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Social Media Marketing -- Should You Manage It In-House or Outsource It?

Most people know that I'm generally not a proponent of social media for most dealerships simply because the fact is that the ROI for either a) exposure, b) brand equity, or c) sales simply can't be justified relative to other dealership marketing expenditures.  I've debated people on this topic in ADM and other forums because, well, that's what these forums are for...to discuss/debate/ideate different solutions to help dealers be more successful in the market place (as an aside, bless KK's heart...she must think I'm the social media devil, or at least a major a-hole, because of my tenacity on the subject.  In all fairness, she's really a trooper for putting up with my tenacity, and does have great ideas/insights, so in all seriousness, I hope we can chat more about this over a beer at a conference in the near future...=) 

 

Because of my background, I'm generally an "operational" consultant, and work with dealers/OEMs on strategy, process improvement, financial statement analysis, working capital, profitability/ROI/ROS, pay plans, recruiting, etc., hence my focus on fundamentals versus "shiny objects."  Even so, my exec friends at OEMs, at their AORs, at media outlets like Fortune/CNN, etc. share these sentiments too...that social media ROI is weak, hence why they don't spend much here compared to their digital or traditional marketing expenditures.  Even a prominent e-commerce dealer (and speaker/panelist on the circuit) just said to me today that social media should never even be considered by any dealer who hasn't first mastered traditional/digital/brand marketing strategies, not to mention having an effective lead management process too...further adding that since most dealers fall into this category...well, you get the idea of where he was going...

 

HOWEVER...I have always maintained that social media does have a place for those dealers that have 1) the brand horsepower to get and keep people's attention, 2) a well-coordinated marketing plan for traditional/digital/social media, and 3) the expertise and capability to execute that plan well.

 

From an operational perspective, there are many things a dealer can do in-house or outsource...be it cleaning carpets/mats, to DX's, to washing/detailing cars, to taking and uploading photos for your new/used cars, to e-mail campaigns, etc.  So when it comes to social media, what should a dealership do?  The short answer in my opinion?  Farm it out.

 

While there are pros and cons to both managing social media in-house or outsourcing it, here are the realities for the AVERAGE dealer:

 

  1. Most people just aren't very good at marketing...be it traditional, digital, or social (if they were, they'd probably be working in marketing/advertising instead of at a dealership).  If you're going to do something, do it right and do it well...hire a professional agency that knows this space well and don't kid yourself...having a personal Facebook page does not make you a social media expert for a complex business like a dealership.
  2. Turnover is unavoidable in the retail world, so relying on one in-house person to create/maintain/manage the content, personality, and reputation of your dealership is risky...you're putting all your "reputation eggs" in one tenuous basket.  While customers naturally prefer connecting with a person versus an entity (especially in a SOCIAL media environment), if that person leaves your dealership, gets hit by a bus, or whatever, you will be very hard-pressed to maintain that online "personality" going forward, and whatever social media brand equity that person may have built for the dealership will be at risk.
  3. Along these lines, effectively managing your social media presence requires consistency and continuity in generating relevant content.  One in-house person simply does not have the knowledge, expertise, or time to do this properly or effectively.
  4. A key component of social media is managing negative feedback.  Again, one in-house person will unlikely have the time or skills to manage this very important responsibility properly.

 

So like a lot of things, while the average dealership theoretically COULD manage this in-house, I would recommend hiring a professional agency instead...your dealership's social media image and reputation are too important to risk in the hands of an in-house amateur that more than likely won't be there long-term.

 

Now, for dealers with the scale, dynamics, and operational logistics to manage social media in-house, do it professionally, and generate a positive ROI in the process, I would still highly recommend hiring a professional agency or consultant to help you set this up properly because again, just because you can play around on your personal Facebook page and send irrelevant tweets to some followers does not make you a social media expert.  There is much more to social media marketing than you think, so hire an expert to help you do it right, and do it well.

Views: 43

Tags: agency, charles kim, facebook, marketing, sales, social media, truecar

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Comment by Jennifer Schrader on June 17, 2011 at 10:27am

Charles - Great post. We come across this a lot when speaking to dealers about this subject as this is what we do for dealers.  Many dealers don't have the time to to manage a social media strategy let alone finding the right person internally to do it for them.  What I have come across is when the dealer grabs up someone internally, A profile page is created. First big mistake. 

 

In order to have Social Media to work properly and effectively for branding etc having a team work for them helps them in the long run.  Anyone can create a fan page, but what's important is creating fans, engaging them and keeping them there. 

 

It's no easy task and this is why dealers are starting to push their social media efforts to outsourced companies, that specialize in not just creating amazing looking pages but creating fans, engaging the community & most importantly creating a strategy specifically for the dealership themselves. 

 

Again Great post! 

Comment by Brad Kelly on June 14, 2011 at 1:13pm
Excellent post Larry, I think you hit that one out of the park.
Comment by Larry Bruce on June 14, 2011 at 11:45am

Ok lets cut the crap shall we... 

If you cant talk on the phone, if you cant send an email, if you cant use a computer... You can't sell a car....period 

 

With that said social media has 2 functions:

 

1. Communication - Without communication social media is useless. Followers, friends and fans need value to continue to follow you. Value can come from 2 things 1) special offers JUST for social media followers (if it isn't exclusive it isn't SPECIAL) 2) good customer communication and service. These are the reasons a customer will follow, friend or fan your store.

 

2. Marketing - using our follower base interests & intent to make offers to them that help them accomplish what they want to do and are relevant.

 

Number 1 is hard to outsource (difficult to outsource a personality) however if you get with a good company that understands intent in content then they can get this done. I do not know of one in the industry today so I am building one.

 

Number 2 is best outsourced, marketing with social intent requires some analysis and good planning things dealerships typically are not good at and not a part of their core competency.

 

At the end of the day all...

 

At a minimum you need help to set it up and on going management, at a maximum be sure the company you do this with can give you clear strategy on how they are going to communicate with your customers and how they are going to use intent & interest in the content they post in your social media properties. 

 

This is not a set-it and forget-it thing you will need to communicate with your social media partner regularly and help. 

 

Hop that helps, 

Larry Bruce @pcmguy 

Comment by Mikhail Melomed on June 14, 2011 at 9:21am
Outsource is the best solution when comes to Social Media marketing.
Comment by Rorie Hannigan on June 14, 2011 at 8:12am

I believe that social media should never be used as a communication tool without intergration. Social media should be used to represent the whole picture of the company,yes companies like BMW have up to 54 different Facebook pages, yet they still independently target different markets but all under one goal — ultimately social media allows for amplification of your wider marketing efforts.

 Ensuring that people in charge of your social media channels understand the wider picture of the company is critical . The kind of internal communication does require effort via management,marketing and organisational behaviours but it is something that has to be done and is beneficial to ensure objectives are being headed in the right direction.

Social media - yes it can be dealt with by an external agency however I feel it can really only be carried out by someone who is based interally within the company. Authenticity is of paramount importance when dealing with customers. I would not feel comfortable dealing with a third party online.

We must remember that ultimately skills that are outside your companies core competencies are going to be outsourced. If you are looking to economise your time make while increasing web traffic, brand awareness and lead generation think about outsourcing - however leave the interaction in house and leave tasks such as account set up, page design(for example FBML for Facebook page branding) and automated tasks like tweetadder to professionals.

Comment by Steven Gleadall on June 14, 2011 at 2:07am

Hi Charles

Social media is the cheapest form of advertising, promotion and can generate awareness, why bump up this price by hiring someone you don't need? If a company can't measure social media then they shouldn't be using it. A blog takes no time to do and can be updated everyday and can be on virtually anything. The returns are the numbers that role in and the statistics shown, all social media needs investing is time, it needs constant monitoring which is why i can see you feel the need to hire a professional. Someone leaving the company doesn't mean social media will fall, what happens if the accounts manager leaves? The accounts don't collapse someone takes over it. If we continue to be scared of things such as social media, social networking, viral videos etc we are going to fall behind. The fact is millions and millions of people are online. I'm not saying over night success comes from social media (like in the terms of Apple and Ben and Jerry's) but monitoring social media yourself you can a) see and monitor what content goes in b) use the social media sites that are relevant to you. If someone has a problem with something in your company it is faster if they can write on a page a suggestion that can be seen by the world instead of the bad press they will get and the clogging of calls they will get from upset customers.

Comment by Ralph Paglia on June 13, 2011 at 11:47pm

Charles - If a dealer invests in having the right amount of dedicated social media marketing staff on hand, then doing it in-house can be highly rewarding to the dealership.  We see examples of this all over America...

 

However, without the proper staffing commitment, the dealer is usually better served by outsourcing this labor-intensive marketing function to an outside supplier with the right resources to properly represent the dealership and a commitment to creating compelling and valuable content for syndicated posting across as many of the right UGC sites as makes sense for the nature of the content.

 

It gets back to either doing it RIGHT yourself, or hiring a professional to do it RIGHT for you!

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