Is Social Media Relevant For Car Dealers?

Some automotive retailers are skeptical of the ROI of social media. Here’s an inside look at how industry players are leveraging platforms to connect with buyers.

The world of retail automotive has new players. Companies like Carvana, TRED, and Beepi have gained tremendous industry attention and VC dollars in the past year. These reformers digitally infuse the used car buying and/or selling process – allowing more of the transaction to happen in front of a screen instead of face-to-face with a salesperson.

Rising Web, mobile, and social media usage spans generations and demographics. But does it really suggest that screens trump human interaction? Or are these platforms just becoming a mandatory element aiding the awaiting in-person exchange?

The new normal for establishing a relationship

Actor and comedian Aziz Ansari, recently undertook a massive social experiment coupled with insights from academia for his release of “Modern Romance”, an amusing analysis of how we develop relationships in a digital age. Ansari attests that the most intimate relationship a person has is with a screen, aka the cell phone.

Ansari sites a study by the University of Chicago psychologist John Cacioppo. According to the research, between 2005 and 2012 more than one-third of couples that got married in the United States met through an online dating site. The once taboo form of finding a love match has become the biggest way people met their spouses – surpassing work, friends, and school combined.

According to Pew Research Center (and shown in the graph) 73 percent of all Internet users use social networking sites. For users age 18-29 the statistic is 90 percent. Recently, Facebook reported having 1.55 billion active users monthly and a mobile user base that checks their news feeds an average of 15 to 20 times per day.

What does it mean for my car dealership?

These social behavior statistics may suggest that the way we establish credibility within a community and develop relationships has a new found “digital door”; an expectation that entry to human connection and relationship management has a required online element, made increasingly simple through social media.

Consider this, according to DrivingSales CX research, 25 percent of shoppers who visited the dealership didn’t want to talk to anyone; i.e., they wanted to shop and browse. Social media has a term for that, too. It’s called lurking. A common reference to it in the marketing community is the 90-9-1 rule. It suggests: 1 person creates content, 9 engage, and 90 are silent but attentive readers, also known as “lurkers.”

“A dealership’s social media profile is not an art museum, but hopefully should convincingly answer the question of “do I want to do business here?” when someone consumes years of your history with a few swipes of a finger,” Aaron Wirtz recently wrote in a blog post.

Wirtz is the media & marketing manager for Subaru of Wichita (formerly Suzuki of Wichita) and Super Car Guys. Wirtz started his career with Ride Auto Group in 2012. After submitting a video resume, he visited the dealership for his interview where he immediately realized he wouldn’t be working at a traditional dealership.

Used cars are core to the group’s business model. In the last two years, they went from one used car store selling around 75 a month to averaging around 300 cars across three stores within the Wichita metro market. The Subaru store’s used sales equal or surpass new on a monthly basis.

Wirtz says he applies two schools of thought when executing marketing messages for two strikingly different brands. Whether you’re talking about Facebook versus Instagram or a used car shop versus a franchised Subaru store it’s about consistency and relevancy for the given audience based upon the platform and role each message plays in the aggregate brand image.

“Take your pick of platforms. When ingested altogether, your talent for content creation and curation tells a story. The question is – is it the story you intended to tell? Is it a true story?” Wirtz continued. (Wirtz gained massive attention in the automotive marketing community and beyond when his creative response to union protesters outside his store went viral and landed him on national news.)

“But Facebook doesn’t sell cars” – most dealers in America

For dealers, establishing a long-term relationship with car buyers (through positive customer experience) is key to continued success in repurchase and fixed ops revenue. DrivingSales alone spent nearly $1.5 million in 2014 and 2015 in a 16 month-long ethnographic and quantitative research initiative with over 1,300 shoppers and buyers to identify what customers really want out of buying a car.

While innovations in technology certainly aid improved CX, more traditional industry players aren’t aiming to take people out of the equation. Sonic, with its One-Sonic, One-Experience and EchoPark initiatives, is pairing technologies with investments in training, changing compensation plans, and tailoring traditional processes to improve the human piece of the retail automotive experience. As dealers tune their human engines to a more friendly process, will TV, radio, and traditional word-of-mouth drive customers to the showroom to meet their new and improved sales teams?

Trace Przybylowiz argues Facebook does sell cars

Trace Przybylowiz, Autos Lead at Facebook, recently addressed an audience of dealership professionals at the DrivingSales Executive Summit in Las Vegas. Przybylowiz acknowledged (as many did at the conference) that the road to the sale is evolving for retailers. He shared that while organic reach opportunities on Facebook have diminished as the user base exploded, new capabilities utilizing first- and third-party data algorithms allow Facebook to help businesses identify and target profiled customers through authentic identity.

“Fish where there’s fish,” Przybylowiz fondly recounted a dealer’s summary of one of his similar technical presentations. He agreed with the simplification and added, “I can find exactly the fish you’re looking for. I can tell you what kind of scales they have, what color their eyes are, what fins they use, what water they swim in, what bait they feed on.”

Dealer partners he has worked with have strategically targeted customers with precision and scale. Paragon Honda in the greater New York area tested Facebook “custom audiences” for their vehicle exchange program. Traditionally the program was marketed using direct mail. The store utilized their DMS data to identify customers in equity and matched them to real people on Facebook. Once the custom audience was identified, Facebook served the customers a mobile ad for a $9.95 oil change. What were the results after two weeks? Under $500 in advertising converted to eight cars sold. The Honda store converted four in-equity lease owners into new leases and sold four CPOs. Additionally, they realized an 80 percent savings over direct mail marketing and achieved a 48 percent service coupon redemption rate.

“Social media is my barometer” – Marti Eulberg, Sonic Automotive

Marti Eulberg, director of brand management at EchoPark, utilizes social media in a variety of ways at Sonic’s first strictly pre-owned venture. EchoPark reaps the benefits of cross branding on social platforms when they invite local food trucks to feed guests a couple Saturdays a month. Photo-friendly delivery bays in the front of the store are designed to celebrate the delivery and she said customers share their excitement on social media.

Eulberg said “Echo” in their name reflects that the team at EchoPark is listening to their customers to deliver on their promise that “every car deserves a happy owner.”

“Social media is your test today, because they’ll say what they want to say and we can’t control it,” she said.

EchoPark isn’t the only company using social platforms to listen. MasterCard recently conducted a retail social listening study utilizing more than 1.6 million posts to analyze consumer opinion on shopping and retail. The study reported, “Using publically available social media conversations provides a unique and relatively new angle of analysis. Consumer opinion on social media tends to reflect more of an “in the moment” conversation, and additionally consumers are often speaking without filters.”

Keep an eye on Aaron Wirtz and Subaru of Wichita

We asked Wirtz what was on the horizon for 2016 at Subaru of Wichita. His latest tactic is uniquely utilizing social media to make introductions to the greater Wichita community at both a consumer and business level. He recently sat on a Wichita Business Journal panel discussion on social media best practices and the role it plays in developing a brand. As organic reach is getting “choked” he’s turned his focus to the affect he can have in the community as a thought leader on the subject.

“As dealership professionals, we have comparatively higher budgets for advertising and marketing than most local businesses,” he shared. Wirtz believes utilizing this position and offering knowledge and insights connects him to more vehicle buyers.

Facebook might not sell cars. But, social media is engrained in our lives and it uniquely leads to human connections. Social media is not a set it and forget it strategy for dealers; it’s a moving target. Businesses that choose not to engage on social platforms are potentially forging a gap in their business’s virtuous cycle: showcase your personality, invite them to engage, listen to what they’re saying, respond … and repeat!