During the 2007 Roundtable event, lots of folks were asking why aren’t dealers social networking. Two years later, there are now thousands of dealers participating in some type of social network. During this year’s Roundtable, the conversation should focus on whether dealers are using social networks effectively.

The J.D. Power 2009 Automotive Internet Roundtable will take place on Oct. 14-16, 2009 at the Red Rock Resort and Spa in Las Vegas.

I will be moderating such a panel during this year’s Automotive Internet Roundtable in Las Vegas. The topic is “Social Networking: Should it be More About Relationship Building than Selling Cars?” and the premise:

A large number of the car dealers now on Facebook and Twitter use their status updates to list inventory. However, the real value in joining these social networks may be the opportunity to create relationships with both customers and colleagues alike.

This panel will cover:

• OEMs and dealerships who are using social networks effectively

• Opportunities to build relationships with current customers and potential rewards (increased visits for service, referrals, etc.)

• Advantages of connecting with fellow dealers (information sharing/collaboration, etc.)

Joining me on the panel will be a number of thought leaders and practitioners in the digital automotive space. They are:

• Christopher Barger, Director of Social Media, General Motors (@cbarger and @GMblogs)
• Jared Hamilton, CEO and Founder, Drivingsales.com (@drivingsales)
• Tom Chisholm, Midwest Sales Director, Facebook
• Eric Miltsch, IT-Web Director, Auction Direct USA (@AuctionDirect)
• Ralph Paglia, Director of Digital Marketing, ADP Dealers (@ralphpaglia)
• Janet Eden-Harris, VP Marketing, Web Intelligence division of J.D. Power (@JDPowerWebIntel)

Prior to the panel, I will be working with the other panelists and AIR organizers to start some conversation around this topic. Look for additional updates on this topic on Headlightblog.com.

Image credit:
2009 Automotive Internet Roundtable image appears courtesy of J. D. Power and Associates

Related links:

• Why aren’t dealers social networking?, DealerRefresh,12.07.07
• Agenda for 2009 Automotive Internet Roundtable

In August Automotive News launched its online community, which includes a Dealer Marketing forum.

If you gauge the worth of a message board by topics such as “What are your plans for the weekend?” or “Stupidest thing a salesperson has done,” you might be justified in thinking that the time and money invested in maintaining an online community is a waste.  Speaking as part of the team examining one such forum in detail, however, we discovered that’d be a mistake. We looked at the message board for dealership employees hosted by an automobile manufacturer, and in poring over thousands of posts there, we determined that both the manufacturer and individual dealerships would do well to monitor such forums for the wealth of information they contain. For example, that thread on the “stupidest thing a salesperson has done.” If this subject appeared on the bulletin board of a dealership portal (as it did), what might dealerships learn from it?

Well, in this case, the message thread revealed a very real tension between the sales department and the parts department.  Across dealerships, many parts employees felt sales personnel often made their job more difficult because of inaccurate information they were sharing with customers.  A savvy general manager at any of these dealerships might take a close look at the comments, then meet with both groups, enabling the one department to better educate the other in how to communicate parts issues and pricing to customers. Monitoring these online communities for dealership employees could be a valuable way to take a temperature check on employee issues and morale. Based on our findings, in what other ways could this sort of social networking among dealerships and their employees prove productive? Let’s take a closer look.

Collaboration

2008 Mud Flaps: I remember a post on these not fitting correctly on the new trucks but can not remember what the fix was.

- Employee posting on the Parts & Service message board

The value of providing an online venue for dealership employees to collaborate quickly and efficiently shouldn’t be underestimated.  Often employees can find an answer to the issue they’re trying to address far more quickly by posting a question online than by picking up the phone and flipping through their Rolodex. In fact, they’re likely to get several answers to their question, including some creative solutions, they wouldn’t have otherwise received. For example, when we looked at the Parts & Services section of the message board, we discovered one thread about tailgates being stolen from pickup trucks on dealership lots. Employees learned from the thread that this was a common problem and how other dealerships had addressed the issue.  More commonly, the bulletin board was used as an effective means to track down scarce or obsolete parts, to identify parts numbers, to share prices or prices increases and to obtain additional parts information. Those uses demonstrate that the forum acts very much as a valuable tool for employees and not just an online lounge for them to hang out in.

Reception of Products & Services

Have you all noticed that we are being priced out of the market lately? I for one, and probably MOST of us, are paid on commission of sales. If [the manufacturer] prices the parts un-realistically high, the customer walks out, and NO SALE = NO pay.

- Employee posting on the Parts & Service message board

On the Parts and Services section of the message board, the number one subject by far was the cost of parts. Employees were frustrated and sometimes deeply, ALL-CAPS angry at having to explain the high cost of parts to customers. The quote above is among the more congenial. This may not be the sort of feedback the manufacturer wants to hear, but it’s important feedback nonetheless. There may be legitimate reasons for certain parts to be costly.  If so, the manufacturer clearly needs to know how to explain that to the dealers, so their parts employees can articulate the rationale. Or maybe they should just cut the cost of certain parts.  Either way, they should consider the free feedback they’re getting invaluable.

Consider the following posts on the same product debut by two different sales people:

We are wasting way too many man hours on this at our store. Salespeople are not happy about wasting their valuable floor time.

There will be a big learning curve for the older set who choose to learn the new technology, but the younger set, who are the buyers of tomorrow, will demand this as a feature … and will not live without it.

Online communities can provide an excellent way to gauge dealerships’ reaction to new products and services.  Are they excited at a new product debut? Or concerned that they’re going to be spending an inordinate amount of time attending to a new product at the expense of making more money elsewhere?  What about the quality of training offered on new products? All of these topics were covered in detail in the posts we examined.

Brand Management

COME ON [MANUFACTURER] DO YOUR HOMEWORK!!!!!!!!!!!!!!!!!!

I think [the manufacturer] is doing the right thing in being aggressive in this technology.

That is a mistake by [the manufacturer] IMO

- Comments by dealership employees on both the parts and sales side

On the same message board, we also encountered a lot of, well, plain-speaking about the manufacturer and where various dealership employees thought it was going. Obviously, one of the biggest fears manufacturers would have over the sort of free-for-all atmosphere often typical of these forums is misrepresentation or even plain denigration of their brand. It’s a risk they need to take. Such forums probably aren’t open to the public anyway and the attitudes shared there probably aren’t unusual.  Trust the online community to address any distinctly unprofessional behavior and remember that people are likely to be better behaved when interacting within such a forum in a work environment anyway.  That’s not to say that such forums may not need to be moderated or even censored occasionally, but the very fact that employees can express themselves in such a venue allows for a tremendous opportunity for the manufacturer to understand how its brand is being perceived.  Sure, you’ll see some to and fro, but if the same brand issues and characterizations keep coming up, it’s likely pointing to a very real problem the manufacturer needs to address. Why obscure such helpful feedback? There’s tremendous value to being the fly on the wall.

The dealership environment understandably requires a lot of floor time, but allowing employees to interact socially online not only allows them to communicate more efficiently, it also provides manufacturers and dealerships with access to information they wouldn’t have otherwise.

Social Networking Options for Dealers

Here are some networking options for dealership employees, who may not have access to an internal social network or may just want another outlet.

Automotive Digital Marketing – This site was created on Ning, which allows registered users to set up social networks of their own. The garishly colorful ADM site offers profiles, a forum for posting discussions and groups, as well as blogs, a chatroom and an embedded mp3 player highlighting podcasts and advertisements. The site has more than 1,500 members and was started by Ralph Paglia, who is Director of Digital Marketing at ADP Dealer Services and based in Phoenix.

Automotive News’ Dealer Marketing forums – Currently moderated by Adrian Madland, Google’s head of Automotive Strategic Partnerships and Matt Muilenburg, VP of Product Solutions for Cobalt, these forums focus on Online Marketing and Emerging Media respectively. The forums are part of the Automotive News online community, which launched in August 2008.

Car Dealer Social Network – Another Ning site, the Car Dealer Social Network currently has more than 400 members and gives you the opportunity to set up a profile, create and contribute to discussion threads in a forum, create and join groups within the network. The site was created by James Rucker, vice president of search marketing for TK Carsites in Orange, Calif.

DrivingSales.com – Jared Hamilton started this site in 2003 as a class project when he was a student at NADA’s Dealer Candidate.  Since June 2008 the DrivingSales community has been open to all industry professionals, including dealership employees, vendors, OEMs and other professionals who want to connect with them. In addition to discussion areas, the site features vendor reviews and blogs from dozens of contributors including ADM’s Ralph Paglia and CDSN’s James “J.D.” Rucker.

Related links:

• Automotive Digital Marketing
• Car Dealer Social Network
• Automotive News’ Dealer Marketing Forums
• DrivingSales.com

Over half of U.S. auto dealers will include Internet video in their marketing mix by the middle of 2009, according to a recent study by the Kelsey Group.  To date, most dealers are supporting and distributing their online video through OEM-sanctioned templates on their websites. For example, both Longo Lexus near Los Angeles and Lexus of Manhattan feature identical video clips on their respective sites.  McGrath Lexus of Chicago supplements the 15 manufacturer-provided television and radio commercials with two clips that promote the franchise, including video testimonials from McGrath customers. Yet, with the majority of Lexus dealership sites supporting the same video console and content, one must wonder if this lack of flexibility for on-site video is a lost opportunity for dealerships to differentiate their own brand from other retail franchises in their market.

Some dealerships are beginning to break the OEM-prescribed mold through digital “ad-vertainment” that speaks more to their personality than that of the manufacturer or the vehicle.  Case in point, Massachusetts-based Clay Corp.’s Let’s Get Naked! ad, which according to a recent Advertising Age article, is a prime example of a dealership leveraging the power of viral video to entertain and, thus, leave a lasting impression on consumers. As the portly, bespectacled salesman stand-in lists the “seven different ways that dealers screw you,” he removes his suit, tie and other clothing until he is standing in a Subaru showroom clad only in his boxers and socks. Regardless of production quality or execution, the Clay family of dealership’s advertisement sends a clear message; we will show you everything, hiding nothing. This transparency is appealing considering the plethora of information, reviews and purchase options available to in-market automotive consumers today.

So why are some dealerships beginning to focus on ad-vertainment in their online video strategy?  Perhaps what we are seeing with this online video strategy can give us a bit of insight into potential efforts to stay afloat during these tough times:

• First, online video is incredibly cost effective to create and distribute.  According to Advertising Age estimates, a typical vehicle walk-around video can cost as low as $80 to produce.  While the production value of something like the Clay group’s commercials, which were created for them by Boathouse Group, are higher, online video production tends to be considerable cheaper and less creatively restricting as your standard :30 television commercial aired in a local market.
• Second, with approximately 18.4 percent of the U.S. online population (or 26,710,000 people, according to Nielsen NetRatings) using the Internet to shop for a new or used car in the last six months, and more than 94,000,000 unique video viewers on YouTube last month alone, according to comScore Media Metrics, an audience exists for relevant online video at the retail level. Dealerships can differentiate their brand by employing unique messaging that either extends the personal relationships that they have built on the showroom floor for years or attracts new consumers weighing their options during a new purchase.
• Third, with the continuing consolidation of dealerships, the extension of brand messaging through viral video can potentially help retailers develop relationships with current car owners whose last dealership went out of business. These future car buyers may be looking for a trustworthy place to maintain and service their car.

Ultimately, for dealerships looking to build their brand online, video represents a low-cost, low-risk way to connect with in-market consumers in the channel where they will do the majority of their product research.  If nothing else, we might just see a dealership go down in the viral video hall of fame, right next to Sneezing Panda and Numa Numa.

Related links:

• Beat the heat television commercial from 1984 for the Crazy Eddie consumer electronics chain of stores; YouTube.com
• October Auto Sales on Track to Be as Weak as September’s; New York Times, 10.14.08
• NADA Chairman Urges Prompt Action by Government to Implement Recovery Plan; PR NewsWire via MarketWatch; 10.08.08
• Auto Dealers to Increase Online Video, Web 2.0 Tactics in Marketing Mix; The Kelsey Group via Marketing Charts, 03.10.08
• Lexus video sections on the Longo Lexus (El Monte, Calif.), McGrath Lexus of Chicago and Lexus of Manhattan sites.
• Let’s Get Naked! ad for the Clay dealership group; available on YouTube and on the Clay Family Dealerships site.
• Car Dealers Learning Art of Viral Video (subscription required); Advertising Age, 09.29.08

Image credit
“Let’s Get Naked!” image appears courtesy of YouTube.