When it comes to social media, the first question most dealers ask is what their return on investment will be. Unfortunately, compared to traditional media, ROI for Internet marketing can be difficult to measure and sometimes impossible to achieve. Still, many dealers continue to jump onboard Facebook, Twitter, YouTube and other social media platforms in hopes that they can boost their dealerships’ bottom lines.

One success story is Midlands Honda in Columbia, S.C., which was named one of F&I and Showroom’s 2010 F&I Pacesetters. The dealership’s foray into social media paid off. Not only did the new technology improve Midlands’ bottom line, it generated ROI and created loyal customers.

“Historically, people have only seen us as a place of business,” says Randy Threatt, Midland’s general manager. “Now, they are seeing us as a vital member of the community, as a friend.”

The dealership followed a four-step process and established an attainable goal, which was to create a recognizable brand while improving Web and floor traffic. In the process, Midlands Honda created an equally satisfying experience for its customers, whether they were shopping online or in the showroom. Let’s take a closer look at the path the dealership took to achieve social media success.

1. Create a Plan Outline

A social media strategy cannot be a cookie-cutter process. It needs to be customized to fit a dealership’s market, inventory and services in order to be effective and generate revenue. Midlands Honda’s social media strategy was based on the following four basic steps, which were modified to fit the dealership’s capacity and objectives: 

Investigate Your Market: Look at your market like an outsider. Examine the demographics, find things that interest people, and take good notes.

Create Realistic Objectives: Set your goals by using the SMART method: specific, measurable, attainable, realistic and timely. Like everything, you want to be able to inspect what you can expect.

Choose Community-Building Activities: Think about how you are going to build your online and offline community. What kind of activities will you use to attract people to your dealership? Will you include social media in offline advertising?

Select Appropriate Platforms: Facebook is the big animal and the best place to form relationships. Twitter, YouTube and Digg are the best places to pitch vehicles, products and services. Local Web forums also are good places to reach customers.

Keep in mind as you’re developing your social media strategy that dealerships are local businesses and need to have a local focus. When you build your community, build it with local people who will, hopefully, one day become your customers.


2. Know Your Market, Build Your Community     

With a plan outline in place, Midlands Honda’s next step was to research the Columbia market. They soon found that the city and its surrounding areas are diversely populated.

Columbia is the home of the University of South Carolina, so the city has a large college-age population. The city also is rated among the best places in the country to retire, so it boasts a large senior population. Columbia’s retail market also is influenced by a strong military presence thanks to nearby Fort Jackson, home of the U.S. Army’s largest boot camp. Each demographic required a different approach from the dealership.

Midlands’ next step was to establish its goals. The dealership wanted to stand out from its competitors with a strong reputation for good customer service. In addition, the team wanted to create more buzz about the Midlands name and increase traffic to its Website and showroom. The dealership wasn’t focused just on gaining “ups.” Threatt and his team first wanted customers to feel comfortable enough to visit the dealership. 

After establishing its goals, Midlands Honda developed and used several ideas and activities to build its position in the Columbia community:

Held daily contests to increase engagement and community growth. Remember, engagement is more important than sheer community size. If you’re out of touch with your community, your neighbors are not hearing your message.

Held giveaways. Prizes included football tickets, framed pictures of the local football stadium, spa packages and barbecue grills.

Sponsored local sports teams, beauty pageant participants and local pet adoption facilities.

Participated in Cell Phones for Soldiers (www.cellphonesforsoldiers.com), a nonprofit that sends donated phones to soldiers, sailors and Marines serving overseas.

Established a contest called “Columbia Pet Idol,” asking people in the community to submit pictures of their pets. It was a hit, and it led to the creation of a “Pet of the Day” feature on Midlands’ Facebook page.

Offered free car washes for anyone who “checked in” on Foursquare.com at the dealership.

Blogged about Midlands, its employees and the Honda brand.

Posted pictures and videos of sold customers — including service customers — and prize winners.

Finally, Midlands Honda selected the social media platforms it wanted to use. The dealership dove right in, establishing a presence on Facebook, Twitter, YouTube and LinkedIn, as well as local sites like the highly popular TheColumbiaCool.com.

The dealership also established a blog, HondaColumbiaSC.com, and a microsite, HondaSC.com, which was dedicated to the Honda brand. Whenever the dealership posted a blog, it would be distributed to more than 100 social networking sites, creating “social search engine optimization” dominance in the local market.


3. Midlands’ Facebook Formula

Midlands Honda’s social media strategy covered a lot of ground, but Facebook turned out to be the most effective platform. The social networking site currently has more than 500 million members, which would make it the third-largest country in the world. Within 50 miles of Columbia, S.C., there are more than 420,000 Facebook accounts.

Facebook offers two types of pages, a profile page and a fan page. Ideally, a dealership would want to have both, but Facebook no longer allows businesses to create profile pages using company names. However, Midlands Honda had already established profile and fan pages before the current policy became effective.

As of July 1, the dealership’s profile page had 149 friends and its fan page had 94 “Likes.” Midlands Honda wanted to build from that point and used the 20-20-60 rules of engagement strategy. Those numbers represent the ideal mix of content that should appear on social platforms.

20 percent: Talk about the store and things applying to your brand.

20 percent: Share content pertinent to your community, such as news and accolades.

60 percent: Get involved in conversations with people in your community. To do that, enter the name of your town in the search bar on Facebook’s home page and get involved in the conversations about local topics. It’s important that you add to the conversations; don’t just promote your dealership. Stick to subjects such as kids, pets and sports, which create positive emotional responses. Avoid polarizing subjects like religion and politics.

After using the 20-20-60 formula, Midlands Honda made more friends and had more “Likes” on its Facebook pages. As of press time, the dealership’s profile page had 1,387 friends and its fan page had 869 “Likes.” Amazingly, there are only 132 people in common between the two pages. Additionally, Midlands Honda was influencing more than 2,100 people, but more importantly, 84 percent of those people live near the dealership.

Midlands Honda was able to identify two trends from its profile and fan pages: First, the dealership had a significantly higher percentage of women on the profile page and a significantly higher percentage of men on the fan page. Second, the profile page had more chatter and talk, and women were more likely to recommend the page to their friends. The fan page offered more “car talk” — information on current models, upcoming improvements and technology.

In addition to successfully building a fan base with these pages, Midlands Honda also had positive results from a Facebook ad campaign, which encouraged customers to visit the dealership’s DealerRater.com page and read other customer reviews. The campaign reached a broad demographic of men and women, ages 18 and up, who are living within 50 miles of Columbia. The campaign averaged 3.5 million impressions per month, had 728 actions per month and cost $419 per month.


4. Managing Customer Reviews

After Midlands Honda implemented the four-step social media strategy, it experienced significant improvements in its customer ratings and reviews. Here’s a comparison of Midlands Honda’s ratings and reviews on Google and DealerRater.com between July and November of this year:

Google reviews

July: 17 reviews at 4 stars.

November: 435 reviews at 4.5 stars. (Note: When the program started, Midlands Honda did not have DealerRater.com push their reviews to Google. Doing so greatly increased the number on Google.)

DealerRater.com reviews

July: 263 reviews at 4.6 out of 5.0.

November: 368 reviews at 4.7 / 5.0.

In addition to these two ratings services, Midlands Honda also used a company called Relyable.com, which keeps a scorecard for each salesperson on its Website.

While Midlands Honda made notable improvements in its ratings and reviews, the management team never tried to present it as a perfect dealership. Instead, it chose to be completely transparent with its customers by sharing both positive and negative reviews. Transparency is a huge part of social media. Customers realize that, like people, every business has its flaws. They are inevitably impressed when a dealership makes an effort to be honest and improve its operations.

The key here is to get customers to read and write positive reviews. According to Relationship-Economy.com, one positive recommendation is equivalent to 200 traditional media impressions. What does this mean? Every time someone says something positive about your dealership to another person, it has the same effect as that person driving past your billboard 200 times, hearing your radio commercial 200 times or seeing your TV ad 200 times.

Online reputation management can be tedious but well worth the effort. Customers who have a negative experience will be more motivated to write a review, so you need to combat that by asking your happy customers to provide reviews. Ask these customers at the time of delivery and then follow up with a call and an e-mail. In your e-mail, include a link to the site where you want their reviews to appear.

Your happy customers will give you reviews, but it will take a little extra effort on your part to get them to do so. And while ROI is harder to calculate from social media than from traditional media, there’s no doubt that positive customer reviews have been a boost for Midlands Honda. Customers who have visited the dealership’s various social media platforms have said things like “best service department in the southeast” or “Midlands Honda is the best.”

To Threatt, each entry is a ringing endorsement of the dealership’s investment in social media.

“The positive comments and feedback we get every day are priceless,” he says. “People really enjoy communicating with us.”