Consumer targeting and trigger based marketing strategies are the future of dealership advertising. The “shotgun” marketing strategies of the past are not only ineffective, but they are expensive and can potentially turn customers away if they are irrelevant to their specific need or buying position.
Traditionally, dealers have used the four channels of communication, email, mail, text and voice, to target and market to their existing client base. More sophisticated dealership marketing utilizes specially designed software applications to sort and filter DMS data to send targeted sales and service offers to customers at key touch points during their buying and ownership lifecycles.
While these traditional communication channels are still highly effective, more and more dealers are extending their reach by incorporating Facebook and other social media networks as part of their marketing strategies. Dealers are now turning to social media marketing and advertising as the “fifth database marketing channel” with the hopes of improving their market penetration and increasing the reach of their intended message to ultimately sell and service more vehicles.
Unlike traditional communications, which are normally sent once and a consumer has the ability to delete or ignore, Facebook ads appear for a period of time within the consumer’s news feed. This allows for increased consumer touch points throughout the lifespan of the ad, making it easy for your marketing message to reach the consumer when they log into Facebook.
Why is it important to leverage the power of Facebook and social advertising?
Believe it or not, independent studies find that nearly 94% of buyers gather vehicle information online before visiting a dealership. In fact, 50% of a buyer’s purchasing decision is influenced by their Facebook friends, 43% will use Facebook to search for a local dealership, and 80% will not visit a dealership with negative reviews on Facebook. Not to mention that Facebook has over 1.49 billion monthly active users.
With statistics like these, it’s easy to see why Facebook and social advertising are important to include in your marketing mix. They offer your dealership an additional communication channel that builds brand awareness with its massive online community while allowing you to engage current and potential buyers. In turn, they also increase your dealership’s online presence and drive additional business to your store.
What is the true reach of Facebook advertising?
The Pew Research Center conducted a Facebook study on how individuals and brands engage on the social media site and concluded:
- 71% of U.S. adults currently use Facebook
- Of these, 70% actively engage with the site daily
- 65% of active users frequently or sometimes share posts or comments on Facebook
- The brands who are socially devoted on Facebook receive 3.5 times more user interactions than non-socially devoted brands
Let’s take these findings one step further. A recent study by Datalogix found that Facebook ads subliminally plant an idea in the reader’s mind to introduce them to a product or service. Other studies have found that people on Facebook are normally in a very good state of mind because they are reading about and following the activities of their friends and families. Because of this positive experience, imbedded Facebook ads create a much higher awareness for the promoted product or service so they are not easily forgotten by the reader, therefore extending the reach of an advertiser’s marketing.
What is the potential downside to Facebook advertising?
This is a great question to ask yourself, since most, if not all, advertising has a downside. If the content or messaging of the Facebook ad is irrelevant or not specific to the individual recipient, you could end up causing a negative impact. Very few people appreciate it when a company tries to market their products or services to them when there is zero relevancy to their buying behaviors or purchasing needs, creating an intrusion of personal space. This negative marketing impact not only happens with social advertising, but with traditional marketing as well.
For example, a local Chevrolet dealership promotes generic sales and service offers to everyone on Facebook who lives within a 15 mile radius. What are the odds that the intended audience on Facebook is either in the market for a new Chevrolet or, more importantly, is receiving the correct marketing for their specific ownership lifecycle position? What if they don’t even own a Chevrolet, but are now receiving Chevrolet specific service offers?
Irrelevant marketing on social media is no different than the traditional “shotgun advertising” dealers have become accustomed to using. The difference here is the intrusion of a consumer’s personal Facebook feed with unrelated offers and messaging. When today’s consumer receives unsolicited or irrelevant offers, they are more likely to either opt out, mark the ad as spam, or develop a negative association towards the brand.
What’s the secret to effectively advertising on Facebook?
It’s clear that studies have shown people are more apt to respond to a Facebook ad or any other marketing piece when it is relevant, requested, or expected. Simply put, advertising must target an in-market consumer who has specific needs and is in a buying position. Remember, unlike traditional communications which are sent once and a consumer has the option to ignore or delete the message, Facebook ads appear over a period of time within the consumer’s news feed.
Let’s use the same Chevrolet dealership from earlier as an example. Assume that the factory has a specific offer for the 2016 Chevrolet Malibu that includes a rebate and 0% APR financing. What if that Chevrolet dealership tapped into their DMS to obtain a list of every customer who currently owns a 2010-2012 Chevrolet Malibu, has a strong equity position, and lives within a 15-mile radius of the dealership? Seems fairly easy, right? Then, using Facebook’s advertising platform, this dealer can find the Facebook pages of these targeted database customers to launch an ad only to these specific Malibu owners.
If this same Chevrolet dealership took his targeted Facebook ad and paired it with his traditional communication channels (e.g. email, text, voice, and mail), he would have the ability to deliver a well thought-out, multi-media strategy that not only increases the reach of his marketing, but also improves his advertising’s effectiveness.
How does a dealership’s Service Department benefit from targeted Facebook advertising?
If you’re like most Service Managers, you understand that not all customers are the same, nor are they motivated to return to your Service Department in the same way. The most effective way to communicate with service customers and influence them to return to you is by segmenting them into four categories based on frequency of visit and dollars spent per RO, which can be extracted from your DMS. The four categories break down as follows:
- Most Loyal Customers – These customers spend a lot of money and visit regularly for routine service. They typically do not require a discount to prompt them for service.
- Major Service Customers – These customers have fewer visits per year, but spend the most money per visit. They typically only come in for major services, but can be motivated to return more often with reminder communications and discounts for minor services.
- New Vehicle Owners – These customers need to be conditioned into visiting a dealership for service work with consistent offers and communications to promote loyalty.
- Lost Souls/Defectors – These customers are not loyal to any dealership and require regular communications with creative offers and discounts to re-engage and become loyal service customers.
By using these service customer categories as a guide, it is easy to understand why unique service offers and regular communications are required. This approach will allow you to make the right offer to the right customer at the right time without sacrificing gross profit.
Segmentation of service data, based on frequency of visit and dollars spent per RO, easily allows you to leverage targeted Facebook ads with specific offers to market to each of these four service customer categories. Utilizing social media advertising in partnership with your service reminder campaigns will allow you to effectively communicate with your customers, leaving a lasting dealership brand and product impression, and continually driving business back to your Service Department.
Why aren’t more dealers using Facebook advertising to promote their Service Department?
The truth is, very few dealerships are using Facebook or social media advertising in general. Of the few who are, most only use broadcast ads to create awareness for their brand, but are not connecting directly with their existing customers to promote their service facility or recommended service schedules.
Why would dealerships not leverage all five database marketing channels? There are a number of reasons dealerships fail to promote their Service Departments with Facebook advertising.
- Lack of Facebook or social advertising knowledge
- No defined Facebook or social advertising strategy
- No way to connect with existing customers through Facebook
To create Facebook and social media advertising success, you must form a comprehensive strategy that works in conjunction with the four traditional communication channels. Partnering with a digital marketing vendor that can extract DMS transaction data to deploy triggered Facebook advertising, along with automation of email, mail, text, and voice campaigns, is a perfect first step. You’ll improve your service marketing effectiveness, lower your overall advertising costs, and reach customers with relevant messaging.