How ‘social’ is the Auto Industry?

Have you purchased a car recently or know somebody who has? Did a pic of the new vehicle make it to the Facebook wall?

Increasingly sharing these lifestyle events on social media are becoming more popular. Let’s face it, purchasing a new vehicle (even if its not new) is a big deal and one that many people would like to share with their friends and family. In fact, I’d like to share some recent statistics from the website.

No other medium lets you enter into the conversations your customers and prospects are having quite like social media does. These slide prove that this segment continues to grow, and the sooner you understand it, the better you will be able to leverage it, and compete.

Social Media ROI is first measured in ROE.

ROE, or Return on Engagement is often the place I start with most of my clients to measure the effect of social media to the bottom line. This ‘engagement’ comes in the form of feedback, good or bad from customers. The goal is obviously to make the good experience a great one, and the bad experience, an opportunity to turn around to good.

The first and most glaring benefit of keeping a customer satisfied is the cost savings. Typically it costs 8 to 10 times more to bring in a new customer than retaining a current customer. Investing in customer service actually has a larger impact on your bottom line. If a customer keeps coming back, your costs on a one to one ratio actually continue to go down.

On the flip side, if you tick off a customer, and make no effort to remedy that situation, that person is likely to tell 12 of their closest friends. I’m not sure where the number 12 came from, but how many people do you know that have only 12 ‘friends’ on their Facebook page? I think the takeaway here is that one dissatisfied customer will convince at least 12 people not to do business with you.

As a former sales manager at Circuit City, I know first hand the results of lousy customer service. When I was first hired, being called to the front counter a hundred times a day to deal with complaints quickly made me realize where my effort needed to be. When our ‘people’ first culture began to take shape, I saw customers personally asking for sales reps by name, and even spending more in our store because of the level of customer service they were receiving. Even in a large and transaction heavy environment I saw relationships being built, and customers returning each time they had an electronic need. Unfortunately that approach was not embraced throughout the company, and now Circuit City is just another large company that went under.

A very large company in fact, that had hundreds of stores nationwide and enjoyed a top 3 status as an electronics retailer, which leads me to my next point. We take for granted the sales we have, and only focus on the sales we don’t have.  What would happen to your bottom line, if you could get a current customer to return to your place of business 2 or 3 more times each year? I realize some businesses don’t have that luxury and have longer buying cycles, but many do have this opportunity, and miss it more often than not.

I realize many of you are trying hard, and even though you mean well, you miss the real mark here. Offering coupons to come in and buy a pie for $10 is great and you may have to do it to remain competitive, but what really is going to keep your customer coming back is a great tasting slice of pizza, and people who thank that customer, remember their names and recognize their patronage in special ways.

Why does this always sound so hokey? Ask any successful retailer what their best form of advertising is, and you always get the same answer…’word of mouth’. If that’s true, how come you don’t have a rewards program, or a real ‘referral’ program? How come you don’t ask that patron personally, to join your companies Facebook page, or to sign up for your ‘deal of the month’ club? Is it too much work…would you rather just spend 8 to 10 times more money to bring in a new customer?

Ok, I don’t want to guilt you to death, I realize you started a business to do what you love, and maybe you’re not a ‘people person’. Than hire someone who is, and make sure everyone on your staff that has direct contact with the customer is fully trained to appreciate the magnitude of a consumer who wants to do business with you. In the world of Social Media and the internet, offering these programs and keeping in touch with your consumers has never been easier, and more rewarding.

Social ROI – I’m not getting any!

There are many challenges faced by today’s business owner. In addition to the things you learn in school like, cash flow, inventory, pricing, policies and all that other fun stuff, you now are concerned with the ROI of your social media campaign.

This is one topic that even polarizes the professional marketing community with recommendations at both ends of the spectrum. This is disappointing since business owners look to us for the best advice, and hearing two different messages can be cause for concern or even doubt.
The position we take, is the same one we take when it comes to outbound advertising, ‘it takes two to tango’! Now, a quick disclaimer…I’m no dancer, but I feel the analogy works here. You can dance by yourself, and some people can make it look good, but with the right partner, everything comes together.
Those who say there is no room in Social for ‘direct response’ ads are wrong. There, I said it, but here’s the proof:

The number one reason, garnering 40% of the audience polled is ‘to receive discounts and promotions’. Nothing new here, folks are just trying to get the best deal, and stretch their dollars in a difficult economy. Are these loyal fans that love to look at your funny posts, or engage in a conversation about your new organic products that save the Earth? Maybe, maybe not, the point is if you’re not offering discounts and promotions on your page, you’re not talking to a large majority of your fans.

However, in a very close second, with 39% of the audience poll responding: ‘to show my support for the company to others’. Well, I’ll be darned, that is the other side of the argument, and I believe proves the point.

You need to post so that both the analytic side of your fans brains, who join to save money, and the emotional side of your fans brains who join to show support get what their looking for.
The ROI from the discounts and promotions you offer can be clearly monitored and tracked. The other measure you need to be aware of is ROE, or return on engagement. When you look at your page for both of these measures, you won’t be ‘disappointed’ when someone comments on your latest ‘cute cat pic’. You can take pleasure in knowing that something you posted meant enough for someone to comment on it.
Now here’s where I think we can all agree. The return on engagement is ultimately more valuable because the more engaged a fan is, the more loyal they become, and the more likely the are to do business with you, thus feeding the ROI.
So to recap, your social strategy should offer a balance between buying incentives, and engagement incentives. Learn to measure not only your ROI, but your ROE. As you increase your ROE, your direct response messages will have a better platform, and you will see the results in your bottom line.
For more social media strategy please contact John Garcia at