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Car Dealer Facebook Fans More Valuable Than Internet Leads

Car Dealer Facebook Fans More Valuable Than Internet Leads

Facebook fans of a brand provide more value as customers
than non-fans,
according to [pdf] a new study from digital
consulting firm
Syncapse Corp.

Average Fan Worth about $137
The average value a Facebook fan provides a brand is $136.38, but it can swing to $270.77 in the best case or go down to $0 in the worst. This value is based on Syncapse analysis of five factors per fan: product spending, brand loyalty, propensity to recommend, brand affinity and earned media value.

On average, a Facebook fan participates with a brand 10 times a year and will make one recommendation. Value can differ significantly by individual brand. For example, in the case of Coca- Cola, the best case for fan value reaches $316.78 but is $137.84 for an average fan.

Toyota saw the largest variability, with dealers reporting gross profit $159.79 more Per Vehicle Retailed (PVR) than non-fans. Buick saw the lowest value with a difference of $28.52. Factors influencing these differences may include both product and demographics.

Ralph Paglia advises that these differences are less an indicator of marketing performance, and more a confirmation that Facebook fans are more valuable customers than those who are not. It is probable that these numbers can be influenced by a number of factors, including sales penetration, brand health, product life cycle, as well as Facebook marketing success. This study did not investigate these mitigating factors as they could vary greatly depending on region, make, and model category.

Jeep had the highest variance of loyalty between fans and non-fans with 42.5% of fans indicating a heightened likelihood of continued product usage. Mitsubishi saw the lowest difference in loyalty, only 15.83% between the two groups.

Fans Continue Use, Make Recommendations at Higher Likelihood
Facebook fans are 28% more likely than non-fans to continue driving a brand, and are also 41% more likely than non-fans to recommend a fanned make and model to their friends. Overall, 68% (on average) of Facebook fans indicated that they are very likely to recommend a car or truck across the 20 top leading brands. This is contrasted by 28% for non-fans.

BMW built MINI led all brands covered in overall likelihood to recommend with 81.4%, followed by Honda with 79.4%. Notably, the lowest likelihood to recommend by fans was still quite favorable at 59.5% for Hyundai.

Facebook Fans Influence Others
Becoming a Facebook fan has a demonstrable impact on others. Thirty-eight percent of respondents reported that they would likely become a fan of a vehicle make or model if they saw a family member or close friend do so. This influence is slightly reduced to 34% if it is a person known through Facebook rather than a family member. Likelihood to test drive a vehicle if somebody else became a fan is 44% if it was a close family member or friend, moderating to 36% for a Facebook friend.

Research indicates that 81% of fans said they feel connection/empathy with the vehicle brand, compared to 39% of non-fans. Another 87% said they felt warmth, gratitude, happy or satisfied, compared to 49% of non-fans. Most brands show a significant gap in results between those who are fans and those who are non-fans. Ralph Paglia advises this provides further evidence of the value of an audience to a car company or dealership and the necessity of factoring in fans as a key aspect of long-term automotive digital marketing value.

Social Engagement Aids Branding
Dealers seeking to increase top-of-mind awareness and vehicle purchase intent should consider engaging consumers via online social networks,
according to a recent study from The Nielsen Company and Facebook.

Consumers who were exposed to a standard homepage ad on Facebook had 10% higher ad recall, 4% higher brand awareness and 2% higher purchase intent than consumers who were not exposed. In addition, consumers exposed to Facebook homepage ads with social context (i.e., the ad includes a list of people on the viewer’s “friend list” who are registered fans of the make or dealer), had 16% higher ad recall and 8% higher awareness and purchase intent than non-exposed consumers.

About the Data: Syncapse partnered with Hotspex Market Research to conduct a 25-minute survey using their online panel. Data was collected from more than 4,000 panelists across North America in June 2010. Findings were then analyzed contrasting fans and non-fans for these top brands: Ford, General Motors, Toyota, Honda, Nissan, Chrysler, Jeep, Dodge, Mercedes-Benz, Kia, Hyundai, Acura, Infiniti, Volkswagen, Audi, BMW, MINI, Subaru, Suzuki, and Jaguar.

Views: 515

Tags: Car Dealer, Facebook Fans, Internet Leads, More Valuable


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Comment by John Cisar on July 26, 2010 at 8:32am
Great discussions. This is why ADM discussion is bittersweet to digital marketers. I'm already off track in my daily tasks. I'm of the mindset comparing cost metrics to earned $ value of lead type isn't an apples to apples comparison despite an apparent correlation that social influence marketing may promise low cost/ high impact marketing when effectively planned and executed.

After I read what was released of the study in the PDF document, a few questions were raised on my end, perhaps because I wasn’t clear on how the parts of the whole $137 “fan value” metric were calculated?
1. Spend
2. Loyalty
3. Recommendation
4. Earned Media Value
5. Cost Offset of Brand Acq.

In the worst case scenario, the study reports a fan is worth $0. But I don’t believe this takes into account fan impact made by negative brand influencers who end up causing opportunity loss by turning people away from a brand. Earned media value vs. Lossed media value.
Yes social media is largely "earned advertising" via holistic brand ambassadors comprising persons of peer influence and brand affinity. That being said, this study only concludes the unique earning value generated by a brand fan, and offers no direct measure of fan value thru fan influence, to measure the dollar impact a brand ambassador creates on their network of peers who then in response become a fan and purchase brand goods or services. Is there a more comprehensive version of this report?

Comment by Katie Urbain on July 20, 2010 at 5:29am
@Ralph - I love your flashback! I can only imagine.

I could not agree more with your opinion on FBConnect leads. Do you mind if I quote you on the last part? "But, it is still a lot better than a conventional sales lead from a 3rd party lead provider." :o)
Comment by Ralph Paglia on July 19, 2010 at 6:22pm
@Katie - We have our BuzzTrack III set up with FacebookConnect along with the integration Facebook allows, and yes indeed these additional info points can be extremely helpful to sales professionals who are either trained or experienced enough to know how to use them properly... I have to LOL when I have flashbacks to one of my "eFinance" guys screaming at a customer who had submitted an online credit application;

"Hey buddy, you better not hang up on me again 'cause I got your god damned social security number and I know your wife's maiden name and where you work!"

One of the issues my team struggles with is all the constraints that Facebook puts on us for the FBConnect integration... But, it is still a lot better than a conventional sales lead from a 3rd party lead provider.
Comment by Ralph Paglia on July 19, 2010 at 1:56pm
@Bill - In the auto industry, PRODUCT is the Big Kahuna! However, it is difficult to say that GM has not had GREAT product over the past 5 years, as well.

And, as you already know, when ever a strategy, tactic or process is perceived as a competitive advantage, everyone involved is restricted from sharing data publicly. That said, aggregate data from non-OEM affiliated implementations is available. This will be what I use for the Digital Dealer Conference workshop I am presenting around what, how and where to measure Social media ROI...
Comment by Bill Playford on July 19, 2010 at 1:06pm
Ralph, I'd be interested to see how that data compares across all manufacturers. You have to admit that the mystery blue-oval OEM you are referring to happens to have some really great product right now. Isn't safe to say there's some correlation to the "buzz" effect?
Comment by Katie Urbain on July 19, 2010 at 12:39pm
Hi Ralph.
I agree with you completely. While I have been in the marketing industry for quite a while, I have a ways to go to catch up to you in the learning all the car dealer nuances, so I really respect and appreciate your experience and knowledge. I definitely need to watch how I word things. When I refer to using your “heart & soul” I mean the heart and soul of the dealership. I will be more specific next time I talk about the sharing of who you are as a dealership being an important message to relay.

I love your angle when you point out the two varying types of leads. We definitely want #2, of course! We are working on how to get even more information than that even, always looking to make it all better.

Wouldn't you love to add information to your #2 data set such as what their hobbies and interests are, what other businesses they frequent, what type of cars they are building when they Build their Own, what types of cars they are viewing when they check out inventory, when they need service, what kind of car they currently own and the service details on it, and more? Would any of this information be helpful to closing a lead? I am eager to get this capability into the hands of dealerships, not only will it give them all this information, but some added tools to make good use of it.
Comment by Ralph Paglia on July 18, 2010 at 10:59pm
Sometimes common sense eludes us... Two types of customer data files:

1. Name, email, a phone number that nobody answers and a request for your lowest price.

2. Name, email, a cell phone number, a work number, where customer works, where they went to school, who they are married to, how many children they have, links to their blog, twitter, business website, a list of friends, a direct communication pipe to the consumer that is unfettered by spam filters, and a history of what is important to that customer that a dealership employee can study... Oh, and they just signed up to become a "Fan" of your dealership...


Comment by Ralph Paglia on July 18, 2010 at 10:52pm
@Katie - For those of us who have spent time in the automotive social media marketing trenches, we know what you are saying about what is essentially "Genuineness" is true... But the way you describe it will scare a lot of people away! Not everyone wants to bare their soul about what they believe in or what they are willing to put effort into on the social web. \

My experience over the last few years has been that driving increased volumes of profitable business into your dealership using social media marketing and reputation management is a lot easier than the passionate descriptions and detailed "tactical checklists" that my own team uses...

It really is about letting the social web become a way of doing things at the dealership... The REAL value first starts by getting dealership employees involved. In the case of multi-location dealer groups, the increased communications between the different locations on best practices and operating practices will in and of itself pay for the entire social media marketing program in a dealer group... My idea? No, not at all... This is what several dealer groups have told us! I could not make this stuff up... I have on film a dealer principal describing how the increased levels of communication throughout the dealer group, among the different dealerships empowered by the social network we built for the group's use yielded incremental profits and cost saving over the first 3 months that covered the annual cost of the entire program...

Since then, one store, that's right... One dealership out of 9 in this particular group has sold 63 new Nissans to customers who drove from outside the area to buy from THAT Nissan dealership because of the reputation management and various community involvement projects showcased in the dealer's online social web postings... Including the #1 reason more people came from out of town to buy from that Nissan dealer... Pathfinder the Dog... Yup, the "Canine Romance Blooms at Nissan Dealership" and "Stray Dog Saves Nissan Dealer Thousands of Dollars" and other stories has drawn more people to their dealership than any other aspect my team's writers have focused on...

These are the types of things that happen when a team of professional social media marketers (SoMars) writes a MINIMUM of TEN articles a month about the dealership on top of customer reviews and ratings, videos, photos, slideshows, tweets, etc. for a dealership.

I am actually uncomfortable posting all the details because it works so well, but is limited to ten dealers per SoMar... As it is, I need to hire and train two more.
Comment by Katie Urbain on July 18, 2010 at 4:32pm
I have enjoyed reading this discussion Ralph & Steve. You both have good points. I strongly believe it all boils down to the fact that in social media you get what you give.
If you throw some posts on your FB page, without believing in it & not putting much thought into it you will attract fans that don’t feel much about you.
If you constantly try to Sell, Sell, Sell combined with giving away little freebies on FB – well, now you’ve just attracted deal seeking, lowest price finding fans who are always going to go after the best deal.
BUT, if you passionately engage in social media marketing with your heart & soul, giving customers stuff (tools, information & community involvement) you truly care about and have thought through – well now you are talking. The fans you will attract will appreciate you, know you, trust you, and (do I dare say it) Like you! Now you’ve got some real value in that fan. As a matter of fact, they have now become the invaluable brand advocate who will share their feelings about you with others. This is the real value of social media fans – we are sharers by nature, so if you hook one of us with truth and passion, now you’ve hooked a bunch of us by word of mouth.
So next time you are brainstorming your social media strategy, decide what you are passionate about giving and what your customers will love to have – and go for it.
We went for it. And we are so excited to give customers a real valuable application to add value to their social media efforts. Dealerships will now be able to give customers a FB tool to help them track and plan their car maintenance and service. The tool will alert car owners when a factory recall is announced for their vehicle. Customers will be able to share cars they are dreaming of or shopping for with friends, helping them get advice and make their decision. By getting this tool from the dealer, the customers are extending their relationship with the dealer, making it more frequent, and making it infinitely more relevant for the dealer and the customer. And here is the best part – the application users will be given a 1-click option to submit an iLead, no form to fill out! Now you’ve turned more FB fans into iLeads without a hard sell message – can you put a $$ amount on that?? If you are skeptical, I encourage you to see for yourself.
Comment by Ralph Paglia on July 17, 2010 at 7:42pm
@Steve - Your math may make sense at the outset, and of course the questions around why is a "Fan" a "Fan" are every bit as relevant as when a dealer questions whether or not an Internet Lead from a third party lead provider would have found the dealer's inventory and submitted a lead from the dealer's website, if the dealer had not allowed their inventory to be displayed on the third party lead provider's site.

Rather than speculate, or develop fuzzy logic and conjecture, I personally feel more confident in conclusions or cause and effect relationships that I discover from first-hand real-world experience... For example, a VERY respectable dealer my ADP Social Media Reputation Management team has been working with for over a year, applying a full suite of Digital Marketing, Advertising and Social Media Reputation Management strategies and tactics, now averages a fairly consistent 600 to 800 leads per month from their primary eCommerce site. Omniture Site Catalyst shows us that a consistent 48% to 52% of those lead forms are being completed by visitors referred from the social media sites and network we set up and maintain for that dealer...

Despite our attempts at using "sourced" forms as landing pages for social media sourced traffic, because of people bouncing around the dealer's eCommerce site, we can only isolate about 25% of the leads from traffic referred by the dealer's social media sites/profiles/network (using unique lead forms) once it gets into their BuzzTrack Lead Management tool. Over the last 12 months, those 25% of all leads that we can clearly identify as from social media site referred traffic were converted into a sale at DOUBLE THE RATE OF ALL OTHER LEADS RECEIVED BY THE DEALERSHIP...

Now, of course, since the traffic from the social media sites is primarily from "Fans", "Members", "Subscribers", "Followers" and "Friends" (consumers, not employees and suppliers) who have been exposed to the dealership for quite awhile and they are clicking on the links for RFQ, Test Drive Requests, New and Used Inventory, etc. when they are ready to buy a car, this is what one would expect... But, it is still a more valuable lead than many of the others... Even before we LOOK AT THE GROSS PROFIT MARGIN FROM SOCIAL MEDIA SOURCED LEADS...

Yes, the Average Gross Profits PVR from leads identified as being sourced from social media sites is significantly greater than leads from other sources... What is significant? I will share the data at Digital Dealer 9 in October during my Social Media ROI Workshop. But, I can assure you that the differential will cause you to ROAR IN DISBELIEF!

Why do I say that? because for those of you who seem to believe that Social Media is a waste of time, you sound like the dealers who refused to take Internet leads seriously 10 years ago... I am OK with that, because there are many people who pull me aside today and say to me:

"Ralph, I thought you were full of s*** 10 years ago about the Internet's increasing impact on car dealerships, but everything you said would happen, has happened... Where do we need to be to position our stores for maximum profitability in the future?"

Ten years ago I invested a lot of energy trying to understand why so many people in the car business who were otherwise intelligent and experienced business professionals could ignore the facts and statistics that pointed anyone with an open mind to the inevitable conclusion that the web would become a major force in automotive retail... This time around, I am older and wiser, I know that there will be a backlash and resentment, combined with blatant ignorance of the facts right in front of them, for may people in our industry to take social media marketing seriously.

That's OK, because like every major force to emerge in automotive retail, there will be a small but ever increasing number of dealers who will be just a little bit more "aware" of the facts as they appear. These are the dealers who will emerge over the next 10 years as the industry leaders and most profitable operators, with an ever increasing market share and stable of franchises.

I wish I could say something "Al Gore like" and say I "discovered" automotive social media marketing... But that would be a false statement. I was pushed to develop tier 3 social media marketing strategies and tactics by an OEM client in late 2007... The very same car company that manufactures the make of vehicle which now holds the greatest USA market share for new car sales YTD in 2010. This particular car company spends 40% (conservative published numbers) on Digital Marketing... 25% of which is invested into SOCIAL MEDIA MARKETING.

So to Steve and the other naysayers out there; Would you like to tell Mr. Mulalley and Mr. Farley that what they and their social marketing team are doing is all wrong, a waste of time and effort... That they should listen to you and realize social media marketing is bullshit?

About three years ago, I responded to requests to develop a tier 3 social media marketing and reputation management strategy with a certain degree of skepticism, out of context facts posing as reason, and misguided logic similar to several of the comments to this blog post are expressing... Basically, too much denial and contempt relative to curiosity and seeking to learn new ways to sell more cars.

However, I was fortunate to have people at two car companies, and several dealers who are smarter than I am push me in the direction needed to accomplish the mission they assigned to me and my team. We did, and we learned and we received funding and performance based "risk gain" financial incentives to find ways to make social media marketing work at the dealer level.

Our early OEM funded prototypes have gone on to become part of several VERY successful dealerships, and the 100 dealers my team is currently serving with non-OEM affiliated social media marketing and reputation management services are experiencing success with it as well.

Not all sales leads are created equal... The leads that result from social media marketing and reputation management startegies and tactics close at a higher rate and generate more profitable sales and service transactions... SIMPLY A PROVEN FACT.

I sincerely hope that every supplier outside of my team at ADP that provides consulting services and various dealership intended "solutions" continues to be as skeptical as possible about social media marketing. Hopefully, as skeptical as so many were about the Internet in general ten years ago, so they will give me and my team about another 18 months to further enhance the 3 year lead we have right now.

In the meantime, watch what happens to Ford Motor Company's market share and the sales and service market share of the dealers my ADP SkySong Social Media Marketing and Reputation Management team is proud to serve... Healthy skepticism is a good thing... PLEASE HANG ON TO YOURS FOR ANOTHER 18 TO 24 MONTHS.

That's all we need to get so far past all the other suppliers in this business, they will never catch up to our already considerable lead in technology and experienced people resources. That way, by the time I retire, my ADP stock will be worth enough for me to do whatever the heck I want... Maybe even enough to buy dinner and beverages when I run into friends like each of you!

Let me clarify something. I am certainly NOT SAYING that ADP, any car company or supplier has Social Media Marketing all figured out... Although we certainly have a head start!

What I am saying is that if you believe that you must have your lead management processes perfected before you start developing social media marketing capabilities, then you will never get to social media marketing before you start losing market share! That would be the same logic that many dealers cited ten years ago when they would say something like:

"I cannot invest any time or resources into setting up an Internet Sales Team until I get these people to handle the customers they are getting today properly! Every day there are customers who walk into this dealership to buy a car and they are handled so poorly, they leave without spending a dime.."

NOW is the time for dealers to start developing their social media marketing and reputation management skills and capabilities... NOT when the day comes that they handle Internet Sales Leads as best as they possibly can, because that day will never arrive!

Here's a few images I picked up off some of Ford's social media marketing assets... Automotive Social Media Marketing is working for Ford Motor Company and it is working for my ADP Social Media Reputation Management clients as well:

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