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CARS a Lesson in Social Media

August 2009, F&I and Showroom - Cover Story

by Gregory Arroyo - Also by this author

It’s anyone’s guess what will happen first, funds running out or the Nov. 1 expiration date for the Car Allowance Rebate System (CARS), or what is known as Cash for Clunkers. Whatever the case, the federal program has not only breathed new life into the industry’s battered entrepreneurial spirit, but it’s also uncovered what might be the working formula between traditional and new-age marketing.

Franchised dealers began receiving letters from manufacturers in the days leading up to the National Highway Traffic Safety Administration (NHTSA)’s anticipated July 24 release of the program’s finalized procedures, which, for dealers like Stoneham Ford, couldn’t come soon enough.

Stoneham Ford’s story of how it’s taking advantage of what amounts to a $1 billion, government-subsidized, advertising campaign is a case study on the future of marketing. It’s also a tale of just how quickly the online world moves and how quickly it can morph into something completely unexpected.

“We started working on this in late March, early April, and our belief was that social media was going to play an important role,” said Michael Warwick, Internet director for the Stoneham, Massachusetts-based dealership, which hopes to sustain a 25 to 28 percent sales increase over the life of the program. “Listen, I’m a big online guy who thinks print advertising is dead. However, this is different. People go to newspapers to get information, which is why I think dealers should consider taking out newspaper ads to go along with their online strategies.”

Social Media in the Spotlight

Not more than three months after Congress proposed the Cash for Clunkers legislation in January, Warwick began strategizing with the dealership’s New Jersey-based marketing firm, Pasch Consulting Group (PCG). Warwick wanted his store to get top billing whenever potential customers ran a Google search on “Cash for Clunkers” in Massachusetts. What happened next is a lesson in the power of social networking.

“The first thing we did was have marketing firm add us to their microsite targeting the keyword, ‘Cash for Clunkers’,” said Warwick. “Once the Cash for Clunkers microsite was up, we were getting 60,000 to 70,000 page views a day, and it became the No. 1 search result on Google.”

The success of the microsite, however, ruffled the feathers of some regulators and bloggers, who complained that the site was launched before NHTSA’s information site went live. At issue was the tagline PCG developed for its client’s Websites, which read, “Cash for Clunkers Participating Dealer.” Warwick said his firm voluntarily changed the tagline to “We Can Help” since the official NHTSA registration process had not yet begun.

With the site in place, Warwick then moved to create an eight-person Cash for Clunkers team, a group that included three business development center (BDC) reps, four salespeople, and the main decision maker in the F&I department.

While most of the team worked on figuring out what vehicles qualified, and setting up relationships with local wrecking yards, the F&I manager and his department began working with banks to set up guidelines for people who qualify. The big question was whether CARS credits would be viewed as down payments, or calculated as customer income. While questions like those had many dealers wondering if participation in the program was worth the hassle, Warwick preferred to concentrate on what he did know and let his online marketing strategy do the rest.

“Mike’s the new breed of forward-looking car dealers because his dealership is embracing technology, automotive SEO, blogging and all of those things,” said Brian Pasch, president of PCG.

Pasch also represents a new breed of marketers, a group that’s preaching the power of what he calls automotive search engine optimization (SEO). He views the chatter regarding the Website’s original logo as evidence of the power of SEO. “Some critics didn’t like the fact that we had created a dealer marketing message before dealers could officially register for the program,” said Pasch. “We just looked at it as a marketing opportunity for dealers to communicate that they planned to be involved in the Cash for Clunkers rebate program.”

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