Everywhere I go, people ask me about changes in the automotive industry. Increased competition, shrinking margins, alternative fuel technologies, in-vehicle infotainment and new business models have all changed the industry dramatically over the last few years. But in every market I visit, one thing remains the same. From manufacturers to dealers, everyone echoes this sentiment: the car business is a people business.
It is a relationship business and a word-of-mouth business. Building strong connections with customers has always been a cornerstone for success in the industry. Most people only purchase a new vehicle every three or four years, so automotive marketers work hard to develop effective loyalty strategies that retain their existing owners and keep their businesses growing. Because loyal owners are also some of the best salespeople. Their recommendations and positive word of mouth can help attract new customers.
A successful loyalty strategy begins with a brand’s connection to its customers. Facebook Pages are an invaluable way to connect with people. When owners become fans of your brand, they allow you to publish stories to them. Each of these stories can be the beginning of a conversation and, over time, a relationship. Ongoing, regular engagement not only impacts customer loyalty, but also becomes the basis of meaningful stories they can share with friends.
To pinpoint the real value of these of connections between automotive brands and their owners on Facebook, we conducted a loyalty study* earlier this year and identified several insights:
55 percent of U.S. automotive Page fans own a vehicle manufactured by that brand
Loyalty among those owners who are Page fans is 16 percentage points higher than owners who haven’t fanned (62 percent vs. 46 percent)
The results of the study show that many of the connections auto manufacturers have are with their most loyal owners. We also asked fans of U.S. automotive Pages when they plan to purchase a new vehicle, and 26 percent said they plan to do so in the next year. That underscores why quality connections with your actual owners are far more valuable than artificially inflated fan bases. Their loyalty can translate into real dollars.
The study also revealed the influence owners who are fans can have on their friends:
82 percent of owners who are fans of automotive Pages are very likely to recommend their vehicle to a friend vs. 69 percent of owners who are not fans
On average, owners who are fans of their manufacturer’s U.S. Page are connected to 433 friends which is more than three times the friends of the typical Facebook user
Owners who are fans are stronger advocates than those who aren’t. And they’re able to share their recommendations with three times more people than the average user. That’s a powerful channel for attracting potential customers.
The automotive opportunity
Despite this very promising data, the fan bases of 10 leading automotive brands in the United States represent less than 5 percent of their owners on Facebook. This is a significant opportunity for the industry. Here are some tactics that can help automotive brands connect with owners:
Leverage customer databases: Email your owners with links to your Pages and a compelling rationale for becoming fans, including owner updates, service offers and new product information.
Run cost-per-click (CPC) Facebook advertising campaigns with creative targeted specifically to owners.
Sponsor Page Like stories to friends of new fans. These stories are an effective way to leverage the power of owner advocacy.
Use social technology such as the Like Box Social Plugin on your website to encourage customers to become fans on Facebook.
Today’s automotive industry is more competitive; however it’s still a people business. Connecting with loyal customers and their friends can create a valuable advantage for your brand. Integrating Facebook into your existing marketing channels and leveraging Facebook Pages, ads and sponsored stories will help you capture this advantage and let people drive your marketing.
Doug Frisbie is Head of Automotive, Global Vertical Marketing, at Facebook.
*Note on study methodology: The study was conducted with 15,938 Facebook users who responded to poll questions delivered in two phases of the study between 12/16/11 and 3/13/12. The study included 54 brand and model Pages from 10 leading mass-market automotive brands selected primarily based on historical sales and market share. Phase 1 measured owner and Page fan loyalty, and phase 2 measured owner and Page fan likelihood to recommend. Questions included:
Which of the following brands is your primary vehicle?
When you purchase your next vehicle, will you purchase the same brand you currently own?
How likely are you to recommend your primary vehicle’s brand to friends?
When do you plan to purchase your next vehicle?