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David Johnson

David Johnson Social Media Aficionado

Exclusive Blog Posts

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The Most Powerful Part of Social Media That You're NOT Using

Social media is good for a lot of things: building relationships, finding and spreading news, marketing, a good laugh, keeping up with your friends and family and a host of other things, but there is another aspect of social media that most businesses aren't using. In fact I could argue and you could argue that it's the most powerful part of social media that most businesses aren't using. It's this missing piece that could be the difference your business has been looking for, the competitive edge that could push you over the top and allow you to grab market share.

Since the onset of marketing, marketers have looked at it as a way to get their product or service seen or heard but unfortunately have completely ignored the real reason why marketing works or doesn't work... it's people! Granted, marketing is a way to build awareness but it's the dialogue that's happening between people that will dictate whether or not your marketing efforts work or don't work. In other words, the real marketing gold here is mined from the people of your community, are you listening to what they are saying?

In a post I came across, written by Ross Mayfield, he shares with us a model for understanding how enterprises are assimilating the knowledge learned from listening to the conversations surrounding their business.

  • 1% of customer conversations are assimilated as organizational knowledge
  • 9% of customer conversations touch the organization, but no learning occurs
  • 90% of customer conversations never touch the organization

Listening To The Conversation

It pays to listen and instead of rehashing how you can set up a free social listening station, I go into detail about it in a recent post I wrote on personal branding. If you take a look at the figures above you will notice that 90% of what's being said about your business is never even heard. It's not that your customers don't have a voice, because they do, it's called social networking. The reason 90% of what your target market is saying never gets heard is because you're not listening, and the consequence is that you are ignoring a way to make your business exceptional.

As an example: an emphasis, over creating brand ambassadors, is being put on bringing in new customers to dealerships. On the outside that doesn't sound so bad, and it's not really but if you're starting on the bottom every month it's very difficult, if not impossible, to build an empire. More about that in a bit but first let's take a look at the other 10%.

Almost as alarming as 90% of what people are saying about a particular business is never heard, 9% of it is heard but no organizational learning is happening. Put another way, you hear about the experiences your customers are having at your business (good or bad) but you are doing nothing about it. You aren't assimilating the potential gold mine that your customers are sharing with you into your organizations knowledge base and are missing a huge opportunity to be exceptional. As I've said before it's the difference between what's expected and the actual service received that will dictate whether or not they will talk about you, and they are talking, it's up to you though if you want to exceed those expectations and gain positive word of mouth or fail to meet them and gain negative word of mouth.

Knowledge Assimilation

Be Part of The 1%: If you hear somebody say something good about one of your employees you should reward them, share it with the entire organization and depending on the impact level make sure that other employees duplicate it with the intention of multiplying the effect of the first. With the reverse, if you hear about a customer complaining about it taking too long to get an oil change or to get through F&I at your dealership, then take a look at your internal processes and make a change.

A lot of people take it personally when somebody complains about a product or service, but if you look at it as a cry for help and as a way to have a positive impact on your future business then you will begin to approach what others are saying in a different light. With the onset of social networks and the desire, by the consumer, to have a voice about your business, good or bad, then all you have to do is start thinking of the customer as part of your business, not just marketing but operations as well.

The best part of Social Media – that you can now begin to strategically employ – is that it is a marketing tool that also serves as a collaboration tool as well as a marketing tool. When you implement Social Marketing in this collaborative fashion, then you go a long way to building a true social business by harnessing the true voice of the customer.

Building An Empire By Building Brand Ambassadors

Earlier I said that an emphases was being put on brining in new customers instead of creating brand ambassadors, before you lambaste me though let me explain what I mean by that. Auto dealerships are notorious for being short sighted, they think in terms of today and because of that they tend not to think in terms of compounding customers.

Much like compounding interest, which Wikipedia defines as "when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest", compounding customers works much the same way.

Dealership A

Dealership A spends a ton of money on advertising, they have catchy jingles and bring in a ton of customers every month. They give service that is expected but aren't very good at following up. Let's say that they sell 100 new customers every month, by new I mean that they aren't repeat or referrals. Through their advertising they are building top of mind, or so their radio and TV reps are telling them so they keep spending a ton of money each and every month on advertising but they still are only selling 100 cars each and every month.

Dealership B

Dealership B is a referral machine, they treat their customers right and work mainly through word of mouth. Management places an emphases on client follow up but they don't spend much money on traditional marketing so they aren't building a lot of NEW awareness but they are increasing their monthly unit count, but slowly.

Dealership C

Dealership C is a hybrid of Dealership A and B, they have a good marketing mix and spend a fair amount of money on tradition advertising but they also put an emphasis on customer experience and building brand ambassadors and relationship marketing (social media). They understand the Law of Compounding Customers (not really sure if it's a law, I may have just made it up! LOL) and that each and every single month, because 45% of their sales volume is from repeats and referrals, that they will grow perpetually, if they keep doing what they are doing.

If you follow with me here for a second I will explain in mathematical detail, to the best of my ability anyway, how you can take advantage of the Law of Compounding Customers. Let's say that in month 1, Dealership C sells 50 new customers and 35 referral and or repeat customers for a total of 85 units. Because of Dealerships C's exceptional track record they know that 45% of their customer will either come back or give them a referral.

Instead of starting from 0 each month they know that in any given month, the new customers they sold in previous months will either come back or send them referrals 45% of the time. In other words, out of the 50 they sold the previous month they can expect an additional 22 sales sometime in the future. If this keeps happening, month in and month out, the number of repeats and referrals will compound on the new customers in addition to the repeats and referrals in the previous months.

Breaking It Down

By listening to your customers and increasing the total customer experience in your business you create an environment for rampant word of mouth. If the point of sale experience matches how you portray yourself on social networks and in traditional advertising then you have the beginnings of a truly great customer experience and which increases your chance of effectiveness and frequency at creating influential brand ambassadors. But, it all starts with listening to your customers and assimilating that knowledge into your business operations to make an even better customer experience.

David Johnson is the social media strategist for Next Generation Dealer Services and author of PersuasiveConcepts.com. Sign up for the Automotive Social Media Newsletter HERE.

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