In 2008, Facebook started to get the attention of the automotive business. Dealers from around the country started creating Facebook pages and wanted to get as many “fans” (as they were called back then), as possible.

Marketers and agencies from across the country jumped on the opportunity to help dealers manage their pages and get them fans. After a few years, dealers started realizing the fans/liked didn't sell cars, at least it wasn't generating a measurable ROI, that is when the marketers started telling dealers “Facebook is not for selling cars, its for brand recognition”. Marketers had to use this “pitch” because dealers would not continue to pay for something that did not generate a ROI.

Fast forward to today, and that pitch is dead. Most dealers have given up on Facebook and decided to focus their money towards other advertising mediums. Dealers spend $500-$1000 on Facebook simply because they feel like its required. They don’t take it serious and usually pay some low level employee to keep their Facebook pages maintained.

Facebook clicks to websites have a huge bounce rate. Facebook advertising is not like Google Adwords and other forms of digital marketing. You are reaching people before they go search for your product. We call them “high funnel” shoppers. So when you direct these people towards a clumsy website, they tend to bounce because their purchase intentions are not strong. They saw an ad that got their attention and clicked it. If presented with any friction they will bounce.

About 4 years ago, Facebook started to realize this larger than normal bounce rate and they came out with something called Facebook Lead Gen ads. These are ads that capture a lead (name, phone, email) before the person ever lands on your website. Since Facebook already has the person’s data on their profile, they make it really easy by pre-populating the lead gen form with the shopper’s information. It makes lead capture as easy as three clicks without ever leaving Facebook.

These lead gen forms give you the opportunity to get a sales person in contact with the shopper and pull them down the funnel. A good sales person can work with any shopper who even has a slight interest in a product. Give me someone with a heart beat and any intention of purchasing and I’m going to talk them into the purchase.  

Here is the next hurdle our industry will need to face now that we can pull higher funnel leads directly off Facebook. Over the past decade dealers have started to spend most of their money on “in-market” shoppers, people who have decided to purchase a vehicle already and are using the internet to make a smart purchase decision. These in-market shoppers were gold for dealers who jumped in early. If you priced your inventory lower than any other dealer in town, you were sure to get the car deal.

The only problem today is, every dealer now has their lowest online to compete for these people. The prices only range a few hundred dollars in most cases. Sometimes there is no range at all. Some dealers have started using addendums to make their prices more attractive online to capture leads and when the customer arrives at the store the price is different for the addendum items. This has created the race to the bottom, gross decompression, that dealers are faced with today. It is also generating a bad reputation for the car business. It’s just not good business.

This type of in-market shopper marketing has created a generation of car salespeople who are used to working with customers simply looking for the best price. Facebook doesn’t generate that type of customer. We currently manage 30,000 leads for car dealers monthly off of Facebook. Our data says not every shopper is looking for the best price. Many just want an easier car buying process or they are impulse buyers who just need to see a car and have a good salesperson convince them that now is a good time to come into the dealership.

Many dealerships are so focused on these in-market shoppers that they immediately send emails to leads with their bottom line price (often a price that loses money and they pray to make it up on the backend or with an addendum). They have processes setup to sell cars over the phone and email. They don’t have staff trained on how to set an appointment without giving out a ton of information. This process does not work with a higher funnel lead. The higher funnel lead has not made up their mind on which car they want, giving them a price does nothing but make them feel like they are being pushed into purchasing one.

We have found that setting appointments for these higher funnel Facebook leads is the best practice to yield the highest ROI. Get a strong sales person to convince the customer to come into the dealership and look around. To take a few vehicles for a test drive. Sell the idea of purchasing a new car, do not sell the car until they are sold on the idea. The best way to turn shoppers into buyers is to get them into the driver’s seat of a new car.

For those who have been in the car business for more than a decade, we already know what this means. This is how we used to work customers from TV, Radio, Newspaper, Direct Mail advertisements. We did not want to sell cars over the phone. We used to call it getting them "under the ether”. Facebook lead gen is very similar to traditional forms of marketing, before we had the ability to target in-market shoppers. Call it old school, call it what you want, it works with these higher funnel Facebook leads and worked for decades before the dawn of in-market shoppers.

Of course you should still try to get every car deal possible and use the in-market channels you have available, but you should also go a little higher funnel and get as many of the customers as you can, before they fall down the funnel into another dealer’s lap. These higher funnel leads yield higher grosses and can help offset the gross profit problem dealers face from playing in the race to the bottom. I’ve seen too many dealers close shop this past decade and sell out to larger groups. They can’t compete against the big guys that can offer lower prices and if you don’t have gross or volume you can’t keep the doors open.

We have dealers spending 80% of their budget on Facebook advertising. Don't be late to the party! If you would like to see a Facebook strategy that sells cars, generates gross profit with a trackable ROI, please feel free to reach out, my email is jason@tecobi.com.