Social media can be used as a useful reputation management tool and to help boost customer satisfaction.
According to Erik Qualman, the American author of Socialnomics, a book exploring how social media transforms the way we live and do business, the return on investment of social media is that “your business will still exist in five years”.
That might be a rather sensationalist statement, but there can be no doubt of the rapid popularity of websites like Facebook with 750 million users worldwide and 29.8m in the UK.
Facebook accounted for 12.4% of UK internet visits in January 2011 while 37% of adults claim to use social networking each week.
Perhaps more importantly, 46% of users follow one or more brands through social networks, with 23% saying that they’d like to receive brand information through Facebook.
So, with almost half of the UK’s population on Facebook, can dealers afford to overlook social media as a way of interacting with consumers?
Tim Smith, GForces managing director, told AM: “With people increasingly looking to single sources, such as social networks, for opinion and information, car dealers are well advised to ensure that they maximise their presence.
"At present, while 83% of the nation’s top 200 car dealers now have a Facebook page, very few have been able to translate this social media activity into increased revenues or customer loyalty.
“As such, it is imperative that dealers can offer something more through their social media presence, otherwise the cost of maintaining a page could end up outweighing the benefits.”
Top 30 AM100 dealer Ridgeway Group has used social media across its business for more than three years and has discovered a way to use the medium positively.
When the group first started using it, social media was used as just a sales channel, but it quickly became apparent this wasn’t the way to go.
Philip Deacon, Ridgeway Group communications manager, told AM: “We wanted to educate ourselves about it and understand how we could use it.
"We used the first three months to sit back and analyse what was working and what wasn’t.
“We then developed a strategy which was focused on creating content that makes people come to us.
"Using it as a sales channel provided no interaction with customers.”
As part of the “no sales pressure” attitude, all mentions of monthly payment finance deals and any sales pitches or adverts were removed.
Deacon had to present to the board to justify the time and effort before incorporating social media into the group’s digital strategy.
The dealer group opened brand specific Twitter and Facebook accounts in May 2009 with separate feeds of all its brands including Mercedes-Benz, Volkswagen, Skoda, Smart, used cars, bodyshop and its affinity programme.
On Twitter, Ridgeway’s group feed @RidgewayGroup is then used to repost or “retweet” content from other parts of the business.
Deacon describes the marketing team at Ridgeway as the group’s “on-site roving reporters” that will highlight anything interesting going on throughout the business or with the brands it represents.
Deacon said: “All the information we post is relevant and up-to-date.
"We create interesting links to news, blogs, new car launches, competitions, video content and we can communicate with customers.”
Ridgeway has a central marketing team of three people that takes responsibility for handling social media activity as part of its job role.
Ridgeway uses a piece of American software to help track keywords across its social media activity.
Social media can help dealers to view conversations that are taking place about their business and then get involved in a non-intrusive and helpful way.
Deacon gave an example: “We saw that there was a woman on Twitter wanting to know about the new special edition Smart Fortwo and it just so happened that we had one delivered that day at one of our dealerships.
“I saw the tweet and asked someone at the dealership to take a picture and email it to me.
"The picture was added to Ridgeway’s Smart Twitter feed and the customer got in touch, arranged a test drive and placed an order.”