Social Media ROI for Auto Dealers: Is There Bang for Your Buck?

Whether you’re a business owner who is highly skeptical of the latest buzzword trends or an early adopter diving headlong into whatever’s new, there’s probably a lot you can learn about using social media in advertising.

Car dealerships around the country fall into both categories, but almost universally have real trouble calculating return on investment for social-media effort, whether in terms of planning or execution.

So the first question is whether there is real ROI here, to which the answer is a resounding yes. Then, we get to the question of whether there’s a good way to calculate it, and again the answer is yes. More about that below.

Once you’ve put together a good traditional advertising strategy, it’s time to take a look at these tips for bringing social media into it as well as for calculating your ROI.

The Case for Social-Media Advertising

Traditional advertising has been fairly simple for auto dealerships in the past. Most Americans buy cars several times in their lives, so television and billboard advertising to large groups made sense. It still makes sense.

But if you want to target your customers with laser precision, it’s vital to bring social media into your wider strategy. There are two basic ways to do this.

The first is by creating content on social-media platforms, which will be shared by your potential customers. This requires some serious creativity and perseverance. But the payoffs are huge. By getting people to share content for you, you’ll be enjoying the best that word of mouth has to offer.

Secondly, take advantage of paid ads in social media, which are an extremely powerful tool. If you’d like to target 24- to 38-year-old men making over $60,000 a year within 50 miles (80 km) of Green Bay, WI, social media’s powerful data and targeting tools have you covered.

Combine this with the flexibility to try out simultaneous strategies and change them on the fly, and it should be clear why your dealership can’t afford to stay out of social media any longer. But how should you get started?

Begin by Choosing the Right Platforms

As with any type of advertising, a good strategy begins with understanding your customers’ buyer personas and then choosing the right platforms to target them. So ask:

If your dealership has a lot of sales to larger businesses, then it might make sense to build a B2B presence on LinkedIn. On the other hand, if you sell directly to a lot of people in their 20s, then places like Twitter, Facebook and Instagram probably will get you a better ROI.

Also, keep in mind that you won’t be chained to any strategy you choose, so feel free to try things out and improve your tactics as you go along.

Best Practices for Auto Dealerships

Once you’ve gotten a good grasp of your buyer personas and chosen the platforms and specific strategies you want to try out, it’s time to dive in.

You must engage. Social media offers an incredible opportunity to interact directly with customers. Services such as those Facebook offers can allow personalized promotions just for your Facebook fans. This can help create a sense of exclusivity and positive engagement. You can also use social media to receive and answer feedback, allowing you to both better understand your customers and better address any problems they may have.

Give value. No matter how you’re engaging with social media, the underlying philosophy is to create extra value by providing information people will appreciate. You can tell them about an app that reminds them to change their oil or you could write about Toyota’s latest vehicle lineup. Either way, you’re driving organic traffic to your site and showing Google you deserve to be at the top of relevant search results.

Finding the Bang for Your Buck

As a good business owner, you know how important it is to quantify, quantify, quantify. While it may seem at first that the world of social media is just a nebulous place where resources vanish toward unseen ends, once you learn how to translate the data, you’ll be amazed at how much there is.

Start by understanding that clicks, likes and shares have meaning and value. They mean that people are responding to your content or advertising. This quantifiable engagement will translate into higher Google search rankings for your site, in addition to driving both organic and paid traffic there.

See the direct results of your investment in social media by checking out the Google Webmaster Tools data that tells where visitors to your site are coming from and which sets of people are making purchases or appointments.

There’s more than enough data to precisely calculate ROI and help you appreciate the fact that higher traffic ultimately translates into more sales and more test drives. But keep in mind many social-media marketing strategies take months for their effects to be fully felt, so don’t rush to judgment.

How have you incorporated and quantified social-media advertising for your auto dealership? Let us know in the comment section below!

Eric Halsey keeps a close eye on automotive retailing trends for JW Surety Bonds.