian Pasch posted a great article with the first examples of a new live Google product called Google Cars – Google’s entry into the 3rd party lead provider business for car dealers.

Other than all the obvious tactics that other third-party lead providers employ to maximize revenue from a consumer lead (as illustrated by Brian), I did some digging and found another component of their program that I thought was very interesting.

In Google’s support article explaining the program exists this piece of advice for consumers:

“If you see a particular car (specified by a unique VIN) showing in a dealer’s inventory, you may be able to get that car from other dealers as well. Dealers often times trade inventory with each other, so you can buy from the dealer that you prefer.”

What?!?!

The only way Google could have a dealer’s inventory is via the dealer feeding it to them. If you’re a dealer sending your inventory to Google, be advised that Google is telling consumers that if they find the exact car they’re looking for (down to the specific VIN) in YOUR inventory, that a consumer doesn’t have to buy it from you.

In my internet sales career, there were many times that myself and a competing dealer were working with the same customer online. One of the things I always had to look at was if the exact car the customer was looking for was available and who had it. There were plenty of occasions where the only convenient place that had the exact car the consumer wanted was my dealership. One of the strongest value propositions I had when quoting and/or trying to convince a customer to do business with me versus my competitor was that I had the car.

Since Google doesn’t release the consumer’s information to the dealer, it’s going to be much harder to identify the cases in which my competitor is working the same customer and trying to sell them a car that I have in stock with the intention of dealer trading with me for the vehicle.

One has to assume that only dealers providing inventory and/or participating in this program have the “Contact Dealer” button available as not every dealer does (as illustrated in the image below).

cars

As you can see in the example above, it appears that dealer C and F are participating in this program while dealer D and E are not based on the existence (or absence) of the “Contact Dealer” button. So, as a consumer, I’m guessing that only inventory from dealer C and F would be available for a consumer to view. However, using Google’s own advice, I now know that since dealer D is closer to me, I could hypothetically buy dealer C’s car from dealer D.

I don’t necessarily want a provider that I am paying telling the consumers I am paying to attract that they can buy MY cars from my competitor.

My other thoughts on Google Cars:

Not only is this new program by Google hijacking dealer’s SEO efforts by making Google Cars the “most relevant” result in searches but the inventory itself is hosted on Google’s own site which could also eliminate the need for a consumer to visit your own website.

Google is also considering the vehicle results delivered via search as “Sponsored” versus organic results so now they are also competing with you for your PPC ad placement.

It’s going to be pretty difficult for dealer’s to NOT participate in Google Cars. Unlike other third party lead providers who rely on organic result positioning and PPC ads, a dealer can combat this if it has an aggressive SEO strategy. Google, on the other hand, is always going to deliver their program at the top of the search results, right above the first true organic search result.

Does anyone truly believe Google is going to bury their income-producing program in search results?

On top of this, Google’s recently formed automotive division has been invited to (and spoken at) many of our industry’s educational events in the last year or so giving advice and “assisting” dealers when all along they were preparing to bring to market a product that would compete with those very same dealers for not only their money but also in their search engine marketing strategies.

Google is the new Honey Badger. They don’t care. They’ll just take what they want.

Do Consumers Want It To Take All Day To Buy A Car?

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I answered a question posed on Quora about 6 months ago. The question was:

Why does it take so long at a dealership to buy a new car?

“Once the price is agreed on, the loan or lease is approved and they have your down payment, why do new car dealerships drag the car buying process out by making you talk to sales managers, account managers, loan managers, etc. etc.  and have you sit and wait for their people to sign paperwork.  Used car dealers don’t seem to do this.  Why is buying or leasing a new car a multi-hour inconvenience for the customer?”

My answer was as follows:

“In many cases, it only has to do with the inefficiency which that dealership is run. Typically, all these people are talking to you so that you don’t get upset for the wait so they’re just trying to keep you busy. They may also be waiting for a response from banks about the loan (keep in mind that many sales managers base the interest rate on their knowledge of what the banks will “probably” give you and not until a deal is accepted do they actually input all of your information and send it to the bank for an official approval. Whether they do this will depend on your credit.) They also have to get the vehicle ready for you to take delivery. This entails a thorough washing and detailing as well as putting gas in the vehicle. The finance manager has to get all the paperwork ready for you as well. There are many factors that could be a reason why you have to wait BUT many dealerships nowadays have made the process more efficient for customers as they know that many people feel like you so they are making their processes more efficient so that your experience is more pleasant.”

A new answer was posted a couple of days ago that floored me:

“I feel your pain… but unfortunately I think most people like the fact that it takes so long, and that’s part of why dealerships continue to do so.

Buying a brand new car is a big deal and has huge significance economically and, more importantly, culturally.  I don’t think most new car buyers would be happy if it was as simple as swiping their credit card at the grocery store (though I would be) because they might have buyers remorse immediately after… things wouldn’t add up… this is such a huge deal, why didn’t it feel like it?

By taking all day, and exhausting you, I think they lessen the chances that you will change your mind or be unhappy with the purchase… because it’s going to feel like you just ran a marathon… and no one will walk away feeling like their big day wasn’t just that.

Also they love having you in the dealership all day, it’s the perfect way to maximize their chances of selling you add-ons with your purchase and have you look at your next dream car.”

It certainly wasn’t an answer I was expecting. (The person who answered is a mechanic but it’s unclear whether he’s an independent or at a dealership.) Personally, I always wanted to complete a transaction as quickly as possible (both when I was on the floor and while in the internet department) and had no interest in being tied up with one customer all day. It never crossed my mind that a consumer may actually want it to take all day to complete the transaction.

Do you think there’s any merit to his theory that consumers WANT (or NEED) to take all day buying a car to emotionally satisfy their large purchase?

All Salespeople Are Liars

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For almost 3 years, I have been posting a comic every day on my Facebook account. I do this because I like to think I bring a smile to at least one person a day. I look through comics every morning in my attempt to share a “good” one. Yes, believe it or not, I do put effort into choosing which comic I post. I’ve started noticing a disturbing trend. Many comedians use reality-based comedy and it seems this also translates into comics. Syndicated comics, by their very nature, are designed to be funny and appeal to the masses. I see comics like these below on a regular basis and, personally, I do not find them funny. In fact, quite the opposite.

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We all know that the history of sales (especially car sales) has earned us a bad and, some would argue permanent, reputation amongst consumers as being deceitful, manipulative and… well.. liars.

I think everyone can agree that, as an industry, there have been a lot of changes in how car dealers do business. Some of these perception-shifts have been due to the fact that consumers not only have more access to information but also because they have access to more dealers. In the past, consumers were limited to dealers in their local area. The number of dealers they could realistically get prices from and shop was limited by how many they could physically visit and how much time they had on their hands.

The increase in the amount of information available to consumers brought the ability to access more dealers in less time. It has also brought consumers a quick and easy way in which to analyze not only different prices via internet quotes but also to identify who they want to do business with. There have been many debates and opinions over time in various automotive industry forums on how dealers should interact with customers and how much information they should share as well as hostility towards consumers, vendors, OEMs and websites for sharing information which effects a dealer’s ability to profit from a sale. In my opinion, this only fuels the stereotype. Consumer’s have access to this information and it isn’t going away. Attempts to take it away and/or make it less available only serve to promote the negative image. Consumers already don’t trust dealers. Hiding (or reducing) the amount of information available to consumers will only make them trust dealers less.

No matter what you do, you will not be able to change this stereotype for our industry as a whole. You can, however, change how you do things at your store… which is a step in the right direction.

Here is my opinion on best practices:

  1. Be transparent. If a customer asks for information, give it to them. It doesn’t matter if they ask you in person, over the phone, via an e-mail or via a 3rd party lead submission. Chances are they already know the answer. Any attempt to dodge, evade or avoid answering the question will make the customer think you have something to hide.
  2. Establish and maintain a solid online reputation. Yes, consumers are increasingly looking at the various review sites and using that information to help decide whether to do business with you.
  3. Give consumers “real” numbers up-front. Many consumers already know most of them anyways. Don’t try to undervalue trade-ins or manipulate numbers on a pencil. The days of “scraping them off the ceiling” are over. This is an “old-school” mentality and its only outcome is detracting from your dealership’s integrity. They may still buy the car but they won’t leave with a great impression of your salespeople or dealership. Of course consumers are looking for a “good deal” but, I believe, they appreciate honesty.
  4. Get rid of bad apples. If you have salespeople or management staff who lie to customers, play games, or fudge numbers or information. Fire them. They will only hurt you in the long run. Customer don’t have loyalty because you didn’t earn it from them.
  5. Take care of your customers. Your customers are your life-blood. Dealerships have more income potential in fixed-ops than in sales. Treat them like royalty and they will come back.
  6. Pay attention to your customers. Many dealerships never contact customers post-sale until the dealer believes they may be in-market again. Follow-up processes should not simply be about selling them another car. It should be about appreciation. Call them on their birthdays and anniversaries. You have a better shot at selling them another car by not trying to sell them another car.
  7. Stop treating salespeople as expendable. Most customers don’t expect their salesperson to work at your dealership long. Be a company people want to work for. Reward and encourage employees to stay around. Get rid of managers that are quick to replace salespeople. Customers will notice.
  8. Engage your customers. Don’t just pop in and out of their lives to tell them about your upcoming sale. Once you’re in their lives, stay there. Use social media, blogs, newsletters, customer appreciation events, and any other tools you can to remain not only in their lives but in their minds.

While doing these things won’t change the perception of our industry as a whole, it CAN change the perception of the most important person in existence….

Your customer.

How Reviews Stop Buying Decisions

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First, it’s been way too long since I’ve blogged. For those who care, I apologize. I’ve been very busy in my new role with a great company, 3 Birds Marketing, and I’m very grateful that they invited me to join their team.

We all know that reputation management is mandatory in today’s digital world. Consumers have increasingly more information at their fingertips and there are more choices than ever out there. With auto brands barraging consumers with marketing, consumers are continuously relying on reviews to help make buying decisions. Studies show that consumers have more confidence in reviews left by other consumers than any other type. Everyone knows the importance of building and maintaining a solid, balanced reputation across all the review sites.

When can reviews actually stop the buying process?

I’m NOT talking about someone choosing WHO to buy from necessarily. Part of the problem is that consumers are so overwhelmed by reviews about your PRODUCT that not only is it essential to maintain a great reputation as a DEALER but to also pay attention to reviews about your brand and models.

Here’s an illustration I found that details pretty accurately what can happen:

original

Has this ever been you?

How do you prevent consumers from progressing past panel #1 in that comic?

Imagine this scenario… A customer comes into your dealership. They find a car they like. They go online on their phone to see if they want to do business with YOU. While reading your dealership’s reviews, they also come across product reviews from consumers saying positive things not only about YOU but also about the car they are trying to decide upon. After deciding they are comfortable with you, it’s possible that a consumer wouldn’t then feel the need to progress to product reviews on other sites and it could help avoid the progression illustrated in the comic.

In addition to not only building a solid reputation online across ALL review sites (not just focusing on a single site or two), why not also encourage your customers to say great things about your BRANDS and models?

There’s no reason why you can’t ask your customers to write a review about the car they purchase from you. Not only does this add to your reputation but it provides relevant and fresh content that could assist your dealership in not only appearing in name searches on Google but also brand and product searches.

There’s no reason why you can’t leverage consumer product and brand reviews on all of your review sites that can assist your dealership in gaining exposure that your competitor wouldn’t have.

If a consumer is trying to make a decision NOT on whether to do business with YOU but on whether to purchase your PRODUCT, a good mix of both types of reviews can certainly help prevent consumers from progressing to indecisiveness.

In Defense of TrueCar

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There’s been a lot of talk about TrueCar lately in automotive industry forums blasting them for their business practices and how “evil” they are. There’s a thread on DealerElite with over 33 PAGES of comments [edit: 50+ pages] in response to Jim Ziegler’s question:

“TRUE CAR and ZAG Cyber Bandits: Parasites or Good for the Car Business?”

..and even a video from Jerry Thibeau of Phone Ninjas who has a very strong opinion:

(Edit: I guess TrueCar didn’t like the video. It appears that they had it removed.)

My experience with HomeNet Automotive (the leading automotive data distribution company now owned by AutoTrader) gave me unique insight from all perspectives: vendors, 3rd party inventory sites and dealers.

Whether you think TrueCar is good or bad for the automotive industry, you have to step back and consider a few things:

(In regards to TrueCar having, and using, a dealer’s sales data) In the early days of inventory marketing, it was the general thought that having your inventory on every 3rd party site possible was a great idea. Most dealers signed up for every 3rd party site they could, especially if it was free. When I was an Internet Director, I signed up for them all also. When I was with HomeNet, I talked to many Dealer Principals that wanted their inventory everywhere. Most never read any “terms and conditions”, they just signed up. Any of these third party sites could have been polling their DMS for not only inventory but sales data and they never would have known. Nothing’s free. It wasn’t until recently that people started questioning the wisdom of shotgunning their data and, even then, it had nothing to do with whether the sites should have it but how it was effecting their SEO efforts and how the sites were using their data to collect leads then selling those leads to the dealer. It had nothing to do with the fact that they HAD the data in the first place.

When HomeNet Automotive integrated TrueCar into their inventory management tool, (IOL Pro), as a rep, I visited many dealers who loved the TrueCar feature and ability to use reports to close deals and research competitor pricing. Only a few even questioned where the data was coming from and in only one case was a dealer actually upset that we (ie. HomeNet) had the sales data at all. The fact remains that this data was given voluntarily by the dealer to hundreds of 3rd party sites, each with their own terms and conditions, and any of which could have been polling their DMS for sales data and, in turn, providing it to TrueCar, Edmonds, AutoTrader, etc. or any of the hundreds of other sites.

(In a now amusing tangent, industry people demonize Reynolds and Reynolds all the time for protecting their data (ie. not allowing unauthorized 3rd party access) and throttling their control over distributing it to just anybody and now these same people are complaining about 3rd parties having the data.)

Now, onto the lead program.. People are complaining that TrueCar leverages the dealer’s data (which the dealers are giving to countless websites already) to provide consumers information on the lowest prices for vehicles, converting the lead and offering it to the dealers on a per sale cost of $300 versus a per lead basis. Why is this so evil?

There are plenty of 3rd party sites that do the same thing with the only difference being that they charge per lead. Hell, even MANUFACTURERS do it. When I was in retail, I used a company with a similar pricing strategy named Autotropolis (since bought by Autobytel for $15 million). I LOVED those leads. I could easily identify a lead from them and factor in the $250 per sale fee into any deal structured or quote given to a consumer. I only paid when I sold a car. It was great. At least on a per sale basis, my cost per sale was fixed. With 3rd party leads, it wasn’t. I hear dealers complain about $900+ costs per sale with their AutoTrader programs yet they still participate. The point is that I was always in control of the sale. If I didn’t want to sell the vehicle at the pricing given to them, I didn’t. It was my choice. The fact is that I would rather have the opportunity to earn the sale than not have it. Why wouldn’t you want a fixed cost per sale on internet leads? 

Dealers have been sending their transactional and inventory data to 3rd parties for YEARS. This isn’t some new phenomenon that’s all of a sudden appearing. Everyone wants to single out TrueCar when, in fact, TrueCar is only ONE OF MANY companies that have their data. Dealers have willingly and happily provided this data to 3rd party sites for YEARS (at least as far back as 2003 to some sites that I personally know of).

To top it all off, dealers and industry professionals have been evangelizing transparency in their sales processes, pricing and interactions with consumers yet it appears that dealers don’t really want transparency, what is wanted is the illusion of transparency.

Bottom line: If you don’t want your data used by a 3rd party, stop giving it to them. I’m not just talking about TrueCar, I’m talking about EVERY 3rd party.

TrueCar is a business that pays for information received from the dealers themselves. Rather than demonizing TrueCar for monetizing the data by providing a service to both consumers (via transparency) and dealers (via sales), don’t participate.

As the saying goes: Don’t hate the player, hate the game.

(Edit: TrueCar is just a scapegoat and convenient target. I don’t necessarily disagree with all of the arguments, just the placing of the blame on TrueCar. Dealers created this, not TrueCar.)

UPDATE 12/1/11: Seems as if my friend Jerry created a new video.

Inflatable Gorillas vs. Social Media

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The question I hear asked the most by dealers when talking to them about social media is “What’s the ROI? How do I measure that?” The problem with getting a buy-in from them is that they want to see a straight line between a Facebook post or tweet and a sale. Sometimes that’s possible but most of the time, it isn’t.

gorilla

My rebuttal is, “What’s the ROI on the inflatable gorilla on the roof? How do you measure that? Do you have a source in your CRM for “Gorilla” similar to the infamous “Billboard” one you have?”

Inevitably, they can’t answer that question. Funny thing is that even Google got into the “gorilla” game when they posted an ad for PPC advertising stating that Google Adwords would have “tons of customers headed your way” and implying that the gorilla would not (which they were promptly sued for by the makers of inflatable gorillas).

googlegorilla

The most common thought is that the giant inflatable gorilla gets people’s attention (just like the weekend tradition of “ballooning” the cars. Nobody that I ever know of said that they stopped at a dealership and bought a car because they saw a gorilla on the roof. In fact, it’s quite the opposite. I’ve seen many comments by consumers that say inflatable gorillas are insulting to them. Some have even said that they are an indicator of an “old-school” dealership and would avoid these dealers at all cost.

Social media, on the other hand, when done properly, can increase customer loyalty, satisfaction and referrals through engagement with your customers. There are TONS of examples of this result from HUGE companies (Ford, Southwest Airlines, etc.). I’ve NEVER heard a customer say those things about a dealership using social media (with the exception of dealers that spam their customers with inventory).

Let’s assume that you can’t track ROI on social media (which is incorrect) and that you can’t track it on an inflatable gorilla, which end of the spectrum would you rather be on?

There’s only one way I could see an inflatable gorilla actually working and that’s if it can do this:

….jump off the roof and physically drag customers in.

So, if you’re willing to put an inflatable gorilla on your roof, balloon-up your lot every weekend, have a “hot-dog food fest” or any of the other things that surely have people (presumably) slamming on their brakes on the freeway to come to your dealership and buy a car, then why wouldn’t you have a presence on social media whether you can measure it’s ROI or not?

What do you think of giant inflatable gorillas on car dealerships?

Why The First Car Dealership Groupon Failed

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In a first, a dealership in Michigan partnered up with Groupon to offer Groupon’s first car buying groupon. The deal offered was $500 off the purchase of a vehicle for $199. Keep in mind that Groupon typically takes 50% of the price of the offer (in this case about $100) if the Groupon is successful (ie. meets the minimum purchase requirements). So in the event that the minimum of 10 deals were sold, this promotion would have cost the dealer $1,000. Not bad.. IF 10 cars were sold.

The deal failed. Why?

In my opinion, there are several reasons.

First, any kind of “deal” needs to have value to a consumer. This deal didn’t have that because consumers “expect” to negotiate with the dealer and $500 off the purchase of something that could cost $10,000-$40,000+ is just not “enough.” The deal itself cost $199 so, in reality, the consumer is only receiving a $301 discount.

Second, the offer needed a minimum of 10 people buying it for any of the 4 people that DID buy it to be able to use it. Since only 4 people bought it, those 4 people were never charged the $199 and the offer was never “live” for them to use. Obviously, if someone is willing to commit to spend $199 to get $301 off the price of a car, they are not only planning on buying one, but they are planning on buying it from THAT dealership. Seeing as the deal quantity wasn’t satisfied, you now have at least 4 people who think that either A) the deal isn’t a good one; B) something is wrong with the dealership; or C) all of the above. I highly doubt Groupon would provide the dealer with the names & contact information of those 4 people as that would circumvent Groupon getting any of the money.

Third, this Groupon, being the first of its kind, got some great press yet, when contacted, the General Sales Manager didn’t respond to inquiries. Those would have been golden opportunities for some exposure they wouldn’t have been able to buy. Rather than “seize the moment,” if you will, and take advantage of those opportunities, the General Sales Manager chose to engage potential buyers of this deal straight on Groupon in ways that, I feel, would have DETRACTED from the perceived value and may have actually discouraged customers from participating. Here are some of the comments he left:

VALUE GUARANTEE OFFER!!!!
In the unlikely event that we are unable to come to an agreement on a vehicle purchase/lease, for whatever reason, I will honor your voucher toward $199.00 in our service, parts or body shop departments. Purchase accessories, have routine maintenance done or have those annoying dings, dents and scratches repaired. 

So, now the General Sales Manager is saying pay $199 for the coupon and, even if you don’t buy a car, I’ll honor the coupon in our parts, service or body shop… in the amount of $199. Where’s the value there for a customer? That’s just pre-paying for things. Give me $199 and you can have $199 worth of “stuff.”.

William P visited our store yesterday. He selected and test drove the vehicle he was interested in. He worked out all of the pricing details with our sales staff until he was satisfied with the pricing. He THEN AND ONLY THEN explained he had purchased the Groupon voucher but needed a vehicle immediately. We reduced his amount due by $500.00 and honored the voucher in order to accommodate a customer. He took delivery today. We’re still confident that the sales requirement will be met.

This comment was left BEFORE the Groupon was satisfied (ie. 10 deals were sold) which further reinforced the fact that customers really didn’t need to purchase the Groupon to get the $500 discount since the above referenced customer, who may have “committed” to purchasing the Groupon, ultimately was never charged anything for the Groupon since the minimum quantity sold wasn’t met, making the Groupons invalid.

So, while customers are bantering within the comments of the deal over the true value of the Groupon, the General Sales Manager chose to try and convince everyone it was a really good deal and that they should buy it by making statements that detracted from the value of the offer and, at the same time, failed to take advantage of the free exposure. There were almost 50 articles written about this offer. All of which could have been turned into golden PR and marketing opportunities for the dealer – if the dealer had responded.

This is a perfect example of why you should carefully analyze any deals/social media offered on such a large scale. Many dealers have website pop-up coupons that have the same offer “$500 off a car.” In fact, this particular dealer has a STILL LIVE “special offer” pop-up which features the Groupon offer (even though it’s now expired), even further detracting from the value of the Groupon.

I’m not surprised that this offer failed. Groupon is ultimately in the business of making money. Since the deal r
equirements weren’t met (meaning nothing was sold), Groupon didn’t make any money further reducing the chance that they will participate in any future similar Groupon offers by dealers.

If you’re considering trying to run a deal via social media or bulk offer sites (ie. Groupon, Living Social, etc.), you need to make sure that the deal is truly a good value for the consumer and only offered via that promotion. The dealer could have leveraged this deal in many ways even if they didn’t sell any cars from it. As you can see, while this deal is not available to buy anymore, it still exists in internet-land both on their website and via search engines and it’s even on the first page of a Google search for “Lafontaine Auto”. This is almost as bad as having a negative review because it plants the seed to a prospective buyer that $500 off a car at your dealership isn’t worth $199, which, by extension implies that a $301 discount isn’t valuable.

Don’t jump into social media unless you know what you’re doing. If you do, your promotion can backfire, just as this one did.

Carpe Diem

By

“Progress always involves risk; you can’t steal second base and keep your foot on first” – Frederick Wilcox

People like comfort and fear change. In today’s economy, people are afraid to take risks whether in business or in their personal lives. In our industry, change is continuous yet nobody wants to do it.
A new sales manager comes in and forgets the fact that his predecessor was probably terminated because he/she did not perform yet they are afraid to do something new to change that cycle. The definition of insanity is doing the same thing over and over and expecting different results.
Since dealership turnover of sales personnel is considered a normal part of the retail sales department in a dealership, new managers feel that the solution is changing personnel. Why? Because that is a change that conforms to expectations.
Whether the change involves processes or vendors, I guarantee that success doesn’t come without risk. If you, whether in your personal or professional life, are unwilling to take risks to achieve different results, you will fail just as the person before you did.
Our country was built on change. Most successful people in business made a change, whether that was by doing things differently or thinking outside the box.
If you’re not achieving the results you need and/or are being demanded of you, the worst thing you could do is maintain the status quo.
Be open to change. Embrace it. Think outside the box.
If you don’t know what to do, learn. If something isn’t working for you, change.
If you live in fear, you will never achieve success. Whether that is increasing sales, employee morale, or getting better results from vendors.
Do what you want to be doing, not what you are being forced to do because you are living in fear.
Carpe Diem.
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