When Chris Morrison started out as a car salesman 30 years ago in the placid southern Mississippi city of McComb, he spent every Tuesday at local employers handing out business cards and shaking hands.
"In our little town, I knew if I sat in the showroom all day I wasn't going to make any money," said Morrison, now general manager of Honda Cars of Katy near Houston.
Today, Morrison, 51, is still a big believer in networking with local businesses. But he uses Facebook instead of shoe leather and business cards to help him sell cars and service.
Facebook, once viewed mainly as an online cocktail party unsuitable for use in sales, is starting to win converts among auto dealers and factories as an effective marketing tool.
A little more than a year ago, the social media site began allowing ads to be placed on users' news feeds, the part of the Facebook page where users spend most of their time. And in the past month, Facebook has further sharpened its targeting. Using shopping and vehicle registration data provided by outside vendors, Facebook now allows dealers and carmakers to send ads to users based on the age of the prospects' vehicles and other criteria.
"Facebook has been honing its targeting capabilities," said David Matathia, director of marketing communications at Hyundai Motor America.
Morrison said Honda Cars of Katy is getting results. During the past six weeks, the dealership used Facebook ads to sell 16 new and used vehicles to employees of two major medical centers in the area, each of which employs about 3,500 people, he said.
The store has sent ads to all employees at the hospitals who have Facebook pages, Morrison said. Those ads show up on the right side of users' Facebook pages.
The campaign is simple and inexpensive, he said.
The store determines what ad to send, then asks Facebook to deliver it to all employees of certain companies within 25 miles of the dealership.
Honda Cars of Katy has begun testing Facebook's newest targeting feature by having ads sent to residents near the dealership based on the age of their vehicles. Facebook delivers the ads without the dealership knowing specifically who receives them unless a prospect contacts the store.
A big plus of the approach: The dealership pays for an ad only when a Facebook prospect clicks on it. Clicks typically can cost less than $1 to $2.
In April, the campaign to hospital employees cost Honda Cars of Katy $500, Morrison said. It resulted in nine vehicle sales. That's a tiny fraction of the 311 new and used vehicles the dealership sold last month. But it's good incremental volume, he said.
"For $500, that's a pretty good return on investment," said Morrison, adding that the hospital campaign will run through May.
The Facebook campaign also is spurring service and maintenance business, he said.
Honda Cars of Katy has changed ads often during the six weeks. One ad offered a factory promotion for low lease rates on the Civic sedan. Another promoted a special on in-stock Pilot crossovers at $5,000 off the sticker price, Morrison said.
Other ads featured service. One offered 20 percent off the next service visit. A popular one was a $299 deal for lifetime oil changes, Morrison said.
While that offer may be a loss leader, it will get users regularly into the service department where other maintenance and repairs can be pitched. Also, the customers' regular visits provide opportunities for vehicle sales, he said.
Overall, Honda Cars of Katy's monthly gross service and repairs revenue averages $700,000 in 2013, up $200,000 per month, Morrison said, attributing much of the gain to his Facebook pay-per-click programs.