Social networking only works if it is not commercialized; real or perceived. Helping your staff to draw the "fine line" of building relationships rather than sales is not as easy as posting this month's creative for the dealership but it has a far superior R.O.I. for all involved parties so your staff needs and deserves your support. For that reason alone a dealership must establish a support system to leverage this valued human networking resource - not only in sales and service but in all departments - to extend the dealership's marketing messages to their staff's personal spheres of influence.

That said, the best place to pass on consistent policies and procedures while considering "risk management" for the dealership is in the employee handbook. Just ask your attorney and he will explain that "no policy" actually is a policy by "ommission." When an employee mis-represents your dealership to a customer - with or without your knowledge and/or permission - you are liable; even if it is only based on the "deep pocket" theory applied by most attorneys seeking damages for their client.

The first issue that has to be addressed is the "buy in" from the dealer that the internet has matured into a "pull/push" media rather than a "push/pull media as far as customers are concerned. As a result, the website of today is already different than yesterday's and they will be drastically different than tomorrow's. Transparency and simplicity is already a practiced wisdom in dealer's sites which have learned to prioritize relationship selling over simply posting price and product. Since it is difficult to have a relationship with a building or a corporation the people factor has to take precedence. Step one is to integrtate a dealer's blogging site for customer generated content including their staff's postings and comments.

The problem is that many customer assume that a dealer's site is self serving and they challenge the source. The only solution is independently develped "relationships" in other sgared verticals like face book, twitter and other communal sites where you are able to kmake friends who are happy to find out that - coincidentally - you also sell and or service vehicles. After all, everyone would like to have a friend in the car business!

As far as the posted point - yes, include instructions, policies and procedures for social networking ploicies and procedures in your employee handbook and enforce it the same way as the other issues that it includes.

WOW. CLAP CLAP CLAP. You have my praise!!! This is amazing. I use social networking sites to connect with everyone and anyone that I have ever met as well as people that can help me succeed in my industry. I have over 900 friends in my facebook account (ok some of you probably think that is nuts, how could someone know that many people?). Well guess what, I was very popular in high school and people always knew me for being a nice guy, a great guitar player, and a varsity wrestler so most of those people are high school alumni. The rest of my friends are anyone that I have ever worked with or communicated (yes I know every single person on my friends list). On myspace I network the same way plus with musicians that I respect. On Automotive Digital Marketing, I am always meeting new people and making new friends. I met most of the people at NADA and somehow created a relationship with these people. At the end of the day, the more people that know me the more successful I will be as long as I keep a positive reputation management system going. By the way, sites like linkedin.com and naymz.com are great social networking sites that help keep positive reputation management for individuals just like carfolks.com and dealerrater.com maintains reputation management for dealers. Now, I must say that I used to just act any other way on myspace and facebook until I started adding business contacts as friends. I was never extreme and never a crazy party animal, however this trained me to be more discrete and act accordingly not only as a social net worker but also as a human being in my daily life. After all, you need to always keep a certain image so that people respect you and see you in a certain way. I know that in my young age I needed to start doing things differently and I am proud to have matured this way. I believe that if employers trained employees to be on social networking sites and be discrete it can help improve business. I want everyone that I know to know what I do and where I work. I want them to buy cars from me and only me. I want them to send me referrals. It used to be that I would have to join a club of society to network with people so everyone knows that I am the "go to" person to buy a car. Now I can do it from the comfort of my home from my computer or anywhere as long as I have a computer and/or my iphone. The time to raise awareness of the positive business aspects of social networking is now. I am not one to brag and I am going to make this as humble as possible but my friend, Joe Webb wrote an amazing blog about social networking and myself (http://adpadm.ning.com/profiles/blogs/is-stan-sher-the-greatest). This explains how I leveraged social networking in order to be a part of this great family which includes all of you readers. It is funny too when you look at the comments.

A great article and for those who look towards the future the future shall be yours. I encourage the younger people at our dealership to include the dealership as someone may always say " I know someone" There you thats all you need. Like they say always advertise.

I absolutly agree with this article. I have around a 1000 contacts on my own page and would say I probally generate at least 1 direct sale a month form it. I have friends whom pass on my information in the form of used and new car specials. The best part of it all is it's FREE! What better type of advertising could you have when it costs nothing and generates something! Thanks Jeff, great insite!

Love the idea but I don't see how this would ever get past the corporate lawyers. If it was posted in the employee handbook seems that the Dealer would be liable if one of those worst case scenarios resulted...stalking or something along those lines.

An anecdote from the consumer's perspective:
I'm a Subaru fanatic, and a member of the local "Subaru Impreza Owner's Club". We have an online forum for all club communications, and a local dealership has a sales person and their parts manager both on the forum, with active user accounts.

We just bought a brand-new Forester from the sales guy without giving it a second thought.

The dealership and sales-person relationship was so strong because of the online social network that we 1. didn't even give it a second thought to shop at another Subaru dealership, and 2. didn't haggle on price with the sales guy. He gave us a "club member" discount which was basically the invoice + dealer options (and I know he made money on that), but we didn't mind because the social relationship was strong.

If it weren't for the online social network and the events the dealership has and continues to organize for the club, I wouldn't have known that guy from Adam, and we probably would have gone shopping for a used car and haggled and been a pain on the price.

So this is just to say that I've seen these tools leveraged to build a dealership's business and it does work. And used correctly, it makes the experience much nicer for everyone involved!

Audrey,

You and I have discussed this on numerous occasions...let me just say that your article is now on the way to everyone in the black glass building

Thanks!

I was obviously excited when I wrote my comment. Please forgive the 2 grammatical errors!!!! hahah

Wow! Congrats Audrey (for the article) and Jeff (for posting it)! Yes, we have also given this subject much thought - very much.

With about 100 million U.S. visitors each month to Facebook and MySpace alone, the potential for additional sales is huge.

And like 1998, when dealers were first introduced to websites, now they have to get acquainted with social networks.

This is exactly why we built and launched a new website that does EXACTLY this for dealerships.

Through a customized widget that a dealer can subscribe to, not only can the dealerships employees grab the widget to place it on the social network page, but potential customers can grab it to.

For the dealership's sales staff, this is a no-brainer. Nowadays, sales people everywhere have to be creative and innovative to keep there numbers up, and staying on top of the the board at the dealership is no exception.

Employees place the widget on their page, and anybody can send a lead directly to the dealership without every leaving that person's profile.

I have read this blog for a long time now and no the community allows for conversation and not site-pimping, but guys, I just have to tell you that there is a tool that does exactly this!

It's almost inconceivable to think that many dealerships will maintain several (or even a couple) of social network pages. After all, blogging never really caught on (we thought of this too.)

The bottom line is, Audrey is right on the button. Social networks represent a goldmine of opportunity for dealerships.

Anyone can drop me an email (networking is ok, Jeff?) or just check the website and I'll be happy to see if what we do can help you guys tap into this treasure trove of sales opportunities.

Great subject!

Talk about a Pandora's box! I noticed an article the other day on Drudgereport.com about a teacher who was fired for posting a photo of herself with a rifle pointed toward the camera. This was called in "poor taste". How? If we, as employees are judged on someone elses' criteria, and the dealership has the right to hire/fire based on what is on (or isn't?) on my personal page, how is that fair?

I understand COMPLETELY if I try to use my online presence to drive business to my dealer, he does have some responsibility and potenital liability for my page's content.

This is a particularly poignant article, one appropos for the time, and frankly, one I have not considered much at all. One thing is certain, adoption of Web 2.0 will be much like the adoption of Internet sales- someone will resist to the very end, proclaiming how Web 2.0 will NEVER amount to anything, and before they know it, they will have gone the way of the Gooney bird.

Live chat works well, we have been using live chat for years and the numbers prove daily that this is an invaluable service. We use ZenithBPO http:///www.zenithbpo.com which provides us with both live chat agents and click to talk.

Incentives are great because everyone wants a deal all of the time. The problems with too many incentives is that it implants the craze into the customer's head. These rebates and special rates incentives have become ridiculous to the point that if Honda does not have special leasing or special financing, sales drop. Incentives are the reason why we are moving metal. This is wrong, it makes it hard for us to actually build value and sell the car. People do not lay down for us anymore. We need to get the public respecting car dealerships and start taking away from their minds that they need an incentive to make a purchase or a lease. At the end of the day, why should I pay you to buy my car? Incentives are great but should be use properly. I blame the incentive craze for making problems for the big three.

Fishing where the fish are...

If 80%+ of your consumers are online, how do you attract them to you?

With what message?

Where do you place it?

If they respond to it, what do you engage them with? Your home page? An email where they can "Send an email?"

Would that be what you wanted if you were an online car shopper?

These are just suggestions, but how about using a message of "A 100% online car shopping experience for your next ?"

Where would you place that?

Where would you land them if they clicked on the banner ad?

Could you devise a blogging strategy, search engine marketing campaigns and video channels with a similar call to action?

By all means, let them send you an email any time they want.

Consider letting them shop your vehicles online (price, credit, interest rates, taxes, payments) in such a way that they have to tell you who they are in order to do so.

The Internet is a new medium. What is your message?

Internet consumers don't have to do anything. How do you devise your messages and site interactivity so that they want to do what you want them to do?

If 98% of your visitors leave without engaging with you / telling you who they are, then the experience you have run them through has not met their needs and they've left rather than having to deal with you.

This isn't a rant and it isn't a commercial... just sharing some insight into the psychology behind the thinking that went in to the shopping cart and conversations we have with dealers about using it effectively. The shopping cart is only a tool in the greater context of how dealers advertise and then how consumers shop and buy from you.

To me one of the great game-changers beginning to happen to automotive is the shift away from physical premise to the virtual. Away from digital inquiries (leads) to being able to really shop online. From a hostage-taking approach over info such as price, credit, payments, to letting consumers realize for themselves that they want to speak to dealership staff (can you confirm my credit, firm up my trade valuation, do a bit better on interest rate, etc.)

What do you think?

I worked for a dealer in San Antonio who cut all sources of advertising off,liners,radio,display,tv,autotrader,cdm,etc...I had to put our used cars on the internet myself,then i had 10 salespeople who posted 15 cars each on 28 different free websites,we sold twice as many cars without zero dollars spent on advertising. So now I sit at home and put other dealerships new and used cars on those same websites for a consulting fee.I had a dealer in Greer,SC sell 14 cars in two days off one simple posting.

Email HAS HAS HAS to improve.

As a former ISM from the San Francisco bay area, I can tell you that I've seen a lot of dealerships ignore the wealth of opportunity that the internet provides.

Andrew and his dealership have the right idea spending most of their ad budget online.

What I was most intrigued about was Alex's reference to "spammy email."

Have any of your gone online and acted like an online shopper would? By that, I mean you go to one of the 3rd party sites to configure a car and contact dealers thru email?

I have - and boy, what a nightmare!

Try getting quotes from about 4-6 dealers and your email box is quickly filled to the brim with every gimmicky and poorly executed marketing pitch there is.

Dealers respond to often and 90% of the time, I didn't even get a hard price quote.

My opinion is to market to customers where they spend most of their time: social networks.

I know I'm in this market and am not pimping our biz, but this topic was too tempting.

By the way, Jeff, did you go to NADA 09? I've been here everyday looking for your review!

We just finished January with our best month since opening the dealership in June of last year. One of the major factors behind it (aside from our teams hard work) was we spent 85% of our ad budget online. We had a consistent brand message across sites where in market consumers are looking for vehicles (KBB, Edmunds, Autotrader, Cars.com, etc.) Our strategy was to be in front of consumers that were actively seeking information on vehicles, we didn't try to convince anybody that now is the time to buy a car if you had no intention of buying one. Of course there are some people (to rename nameless in this post) that wanted us to spend more money on TV, more money on direct mail, more money everywhere....but we resisted and got results in both volume and the bottom line of the store.

We have also been aggressively pushing our dealerrater.com reviews to help our online reputation, and we are starting to hear more and more consumers I chose your dealership because of what was said on dealerrater.

Another thing that worked for us was market based pricing on both new and used vehicles across all advertising mediums. Let me say this, our front end grosses were not huge, but we put 86 very satisfied units into operation and spent less than 20k in advertising. With a reduced marketing budget and bonus structure for salespeople, the business was able to be profitable at this reduced per unit average.

New vehicles have been very difficult to push, as the consumer is really seeing the value in like new pre-owned vehicles (2008's with low miles) I highly suggest reading Dale Pollak's book Velocity for more information on market based pricing in the pre-owned vehicle market.

Jeff, Thanks for the Gravitational Marketing nod. I'm checking out the site now and it's a intriguing theory!

I might sound like the odd ball here, but, oh well, here goes...

There are too many technology tools.

Let me repeat... There are too many technology tools.

I recently led a sales meeting with the focus on how to improve sales in this "challenged" market. The prompting came from the dealer principal and several of his sales people asking "how can we win the customer of today?"

My response... I had the oldest sales person in the dealership speak. And by old, I mean chronologically and seniority.

What did he focus on?

Process, process, process.

This guy understands the majority of his customers shop on the internet first. He understands the best methods of communicating with his customers. And his tailors his messages for his customers. Those who like text messages, he sends them text messages. Those who like emails, he send them emails. Those who prefer hand written notes and cards, heaven forbidden, he uses his hand, writes the note (or card), places a stamp on an envelope and deposits the note in the mail.

I think we use technology as a crutch in some cases and are looking for the magic pill to attract customers. Paraphrasing one of my mentors, we have become crippled by technology. We look to technology to bring in the customers. All technology should do is aid us in servicing our customers (a big difference). If I want to get a six pack, I cannot take a pill and have a six pack when I wake up in the morning. I have to work at it. Sales is the same way. I need to work. Use all of the tools available, in their proper manner and in your process and the sales will come despite the incentives. Work your customers, maintain a relationship with your customers and they will return.

I’d like to respond to the post by Alex Snyder and the comments by Dan Morgan and Jeff Kershner.

First of all, the question needs to be: “How do we market now? Advertising is just the tip of the iceberg and only a part of the process.

Marketing to today’s generation and future generations must tap into their addiction to instant gratification, as Dan Morgan suggested, but it’s got to be done in a unique and memorable way. Dan is right on target when he says, “I think it comes down to things that we are already using…. lots of thinking outside of the box and using other avenues in order to market them.”

I believe consumers will continue to respond to the familiar incentives, but they need to be PUSHED in a way that feeds their addiction to instant gratification.

How? Start with your lot and connect it to the Internet! Take your incentives and display them so the consumer can use the incentive to get information in a matter of seconds. Bingo! You’ve done it! Make 4000Rebate into 4000Rebate.com and you’ve taken a familiar, secure, visual medium and tied it straight to your inventory in a creative and unique way. Now that’s marketing!

If you’re into statistics, 67% of consumers are already aware of your dealership just from driving by; that’s what Cobalt told us in their 2007 Dealer eBusiness Performance Study. That’s almost double the amount of awareness to your dealership that search engines provide (36%); quoted in the same study. So what are you doing with your lot that is creative? Can you bring consumers to your inventory through a simple, affordable, visual display?

I believe every base has to be covered in order to succeed in today’s economic climate. Combine your incentives, visual displays, and internet advertising to complete your marketing process. Don’t forget why your dealership is located in a prime drive-by location instead some back-alley warehouse. Use every resource you have! The incentive is the PUSH, your dealership is the PULL.

I had been telling the dealership management for a while, that the internet is where its at and where the industry is moving to. The hell with newspapers and radio. Move the money to the internet. They were sluggish in doing it. It wasn't until we were seeing a return from our 3rd parties like Cars.com and when we got our new RWS website, and got on board with VAuto that they it really hit them over the head that we need to get really aggressive and fast. We weren't going to grow and sell more, with that very old school mentality that they had. Luckily I had been saying it for a while and put it nicely to them that "I told them so back 2-3yrs ago". Now they realize whats happening and are more aware of the power of the internet. But I had already been working on SEO and website branding "stuff" that they didn't see the importance of, until now.

My thoughts on the future....
I think it comes down to things that we are already using..lots of thinking outside of the box and using other avenues in order to market to them. All of these 3rd parties definitely help with spreading the name around. But alot of the younger generation as we move along responds to instant gratification more and more (myself included since I'm about to turn 27). Prompt replies to inquiries are huge. It's incredible how many internet dept leads were lost to the non-Internet sales folks here b/c of slow response times to inquiries. Luckily it was a slap to the face of the ISM's and really helped to show the importance of the quick phone call and email response.

I'm also the Scion Champion here and I really get a kick out of Scion's abstract marketing. And that it's not all about "selling a car". It's about an image and it's all about the customer.

Gerald - you're right, but the media fuels the perception. So, how would you market to the current perception?

There is no argument these times are tough. Our dealer has been in the business for over 20 years has not seen it like this. But I don't believe for two seconds it is as bad as "everyone" (the media) is making it out to be. Remember when this all started? Mortgage defaults were around 6%! That means 94% of the loans were good, yet this became a nationals, nay, global crisis overnight. Hmmm.

The current hype has prompted many consumers to hold onto their money for now rather than buying.

For weeks we heard "what if your guys go bankrupt?" What if this, what if that. I am seeing an increase in website activity (yay!) but not a rise in leads (so conversion is dropping a little). Not sure why at this point, but the coming weeks and months will determine how severe and how close we are to the end of this financial distress. Banks holding onto assets which were given them by the Fed to loan to the tax payers is not helping the situation. I have seen a recent increase in the desire of our manufacturer to lend money, though their criteria is still pretty stiff, but at least they are now trying.

I think this will be a correction which has been needed and is long overdue. Too many dealers chasing the same customer. Cull the herd; the strong (smart and bold) will survive.

I think you hit the nail on the head so to speak. When the banks stopped lending money...my ownership group went into a slight panic mode. However; they realized we still need to do business and drive traffic to our stores. I am the e-commerce director for three of our stores. The general consensus was to advertise more online. It was less expensive and more people were exposed to it than conventional advertising.

However; being in the business for 17 years and starting with the internet when it was in it's infancy, I have seen it grow and have reaped the rewards of being pro active with the internet.

Today though,consumers are more weary. Part of it is I believe they are waiting for that great incentive laden deal. It has been ingrained in them that the auto industry is dying and will do whatever it takes to sell cars in these tough economic times. The internet has made it so easy for us to click around and see who is going to be giving 10k off of there vehicles. Times have changed and changed rather rapidly.

We are all foreign import cars who tend to have a higher percentage who shop on line to begin with. However; we are incorporating more dialog via face book and blogs with our sales people and managers at our locations. As you worded it we are trying to build a relationship with the consumer. The time frame is definitely longer and the rewards are greater as we build relationships with the consumers. It has taken a few months for us to start to see some tangible evidence that it is working for us. Our sales for January were our best month since September. We were over 30% from Decemebr and more than that from Novemeber. A lot of it has been attributed to people saying we were friendly and responsive and open about our products.

As my general manger said it " we are planting a message in their head" Look at our product when you are ready to consider a vehicle. come see us....

Times are changing and we need to change with them or we will be left out...