Social media is impacting all kinds of industries, even ones that have little or nothing to do with social networking. According to a recent study, the automotive industry is the latest to feel the impacts of new media.
On October 10, 2011, DriverSide in partnership with Dealer.com announced the results of a study which links social networking activity such as comments, likes, and status updates to car buyer consumption. DriverSide is one of the first websites specifically designed to help automobile users while Dealer.com is an award-winning online marketing company.
The study titled The Rise of Loyalty, Advocacy and Influence: Social Media and the New Automotive Buying Cycle surveyed nearly 2000 consumers who had recently purchased of were looking to purchase a vehicle. According to the press release, the survey was conducted via web-based self administered reporting. Participants of the survey had to have either purchased a vehicle recently or have reported planning to purchase a vehicle in the next 12 months.
The study looked at how social media influences consumers at different stages of the buying process as well as the impact consumer advocacy through social networks has on brand loyalty. According to Kevin Root, the Chief Product Officer at Dealer.com, “We are witnessing the evolution of the automotive purchase cycle, which takes into account the rapidly growing influence of social media on the car-buying process.” He continued, “”Dealers and manufacturers need to recognize the importance of this new person-to-person marketing phenomenon, where the advocacy of others is increasingly more valuable to consumers than traditional marketing. By making social media an integral part of the marketing mix, they can turn customers into loyalists and advocates, and through them, favorably impact decisions of others about what car to buy and whom to buy it from.”
According to the study, 38% of new vehicle shoppers reported using social media as one way to research their purchase. Moreover, of those who used Facebook, 41% said that posts on Facebook caused them to consider certain brands. 25% of buyers used social media after a purchase to relate their ownership experience. This suggests there is a high degree of social media and brand engagement post purchase. Of people who were “loyal to a brand”, 44% said they were very or somewhat likely to recommend their brand of choice on social networks.
What is significant about the study is that it not only points to the fact that social media is playing an important role in the research and buying process for prospective automobile customers, social media is also a powerful form of brand advocacy. If 41% of those surveyed report being influenced by social media postings such as statuses and tweets, then it follows that the 44% of people who recommend their brand of choice are able to influence future buyer’s decisions. This means that while social media advertising campaigns remain an important strategy for car companies and dealers, it is equally as important that customers report brand satisfaction on purchases. This reinforces that social media is in many ways an extension of word of mouth: a powerful form of advertising based on personal experience.