Alex BHPH is less that 2% of Autotrader.com's business so I am not sure where you get your information from.

I've worked for both companies and they do enforce it when the dealer is caught. It's impossible to monitor all listings. Most are caught when dealers report their fellow dealers cheating. Customers are wise to this. The click percentages are significantly lower on "over priced" cars such as the ones dealers list for $99,999. Consumer behavior is to scroll down to the actual market price and start shopping. The click percentages are actually lower on the cheapest vehicles. 60% of all searches, customers enter a price range. Therefore, if you have a vehicle listed without a price it won't even show up 60% of the time. Also, if it is listed extremely high it also won't show up on 60% of the searches when the customer enters a price range.

The way the life style has changed, dealers need CARS.com and ATC more then Cars.com and ATC need dealers. When you go shopping for a vehicle do you go driving from state to state or move the mouse website to website? Which is easier?

This is why it is so important for these companies to enforce the policy. i know from buying 4 cars through cars.com they do a swell job.

There are 3 million vehicles listed on both ATC and Cars.com. It is policed and corrected when it is brought to their attention. Here's a novel idea...Dealers should start being honest with the consumer and we wouldn't be having this discussion.

Yea...ok...like cars.com is going to blacklist a dealer. They aren't google. They need the dealers probably more then the dealers need them.

Toby Albergotti - one thing I can gladly say I don't know much about is the buy-here pay-here game. There are a lot of them in my neck of the woods (because of all the military here), but I have not tried to understand that part of the business. Fortunately, Checkered Flag rarely ever competes against them - we're the opposite end of the spectrum. Your post is interesting and makes sense. If I had a hefty bank fee, I'd probably be getting "creative" in my pricing too.

At the end of the day it is up to the website that allows this kind of practice to police it. I wonder if Autotrader.com is paying attention? Buy-here Pay-here's are a huge part of their income, so I doubt they'll do anything about it. THANKS to Cars.com for heading in the right direction. At the end of the day - it is about the consumer - not the dealer.

I mentioned this to my Autotrader rep last week that I don't think it should be allowed by their site, while he agreed, it sounded like there wasn't much that could be done about it.

I think Vauto/Firstlook should lobby the classified listing sites, as this type of pricing drastically reduces the effectiveness their services provide.

This is a great point. I am not a dealer but, I run into this with many of our Dealer customers. The pricing of cars becomes a covert war or a “paradox of choice”. Both of these practices I urge customers not to participate in.
Buy Here Pay Here Dealers & Secondary Dealers fall into this “paradox of choice” category. Ultimately they aren't putting any price hoping to get a bite...then not focus on the cost but on the ability to get the person in a car. In order to comply with law they cannot price a car & add the finance company's fee to the price at the time of sale. So if they price a car say at $5,995 which may be market price & then a customer that has a 390 beacon score wants to purchase the car…they are in major dilemma. The only viable financing can be made with a company that charges the dealer a $2,000 fee & then charges the customer the interest. Legally the dealer cannot tell the customer the car is now $7,995 plus you will paying the finance company. So the dealer must now figure out how to post a price on the internet that a good credit customer finds competitive, but what do they do in the case of the credit challenged customer that saw the lower price? Hence the “paradox of choice”… should I stay in compliance and miss leads or should I play games and get burned. This adversely affects the consumers, because the information in the market place is not as pure as it should be. Because many cars are not priced & consumers typically skip over cars with no price….their choices may seem more limited than they really are in many cases.
Pricing covertly by hiding money in other areas creates exactly what you elude to… customer distrust & long term failure on honest perception from customers. As a heavy internet consumer myself… when any company plays these games with me… they lose my business forever. Camera stores on the internet are infamous for this game… you Google an expensive camera and presto you will see prices on the exact same brand new camera all over the board…usually the cheaper price means the camera is not made in the US, has No warranty in the US, & the customer support is dismal. Point blank I pay more money for the companies that don’t play games & that provide me with great information on the “ins & outs” of the merchandise.

Jeff

I know cars.com has sent an email to its dealers (at least in my area) that misleading prices with down money in the fine print are not allowed and will lead to the listings being removed and possibly the dealer being blacklisted. IMO that is the best way to handle this situation so as to maintain credibility with the consumer. I don't know what Autotrader is doing but I am told they have a policy similar to cars.com.

Dealers are still even listing inventory without prices. CALL FOR PRICE. Online shoppers do not want to take that extra step. Or the 300-words-per-second narrator on radio ads.

I also see dealers list their inventory for like 1,000,000 dollars so they have the highest price and come up first. It's silly but it works. We have ex Internet sales guys on staff that used to over price used cars all the time.

It's these dealerships that are somehow going to stay, while others go. Maybe customers like being duped?

I was wondering how you get people to follow you on twitter. I have created a twitter site, but I cant spend too much time creating content before I get enough followers. But then again if its true that twitter is going to start charging fees, then I wont even consider it anymore. It s not that difficult to set up your own little twitter page on your dealer website.

Very nice article, I think you touched on lots of great points.

What are the key areas you'd suggest they use? Which of course is my leading question into recommending the right resource (like Cuneo's team) for developing those KPI's, processes and goals as well as reporting and analytics to develop ongoing initiatives. Are there other vendors or consulting agencies you'd recommend?

I often find that dealers can be too focused on direct sales. Social is less a prospecting tool as it is a retention. Would you rather have a customer that knows and loves you, or have to spend the advertising to get a new one? Would you rather be an expert in the field, or a reactionary?

It's worthwhile to mention that dealers really don't need to be on MySpace anymore because it's changing from a social network to a media portal. Also, Facebook has made some updates to business profiles and pages to be more engaging.

I'm always curious how dealers remain socially savvy, ensure their efforts are maximizing their SEO potential, and considering the best practices and processes for encouraging their customers to submit positive reviews on the sites like Edmunds.com and DealerRater.com with everything else going on. Those will be increasingly important both as Gen-Y ages and as more maps/GPS begins to take reviews into account.

Social is definitely not something that turns around overnight. There are several components in my mind.

1) Social monitoring-- finding the advocates and haters and addressing them as appropriate.

2) Reputation management-- making sure your identity is positive: in search, reviews, and on the niche forums

3) Customer loyalty-- ensuring you keep top of mind with your current customers

Note that prospecting really isn't in there. You could certainly do service specials and hope to grab a few new customers but there are far more efficient ways of gaining new customers.

One possible use for Twitter (and facebook for that matter) is to offer savings and incentives exclusive to followers/fans/members. This way, you give these sites utility experienced only by being engaged with your dealership on these sites.

In my experience, it takes much effort and persistence to truly engage your dealership audience in social media, but I think that is because it is so new not only to dealers but also to customers as well.

Using twitter, myspace, facebook, etc... is not a magic bullet. On the internet, content is king. If you provide people with valuable information, they will patronize your business. A twitter account with tweets about an auto dealer's inventory will not accumulate many followers and will not result in customer loyalty. A twitter account that publishes honest tips about vehicle maintenance or how to purchase a car can help a company attract new customers.

I'm trying to figure out what is a good realistic goal for social media.... is it realistic to drive 500 uniques per month additional from social media? If so, how long should that goal take to achieve and how many man hours per week is probably needed?

Any insight would be apprciated.

Ryan, thank you for an insightful article, and of course, the honorable mention you shared referencing both Jeff and Myself, as well as our blogs (Jeff) and communities (Ralph). I have been blessed with getting some funding from a car company that was brave enough to support developing a strategy for dealers to get engaged with social media and social marketing. Sure, everyone has their favorites, with some people taking Twittering to a new level of stature for 140 characters per tweet... Still other dealers have done remarkable jobs with Facebook and YouTube... All worthy efforts. But the most long lasting, high impact approach I have helped progressive car dealers (with a little OEM funding for all that travel) and leveraged specially developed OEM social media assets to create a "network" for several dealers that is yielding various results, all of which the dealers seem quite excited and happy with. The idea is to have a hub and spoke strategy. For example, Twitter is a spoke, not a hub. We set up one, or more, Twitter accounts for certain dealer asset streams... For example, inventory deletions and additions. Each Tweet is a car that was sold, with description and selling price... Actual. Each new inbound new or used vehicle going into inventory is a tweet. Other Twitter accounts send Tweets out that describe the latest activity in the dealer's online community. The community is the hub for our system... Examples of community sites include:


And, we have about a dozen more prototype installations. Basically, we use database mining to generate the invitations after we flush out the sites with content, most of which is automatically updated daily via OEM provided asset distribution widgets, RSS feeds and Photo Galleries and slide shows. We also have developed some great inside tracks to OEM supplied Video content that is hosted within the Hub Community and then fed out to the various "name brand" social media UGC sites using as much automation as possible, but often times requiring some level of human interaction... I guess that's why they call it "social"!

If you are expecting to sell cars the "old fashion" way with social media, you will be sadly disappointed. When I say "old fashion", I'm talking Internet sales.

Whether you like it or not, your customers now discuss, review and share your brand with each other and it will continue to become more prevalant. Simply put, your brand is now in the hands of your customers, not you.

The goal with social media is to be part of the conversation. Having your dealership engaged in conversation that is open to the world provides alot of credibility and trust. Something that will ultimately result in more sales.

As Alex stated above, it's proactive and free PR. Those that take advantage of it today will see it pay dividends tomorrow.

Great article, I agree that determining the right process to partake in is very important to the increased success of the business.

Thanks, Ryan, for sharing your insights. As much as I hate the strategy vs. tactics debate (most people who invoke the debate couldn't tell you the difference between the two), it's very relevant for auto dealers.

Social media tools are easy enough to master. Knowing how to respond to a critic with a blog, whether it's okay to jump into a conversation about your brand, and whether it's okay to ask for someone's business on Twitter is the tough part.

The best dealers take the time to listen first, and to have a well thought out plan for engaging with customers, critics and enthusiasts.

That is sage input Alex and a good retort that addresses Jake's question above. Not to say you won't generate leads from these tools, quite the contrary you will generate leads and they will be higher in quality as you hone your process. But making leads your ultimate goal bypasses the spirit of the game. Thank you Alex.

Nice article Ryan. You have to look at the social medias as Public Relations on speed. PR used to take a really long time and was extremely expensive. And PR for car dealers was typically a defensive tactic most of the time.

Old model: customer goes on news broadcast saying nasty things about you. Hire Public Relations agency. Through PR Agency press release are made to the local newspaper and news stations. Letters are sent out, etc. etc.

Cost: Money, Brains, Luck, and Time

New model: online media is free so we're proactive. Speaking to our customers before they're ever thinking about us. If someone is upset, you might catch it before it ever escalates. In the meantime you're learning more about your customers and they're enjoying talking to you because you're not trying to sell them something.

Costs: Brains and Time

Has anyone received a significant amount of qualified leads from social networking sites?

Just curious if I should dive into this...

Jake

Yes I am curious to see where Twitter goes and how quickly. I have been using it since the early days saw a lot of potential but that potential faded quickly for me when I realized that everyone has his own idea about its utility.

I started using it more as a time line for my members but then one day Twitter lost 6 months worth of my tweets. That's when I realized I couldn't count on it as a truly viable business tool and set up my own time line on - www.autoconversion.net/discussions. Now I use Twitter for communicating directly with individuals where there is no risk of potentially lost tweets down the road.

At this point, Twitter is only as useful for me as it is for the people I might be tweeting with. And if this keeps up, the word "tweet" will end up in the dictionary before too long.