THE RISE OF - Dealer.com

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THE RISE OF Social Media and the New Automotive Purchase Cycle

JANUARY 2012

Contributors Kevin Root, Chief Product Officer Dealer.com Eliza Kelly, VP Marketing Dealer.com Jad Dunning, CEO DriverSide.com Alan Czarnomski, Executive VP GfK Automotive Kevin Hern, Lead Designer DesignPartner Jeff Ferland, Senior Designer Dealer.com Mike Hannigan, Editor Methodikal

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Introduction

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Executive Summary

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Chapter 1: The Past, Present and Future of the Automotive Purchase Process 8 The New Automotive Purchase Cycle 11 The Rise of Social Media and Two-Way Marketing 12 The Role of Businesses in Social Media

13 Chapter 2: Social Media, Pull Marketing & Customer Loyalty 13 Surveying the Role of Social Media in the Automotive Shopping Process 16 The Shift from Push to Pull Marketing 17 The Impact of Social Media on the Four Primary Stages of the Automotive Purchase Cycle 23 Awareness, Trust, Loyalty and Advocacy

29 Chapter 3: The Five Fundamentals 30 Step 1: Embrace Social Media as a Vital Communications Channel 31 Step 2: Ask Prospective Customers to Like/Friend/Follow You 32 Step 3: Create Content That Drives Consideration and Sales Among New Customers 33 Social Case Study: What Drives Edward 35 Step 4: Create Content That Drives Loyalty and Advocacy Among Owners 37 Step 5: Leverage Social Media to Break into the Consideration of Loyalists and Encourage Competitive Switching

38 Chapter 4: Looking Forward 39 Appendix 39 Methodology 40 Resources 41 Companies

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THE RISE OF LOYALTY, ADVOCACY & INFLUENCE ©2012 Dealer Dot Com, Inc. All Rights Reserved. 12.11

Introduction The rise of social media has broad implications for retail businesses, especially the automotive sector. Consumers now have the ability to broadcast their opinions and recommendations to their networks via social media. To understand the effect of social media on dealers and manufacturers, DriverSide and Dealer.com partnered with GfK Automotive Research to study the impact of social media on the automotive shopping process. The organizations set out to answer the following questions: TM

How are car shoppers using social media to research brands, models and dealerships at different stages of their shopping journey? What is the impact of consumer-to-consumer recommendations on vehicle consideration and purchase decisions? What prompts consumers to follow a dealership or manufacturer on Facebook or Twitter, and what responsibility does that entail for the business? What is a new decision-making model that accurately reflects the car shopping process with social media? What are the most successful social media strategies that appeal to consumers and maximize advocacy and loyalty? The organizations surveyed nearly 2,000 U.S.-based consumers who had recently purchased a new car, or who were planning to purchase one within 12 months and had started shopping. The findings from the survey reveal just how much consumers are influenced by the advice and advocacy of others via social media channels in making their purchase decisions. The findings, along with other recent research undertaken by technology and business leaders, shed light on the importance of building loyalty and encouraging advocacy among consumers so they positively influence other car shoppers. The findings also formed the basis for a new model that accurately reflects the influence of social media throughout the purchase process. At the end of this report, we outline the Five Fundamentals, five concrete steps that both new car dealerships and manufacturers need to follow in order to leverage social media to maximize loyalty, advocacy and influence. Q

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THE RISE OF LOYALTY, ADVOCACY & INFLUENCE ©2012 Dealer Dot Com, Inc. All Rights Reserved. 12.11

Executive Summary Dealer.com, DriverSide and GfK Automotive Research partnered to explore the impact of social media on the car buying process.