Dealer Outlook

Trade Only Dealer Outlook Blog

Social media: Is it hot or not?

We’ve been hearing it a lot these days — using social media is cutting edge marketing! At the recent MRAA Dealer Conference, it was a key part of how-to seminars on effectively using the Web. It’s being hyped as a great marketing tool. But, if you’re rushing to master its use and incorporate it into your operation, you may want to slow down.

Recent surveys reveal good news and not-so-good news. The good news is that online retailers were the leaders of the holiday sales gains. Not-so-good, however, was that their investment and use of the highly-touted social media had surprisingly little impact on their cash registers.

For example, as recently reported in the St. Petersburg Times, a survey of 10,000 online shoppers by Foresee Results, an online customer satisfaction firm in Ann Arbor, Mich., concluded fewer than 5 percent of holiday sales were “primarily” influenced by social media like Facebook, Twitter or shoppers delivered to a shopping site by smart phones. Another survey by IBM’s web analytics arm, Coremetrics, attributed even less – just 1 percent of holiday sales to social media.

So is it hot or not? Well, it’s a hot topic for marketers, for sure. Social media account for nearly 23 percent of time spent online in the U.S., according to AC Nielsen. That represents a huge audience. In April 2010, Harris Interactive conducted a survey for the Online Publishers Association and found social media sites were the most talked-about on the web, ahead of portals and top media sites that are OPA members. That said, however, the talk isn’t making social site visitors loyal. In fact, internet users expressed the least loyalty for social media properties.

Moreover, the OPA’s findings are in line with an annual customer satisfaction report from ForeSee Results that found Facebook among the most disliked sites on the web, attributable to its many disagreements with its own users and some privacy problems. Further, according to the OPA, negative feelings about social sites may also transfer to the brands that advertise there. Only 8 perccent of internet users felt social media site advertisers were reputable.

These current discussions and conflicting assessments of social media’s value to retailers remind me of the time when we were all told that if we just had a website on the then skyrocketing Internet, it would deliver lots of orders while we just watched the screen! It didn’t happen, of course. All that hype proved very premature as online shopping wasn’t to really develop until the later build out- phase of the Internet got underway.

We may well be in a similar time with social media. It has been skyrocketing – Facebook now draws more web visits than Google, for example. Still, this was dwarfed in the holiday sales picture by such “old” tactics as promotional emails (19 percent) and search engine optimization (9 percent.)

So, what social media’s real value is to us as retailers of durable hard goods is a foggy area at best. And, as every seasoned boater knows, then, when in the fog you play it safe and run slow!

Comments

7 comments on “Social media: Is it hot or not?

  1. Diane M. Byrne

    Some good points, but just like everything else these days, there are multiple reasons to use social media. A major one for lots of companies, mine included, is brand awareness. It definitely works in that regard for me: Twitter users, for example, spend an average of 5 minutes reading my blog content, which is more than double the average.

    I think at this point, it’s best to consider social media as just one component of an overall campaign addressing brand awareness, advertising, customer service, and sales. In fact, it’s actually a great tool for customer service: instant response to a customer’s questions or problems. Continental Airlines and Southwest Airlines are particularly good at it, with certain employees dedicated to updating and monitoring Twitter and Facebook. Doesn’t matter that they’re airlines, not yacht companies… their approaches are easily to mimic.

  2. Fishsticks

    Social Media is more about branding and opening up new ways of communicating with your consumer base. I don’t see any real scenarios where it will directly impact your profit margins unless you are able to purchase things via social media sites. Don’t expect to get rich off of it, it will not replace standard methods of generating income. However, it will open up previously non-existent lines of communication that will allow you to put your company and it’s products in front of millions of users in a real-time environment.

  3. Jim Crutchfield

    It appears to me that Internet social networks have users who have lots of time to devote to posting on Twitter, Facebook and other mediums like texting on cell phones. While the potential of social networking sites are compelling; my take is that the abundance of sites available to viewers takes away from affectively conducting business… My social networking activities remain within tasks to communicate to others within the recreational community; therefore, I limit my social comments to terse remarks that someone may find helpful while conducting business… Idle chatter by any medium is a waste of time and energy…

  4. dave

    As one who has been bombarded by various causes, charities, political positions, social causes, agendas and other “noise” from several boat dealers…one must be careful to keep to the message and on point and on target.

    I did not “friend” the dealers to hear about their favorite charity, family pictures, or the latest escam/phish or to be pointed to them through a shortened URL or one that is a known scam site…I simply want to know about that dealer’s boats, discounts, sales, shows and the like.

    Sadly when I wrote the owner of one prominent dealership, she responded “that she could do what she wanted…it was her company”.

    And she can….but as a customer, I certainly don’t have to put up with it. Glad there is a button to sever the link…

    YMMV

  5. Christopher Kourtakis

    Great points and great comments!

    However, social media, if used correctly can generate sales. Look at sites like GAP that offer discounts to those who follow them. GAP then tracks the use of the coupons to see if they are working or not.

    Furthermore, more and more retail companies are using Four Square to lure potential customers into their stores with instant specials and give a ways to their mayors.

    What question that cannot be answered is whether or not the consumer would have shopped there without the coupon. What can be measured is how many coupons are being used and the brand loyalty that the sites have.

    Social Media is about conversation and engaging the customer. No, you are not going to sell a boat over Facebook, but the potential buyer is going to read about who loves their current boat and how they are using it, which may sway their decision into a certain brand or a specific dealership.

    I personally worked with and have seen service departments increase revenue from specific promotions placed on Facebook, Twitter and Four Square. We have offered a specific social media coupon for oil changes, bottom cleanings, product specials, then measured the increase over last year at the same time to see if it has helped. This is just one example of measuring the ROI. Another way is to survey the customer.

    It is also a great way to get rid of old product sitting on the parts and accessories shelves. Do you have an extra couple cases of wax or cleaner. Offer a special price on-line and see what kind of return you get. When the consumer comes in, ask them if they purchased just because of the ad or because they needed the products, etc.

    Social media is not a specific channel and should not be the only piece of your marketing plan.

    I always tell people that your marketing plan is like a jig saw puzzle, Boat shows, demo days, internet, social media and print are all examples of pieces of the puzzle. Without each of them you cannot complete the puzzle and you will have a hole in the middle where that specific piece belongs.

    Remember, social media is about conversation and letting people see what others are saying about your dealership and your product lineup. Let’s keep talking so that they like that they hear and then visit the dealership and then purchase products, new boats, etc. That is the real indicator that your social media plan is working.

    Again, great article and great comments!

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments are moderated and generally will be posted if they are on-topic and not abusive. For more information, please see our Comments Policy.