How social media made a kinder, gentler automotive industry

Happy Car Dealer

People in the car business have been the focus of more jokes about dishonesty and greed than any other professionals outside of lawyers and politicians. Buyers instantly put up their best defenses when shopping for a car because of horror stories and bad experiences that have been spreading since the 1970s. Thing are different today. There are still those who try to get one by you, but social media has forced the majority of car dealers to embrace transparency in a digital age that no longer allows the actions of any business to go unnoticed.

In many ways, the automotive industry went from being a black hole of tricks and deceit to being an example of complete disclosure. Consumers can determine exactly what a dealership paid for a new vehicle and make an offer based upon this knowledge. No other industry has as much available information on costs of a product, nor do they allow the ability to negotiate from cost rather than retail.

Just because a cup of coffee at the convenience store cost them 22 cents (cup included) doesn’t mean that they’ll accept an offer of 34 cents. They won’t take a penny off of their 800% profit margin and would laugh at anyone who asked about it.

It isn’t just the vast information that’s available to consumers. More importantly, it’s the way that social media and subsets such as review sites have given business-altering power to individual consumers. The car business has always been reliant on word of mouth as a primary method of gaining business today and retaining loyal customers tomorrow. Social media takes word of mouth and gives it a megaphone.

The hottest topic amongst dealerships today is a combination of social media and reputation management. They have all been stung by a bad review from a customer who was insulted by their trade in value or denial of credit. Search engines take these negative reviews and make them prevalent in searches for the dealership’s name.

Some of the manufacturers have started stepping in. General Motors requires their dealers to retain the services of approved reputation management firms. Chrysler has been exploring the potential of helping dealers with their social media on the commercial side. They all know how important it is, but the dynamic in the relationships between OEMs and dealers has made it challenging to organize and coordinate a consolidated social media protocol.

Most dealers aren’t waiting around. They are hiring people or vendors to help them on social media. They’re training their staff on how to work with customers in ways that are completely different than the methods of the 80s and 90s. They’re respecting the power of the internet in general and social media in particular and have made drastic changes to the way they do business.

It’s the model that every business needs to explore. All too often, small- and medium-sized businesses are sticking their head in the sand when it comes to social media. They aren’t protecting their reputation and they aren’t monitoring what’s being said about them on any of the pertinent channels such as Facebook and Yelp.

They’re missing out on an opportunity and are becoming the victims of conversations about them rather than becoming part of the conversations themselves.

The business environment in the digital age requires a two-way dialogue rather than one-way broadcasting of messages. More consumers are learning about their power every day and are wielding it with unrelenting ire when they perceive that they’ve been treated unfairly. Sometimes, their simply wielding this power to get what they want, but this happens less than business owners want to admit. In the majority of instances when a bad review is posted or a negative statement is made about a business, it was deserved.

The automotive industry understands this, now. The days of the slick salesperson are behind us at many dealerships, replaced by a new generation who realizes that their customers likely know everything they can possibly know about the product. When that knowledge is accepted, it’s easy to realize that the only technique left is to embrace the transparency and improve on customer relationships.

Most never wanted it to ever get like this, but the survival instinct is strong in the automotive industry. The old way of doing business is dead. For the most part, they’ve made the adjustment. In the last three years, they’ve gone from reluctantly accepting that their world has changed to opportunistic acceptance that this is the way it is and they need to take full advantage of the new opportunities that it opens.

They’ve become the localized business leaders of the digital age. Will other industries follow?

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Salesman and Couple” image courtesy of Shutterstock.

Written by JD Rucker

+JD Rucker is Editor at Soshable, a Social Media Marketing Blog. He is a Christian, a husband, a father, and founder of both Judeo Christian Church and Dealer Authority. He drinks a lot of coffee, usually in the form of a 5-shot espresso over ice. Find him on Twitter, Facebook, and Pinterest.
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