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There was a promise silently made by social media a few years back. It was so prevalent at the 2009 round of conferences from NADA to Digital Dealer that many might have thought that social media would eventually encompass the entire internet marketing required by a dealership to be successful. The promise was this: “Everyone’s going to be on social media in the next couple of years and you’ll be able to reach them.”

The first part of the promise came true, perhaps even more so than most had anticipated. Everyone is on social media in one way or another. Even if they are not active, from a car buying perspective, it can be assumed that members of any family out there trying to buy a car today are touched in some way by social media. It could be as distant as some of the friends of the buyer or it could be as close as the spouse and children, but everyone in America is affected by social media whether they know it or not.

The second part of the promise hasn’t quite panned out for many. There are certainly many dealers who “get it” and are able to drive traffic, generate leads, and make sales as a direct result of their social media actions. Unfortunately, these cases are few and far between. In fact, I was recently approached by “gurus” to help them find examples of dealers who were showing these sorts of successes. Even they weren’t aware of many examples of the mythical “Facebook Sale”.

They exist. We’ve seen them. They’re not quite as few and far between as Bigfoot sightings, but they aren’t easy to find.

That’s not the point.

While many will talk about the “intrinsic value” of social media, one does not have to be a Bigfoot hunter to find tangible value. It lies in understanding the effects and realizing that just as television advertising is effective without being easy to track directly, so too does social media make it challenging to find the value. The key is to look at the results as a whole by doing two things: find the numbers that can be tied in by absence and to put real indicators into place to measure the ROI properly. I refuse to try to convince dealers that there’s a value without being able to demonstrate it and dealers should refuse to accept that there is a value without proof. Here’s how…

Tie in Numbers through Absence

A dealer once told me that the only way he was able to track the effectiveness of his television advertising was to turn them off. When sales dropped, he knew that the TV ads had been working. When he turned them back on, sales went back up again.

The same premise can be applied to social media, particularly if you’re investing enough time and/or money. The sad truth that few gurus will tell you about social media is that there’s a secret plateau. They won’t tell you this because they either don’t know about it or they know that it’s not beneficial to them. The plateau is the place between getting started with social media and hitting the tipping point. Unlike other forms of marketing, social media has a tendency to remain flat up until the point that you really start to hit it hard. The difference in results between a mediocre presence and a pretty good presence is almost unnoticeable. Those who have a pretty good presence aren’t seeing much more in the way of results than those who have one that’s a notch above poor. This is the plateau.

That’s the bad news, particularly since the vast majority of dealerships today fall in between being a notch above poor and pretty good. It’s also the good news. Those dealers who break through the realm of “pretty good” can see a sharp improvement very quickly once they get to good, great, fantastic, outstanding, and beyond. I’m using these esoteric terms because it would take multiple blog posts to try to define the difference between pretty good and outstanding. It’s not about numbers. It’s not even about engagement. It’s about results.

This is where the absence comes into play. If you have a doubt about the effectiveness of your social media, turn it off for a month. Tell your vendor to stop posting and promoting. Tell your internet manager to put up a status update on the various social media sites that you’re “taking a break from social media for the month as we work on putting together something great for all of our fans”. Then, do it. Get off of social media. Don’t post. Don’t reply. You’ll still want to monitor just in case, of course. If your social media is tied into a reputation management service, don’t stop that aspect.

Everything else, shut it down for a month. Look at the numbers. Do you see a dip in traffic, leads, and sales? Make sure to take other factors into account such as fluctuations in search marketing spend, offline advertising, etc. Take those into account and check your results. If your numbers move noticeably, you’re probably getting more benefit out of social than you knew about, so you’ll want to turn it back on. If you don’t see much of a difference, it may be time to explore other options.

Put Real Indicators Into Place

For fixed ops, this is easy. All you have to do is run events on Facebook while posting “social media only” specials simultaneously on the other social networks. If you create an event on Facebook for “$14.99 Social Media Oil Change Special” and then post it on your other networks, you’ll be able to see whether you’re reaching people with the message or not. You can create a coupon on your website that is not in navigation if you want, or simply tell them to mention that they liked your store on Facebook when they’re getting their oil changed. Make sure the service department is extremely well-aware that this test is important. You don’t want them telling their “buddy” customers about it while they’re at the store.

With sales, it’s a little harder but there’s a key performance indicator that can help you make a determination about the success of your social media effort. If you go strong on social media, advertising on Facebook and doing all of the things that we ask dealers to do, you will see one number rise on your analytics – searches for your dealership by name. Getting people to click off of Facebook to go check out your inventory is ineffective. Getting the branding out there, being at the top of mind, and making sure that when people in your area are in the market to buy a car that they’re checking you out on search and on your website – that’s a true test of your social media effectiveness. Not surprisingly, the same can be done for television and radio advertising as well.

Of course, there are more tangible ways to detect it, namely traffic to the dealership itself. This is an area that I can’t talk about quite yet because we’re still testing, but the results so far have been nothing short of fabulous.

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Social media doesn’t have to be a mystery. It either works at your dealership right now or it doesn’t. It’s important to do the things necessary to check the effectiveness an understand whether or not you’re truly reaching your audience. Otherwise, you’ll never know if you can dramatically improve it by making the right changes.

http://www.internetsales20group.com
Can You Really Measure Automotive Social Media ROI? Watch This Video - Automotive Internet Sales

As a follow up to my recent blog on Internet Lead ROI, I would like to discuss another important metric for dealerships to track: the percentage of a store’s sales that can be attributed to Internet leads. Just like Internet lead ROI is not a simple formula that everyone can agree on, the percentage of sales that can be attributed to the Internet is not easy to measure.

In a recent survey we asked 184 dealership personnel this question: What percentage of your store’s overall sales is generated by the Internet department? Fully half (50%) of the respondents reported they were in the 20-40% range. Only 15% of respondents reported less than 20%, while 35% of respondents reported their dealerships attributed more than 40% of their sales to Internet leads.

Why such a disparity? I’m guessing that not every dealership answers the following question in the same way:

How do you define an Internet customer?

Since roughly 90% of your customers use the Internet before coming into the dealership, you could argue that 90% of sales are coming from the Internet, and that many of those customers don’t e-mail beforehand—they just call or walk in. But the opposite can also be true. One dealer group I know of, Homer Skelton dealerships in Tennessee, recently created a promotion for their new Payment Pro^SM feature on their website. The dealer group ran a radio campaign and produced a television commercial promoting that customers could pre-qualify for “real payments” without giving their social security number or date of birth. When the traditional ads ran, Homer Skelton saw a huge spike in visits to their website, which then turned into pre-qualified website leads. So are these Internet leads, or should they be attributed to the traditional ad campaign?

Although it may be difficult to arrive at an industry standard for what the definition of an Internet sale is, your dealership should have its own definition. Just as important as a standard measurement is tracking the performance over time so you can identify growth opportunities.

Best Practices for Improving Closing Percentages

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The most effective way to increase the percentage of sales attributed to Internet leads is to improve the closing percentages of your current Internet lead volume.

From the same survey I mentioned above, we filtered responses from the highest-performing dealerships based on the metrics they shared. The most successful Internet departments claimed the following best practices were critical in order to make an Internet department successful:

1)    Quality & Speed of Lead Response (72%)

2)    Website search visibility (66%)

3)    Management Buy-In and Support (61%) and Staff Training & Accountability (61%) tied for third.

Other choices and responses included: quality of leads (58%); quality of staff (42%); tracking & measurement of leads and ROI (33%); online reputation (33%); quality of online merchandising (33%); written policies and procedures that are closely adhered to (22%); lead mix (17%); social media involvement (14%); and number of leads per person (14%).

Dealers continue to stress how critical it is to have a process in place to prevent salespeople from closing out their own leads. It’s too easy for them to say “this lead is bad,” or “that lead isn’t valid,” and simply close out those leads, which results in a higher reported closing percentage—albeit a false one. It’s no different than if 100 customers walk through the door and 10% of those customers are lot drops, and then you calculate the closing percentage of 90 customers instead of 100.

At most dealerships, a valid lead is one that comes in with good contact information; but I have heard some salespeople say a valid lead is one that returns their attempt to contact within three days. How many customers return a single call or e-mail? Most of the time, it takes repeated attempts to get through to a customer.

So I bring up many questions here, and I’m looking forward to everybody’s responses. I think it’s important to discuss metrics so that eventually, an industry standard or benchmarks can be established, to which all dealerships can compare themselves.