The phrase “Web 2.0” was originally coined to describe the evolving nature of the Internet as a communications medium.  People initially explored web pages filled with static sheets of information whereas Web 2.0 emphasized a fundamentally new dynamic of social interaction led by large social networking platforms.  Today the Internet has become the undisputed destination of choice for people who want, on some level or another, to connect with other people.  The statistical evidence of this interaction juggernaut is overwhelming.  Facebook users passed the 350 million mark last year. Twitter will have over 30 million users this year.  Some estimates have You Tube streaming over 7 billion videos per month. The list goes on.

The implication for people who are in the business of acquiring customers is no less profound.  The concept of Social Media Marketing is now seemingly everywhere you look, and with it the promise that every business now has the capacity to more effectively capture more customers at a lower cost than ever before.  As with most new and widespread changes to the status quo, there also comes with it the explicit warning that to ignore the newest version of the web, or more specifically the newest sales and marketing tools provided by social media marketing, is to either do or die.

For those of us who work in the retail automotive industry this is a familiar warning.  Whether it be J.D. Powers or Maritz Research or your next door neighbor, somebody for many years has been telling us to change our ways or else.  Or else you’ll be run out of business by AutoNation, or the Used Car Superstores or the dot com revolution or someone or something else that will be more effective at selling and servicing cars than we were.  While the collapse of the credit markets in 2008 did a pretty good job of closing a lot of dealerships, the replacement theory has proven to be patently false.  Still, to many dealerships social media marketing and Web 2.0 is something that can’t be ignored.  It may not be a case of do or die but it definitely looks to many that you either get in the game or risk losing the potential for an incredibly unique competitive advantage.

Problem is, if you read the fine print this social media stuff contains a lot of new concepts that come attached to it and they’re supposed to be essential to its success.  You hear terms like “authenticity” and “transparency” and “engagement” and perhaps wonder how these match up with automotive retailing maxims like “buyers are liars”,  “be backs don’t come back” and the closely held notion that “it’s not the deal the customer gets, it’s the deal they think they get”.

My own theory is that just as the Internet has evolved as a communications medium, so to has the time arrived for dealerships to evolve in how they acquire and retain customers.  I would suggest that we are now in the era of Dealer 2.0 and we need to make the critical distinction that this new era is very much an evolutionary process as opposed to a revolutionary change.  In a revolution the old is replaced by the new.  Those who previously had power are now powerless.  But in the evolving landscape of retail automotive there will be dealerships that are simply at different stages of adapting to a sales and marketing environment in which a large portion of the audience has connected with the interactive online world.  It’s a place where people have conversations and dialogue with each other and among other things those conversations are about what they bought and how they were sold and serviced by the seller.  There’s been a shift in power but dealers are far from powerless.

The key to evolutionary success in the world of Dealer 2.0 would seem to be held by the dealers themselves.  If as a dealer you recognize social media as a fundamental change in how people connect with other people, then you are probably already in the process of changing the core methodologies that you use to sell to and service those people.  I’ve often seen social media marketing represented to dealers as the latest “must have” in a long line of specialized tools, technologies and acronyms that will substitute for the core infrastructure required for sales success.

If social media is a part of a broader sales and marketing plan, there is any number of ways to leverage these new tools to build dealership brand recognition and ultimately sales and market share.  If however, you are insistent on using Dealer 1.0 sales methodologies in a Web 2.0 world, I’m going to go out on a limb and say that social media marketing will not be any more productive for you than those worthless Internet leads your manufacturer provides, or that worthless CRM technology you bought at NADA three years ago.  They were perhaps worth less because they required more to realize their value than just the money spent on them.

Ultimately social media marketing represents web based tools that have the capacity to connect you and your dealership with potential customers.  But it won’t engage them, it won’t convert them and it won’t sell any more vehicles than you’re selling today… you need to do that.  Dealer 2.0 is about the evolution of the retail dealership and its adaptation to a Web 2.0 world.  It will require us to review fundamental components of our sales infrastructure like how we hire, how we manage our sales processes, how we train and develop our staff and most importantly how we choose to represent value to our prospective customers.

What evolutionary changes are you seeing in your dealership?