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Most Car Buyers Now Select Dealership Based on Reviews

Car Shoppers Head to Review Sites for Research

Almost seven in 10 consumers said dealership reviews affected their purchase decision

Just like consumers in almost every other sector of ecommerce, car shoppers are doing their research online before heading out to make a purchase. According to an April 2012 poll by Digital Air Strike of US consumers who had purchased a car in the last six months, review sites were a widely used tool by car buyers during the research phase of their purchase process. In fact, 69% of consumers said review sites had an impact on the dealership they visited.

 

Half of respondents said reading reviews of dealerships had affirmed their choice of where to make a purchase, while about one-quarter said the reviews had no effect on them. But online feedback from other customers held an outsized influence on a small minority of car shoppers—14% said reviews were the sole reason they had decided to visit a dealership. And 5% decided to change the dealership they bought from after reading negative reviews online.

And when it came to actually buying, almost seven in 10 shoppers said reviews had aided them in their purchase decision. About four in 10 said the reviews helped them in a general sense, while three in 10 had decided to purchase from a particular dealer based on online feedback from other customers. Moreover, if a dealership had been completely absent from review sites, one in 10 respondents would have been less likely to purchase from them.

Digital Air Strike’s report also audited 600 US dealerships to gauge their social media presence, finding that most dealers had a lax attitude to Facebook, with only 5% posting on the social network daily. In fact, 42% of dealers posted with a frequency of less than once a week.

 

eMarketer estimates that US online ad spending by the automotive industry will hit $4.35 billion in 2012, and climb to $7.44 billion by 2016.


Read more at www.emarketer.com/

 

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Tags: Based, Buyers, Car, Dealership, Most, Now, Reviews, Select, on

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Comment by Tom Gorham on August 2, 2012 at 7:35pm

David, I'm not sure if customers would drive quite a distance because of reviews.  But I am quite sure they will drive past a competing dealer who has bad reviews to get to one who has good reviews and a great reputation.  In fact we have some repeat customers who have moved over 40 miles away and still come back for service and sales.  Since this is a metro area, there's a lot of dealers in between.  Reviews are merely a reflection of great customer service.  If 5-star reviews don't match in-store reality (sounds fishy eh?), Social Media and word-of-mouth will sink the dealer.

Comment by David Alpern on August 2, 2012 at 12:45pm

Related...it would be interesting to see research on how much reviews and reputation management, as discussed here, is counter-balanced by local. For instance, the dealer with the best/better reviews/reputation might require a customer to drive by one or more of that same OEM to get to, so they might not "go the distance". Also, curious as to if the reviews might have greater influence regarding where the car is purchased (willingness to trek to a farther away dealer) but for their routine service needs customers might be choosing to go their most convenient by location (regardless of reviews). Thoughts?

Comment by Tom Gorham on July 31, 2012 at 4:43pm

Ralph, Ryan, I'll buy you both a drink at AutoCon2012 if I can sit in on that conversation!

Ryan, we've spoken about Mike Blumenthal before.  Thank you for the link.  We've always been on the same page about in-house reviews.

Ralph, thank you for the tip.  I love the idea of getting written reviews and scanning them for the website.  I've never heard of that and it never entered my mind.  I like it!

I do believe this is an issue the "time will tell" and I will stick with my own instincts on it.  The really great news is that those who have taken reputation management seriously are being vindicated.  Once again, great article!

Comment by Ralph Paglia on July 31, 2012 at 4:18pm

Ryan,

I was one of the first people to announce that what I was seeing was Google "Filtering" dealership reviews, (March) and most notably the reviews entered at the dealership using a process resulting in a consistent IP address source of those review postings.  That is why i recommend doing in-dealership reviews with either Presto Reviews or BusinessRater.

The dealerships who are using an in-store review collection process are not using Google Reviews, those are part of the choices offered to customers via email and their review "You Have A Voice" website. Also, I would never condone anyone other than the actual customer posting reviews on behalf of the customer.  What I have done is take customer hand-written dealership review "cards" scan them and then create image slide shows of the reviews in the customer's own handwriting on the dealer's website, Facebook, blog sites and Flickr.  They are especially effective when right below the images of the scanned customer review cards is the RSS fed display of reviews from DealerRater! (you can buy me a drink in Las Vegas at AutoCon 2012)

Comment by Ryan Leslie on July 31, 2012 at 8:16am

Ralph,

I agree with you on so many things and respect what you've done to accelerate the adoption of "new marketing" concepts in the industry, you are tremendously influential. I'm not blowing smoke at you, I agree with almost everything you post here... until we get to in-store collection of reviews. I want to stress that this isn't necessarily DealerRater's position, it IS mine however.

I'd like to suggest, respectfully, that the "universal success" you are seeing is temporal. I'm not an "I told you so" kinda guy, but ever since Aug 2011 I've been saying that Google could not continue lax enforcement of their TOU, and I have strong reason to believe that we are about to see REAL enforcement.

To all readers of ADM that have an interest in Google's local programs and reviews, you owe it to yourself to subscribe to Mike Blumenthal's blog. I've had the pleasure of talking with Mike on the phone and via email and he is one of the most knowledgeable authorities in this niche. He is not a car guy and although he has some dealership clients he doesn't make his living consulting in automotive. I have really come to appreciate his outsider's opinion and find him to be an excellent resource.

Remember Lord of the Rings when Frodo puts on the Ring and the all-seeing eye of Sauron fixates on him? Appropriately, the all-seeing eye is Google and they have their eye on "Spammy" Reviews that are being posted on G+ Local for car dealerships. (jump to Blumenthal's post from yesterday here and read the comment thread for additional insight).

Google is actively removing "Spammy" reviews from Dealers... and they are singling Dealers out!!!

I asked Mike to clarify what Google meant when they said "Spammy" and WHY of all the industries clamoring for review content are they singling out car dealerships. He is under an NDA and couldn't give specific details, but his synopsis is telling...

The ones that I have looked (at) appear to be guilty of either the misuse of on site terminals to gather reviews or the use of third parties to post feedback cards as reviews.

This got really long, I apologize. Two take-aways from Mike's comment as final thoughts:

  1. Vendors that are "posting on behalf of" a dealership's customers by creating profiles and using CSI scores, handwritten notes, their own conducted surveys are doing dealers a tremendous disservice. That is Reputation Management done wrong and dealers have every right to seek recompense when that content is removed... If the person with the firsthand consumer experience isn't hitting submit, you need to be very concerned.
  2. Clearly not all in-store collection is prohibited by Google, but this looks like a classic case of given an inch, took a mile. From Mike's statement we can infer that some have WAY overdone it. I've said it here before, but 5 stars and 5 words isn't a review. The process needs to facilitate REAL feedback, positive and negative, and I can't think of a way to accomplish that in-store. A process that gets 99% of customers writing something IS NOT "success" and it appears is likely to be removed anyway.

Ralph, I appreciate the dialogue and the opportunity to discuss and share very different opinions on this topic. I'm looking forward to seeing you at AutoCon and hope we can pick up the conversation in person.

Comment by Ralph Paglia on July 31, 2012 at 1:45am

Ryan,

I am aware of your opinion regarding the collection of reviews while customers are still at the dealership, and I respect the logic behind your "policy" on this issue.  The reason why I have become a fan of collecting reviews while customers are still at the dealership are as follows:

  • The dealers that implement the process are very successful with it
  • Management has the ability to address customer concerns while customers are still at dealership
  • Getting customers to complete the review and survey before finance fills in time with a useful endeavor, thus reducing the level of dissatisfaction customers have with waiting to get into F&I
  • Because the process benefits the salesperson by easing the transition to F&I it gets executed at dramatically higher rates than alternate processes

Did I mention that the dealers who do in-dealership reviews seem to be universally far more successful than those that solely rely on reviews after the customer leaves the dealership?

Like I started out, I understand why DealerRater forbids in-dealership reviews, and I still prefer DealerRater Certified Dealer Program for OUTSIDE THE DEALERSHIP because of the ease of content syndication that DealerRater provides, but with so many dealers experiencing dramatic success using a combination of in-dealership and out-of-dealership review generation practices, it is once again simply something that works.  Having been there at the dealerships that do it, the reaction from customers is generally very positive. Some people decline, but that is a fairly rare occurrence.

Comment by Ketty Colom on July 30, 2012 at 7:03am

Ralph, 

I do believe more people are researching online as well. I did the same thing when I was looking to purchase a car. I even wrote this blog about it in late June: http://blog.activengage.com/2012/06/boosting-your-dealerships-rating/

Comment by Tom Gorham on July 28, 2012 at 5:02am

Ryan,  I've stated many times on ADM that I disagree with in-house reviews.  We have the saying in sales that the car is not sold until it's down the road.  Doing a review before that happens seems to me to be putting the cart before the horse. 

I do love this article because it validates dealers who are paying attention and have been doing the right things for reputation management.

Comment by Ryan Leslie on July 27, 2012 at 9:01am

Ralph,

We've talked about this in another post. I respect your opinion on a lot of things, but I could not disagree more with in-store collection before the customer goes to F&I. Can you imagine staying at a swanky hotel and having the concierge bust through the door at 2am throwing an ipad on the bed and "asking" for a review. Naturally you'd say, "But I'm still sleeping." "That's fine Mr Paglia, maybe you could just review us on the check-in procedure?"

You don't review a restaurant before your meal, you don't review the wedding photographer before you see the pictures, you don't review the dentist DURING a cleaning, you don't review the pedicurist after the 3rd toe, you don't review the barber before the obligatory spin-around, you don't review your eBay retailer before you receive the item...AND (wait for it) you certainly wouldn't review AutoCon based on your enrollment experience :)

I'm sure you don't like the analogies and in case it didn't translate, I'm trying to use humor to illustrate my point, but the similarities are hard to dispute. You've experienced half of the operation and can't give a complete review of the business, much can go wrong after the review that won't be brought to management's attention, as the reviewer you're on the short end of a complete imbalance of power ("what happens if I say something bad?"), and the ONLY party that benefits from you writing a review before you've completed YOUR business is the business owner... and even that "benefit" is only partial. Do you believe there is no value in customer feedback on the F&I team?

I'll be very clear about my opinion to try to stimulate some discussion: There is far too much at risk for a dealer that truly values their reputation to collect reviews before F&I. The risk does not justify the additional content you wouldn't get through any other collection strategy. Choosing, or suggesting, this method of collection is focused solely on marketing and sacrifices most other benefits associated with review collection in my opinion.

Again, certainly no disrespect intended at all. I hope you don't see it that way and I greatly appreciate the forum to discuss and debate these things. I don't think this is a "rational people can disagree" topic though. There has to be a right and wrong on this one and I WANT to be convinced I'm wrong if you feel that I am. Why do you feel this is a best practice for dealers and consumers?

Full disclosure: I work for DealerRater but my words are my own and I'm not selling anything here. My interest in the discussion is academic, not financial. The only thing I hope to gain from this post is that the potential damages of in-store collections are seriously considered before the strategy is adopted.

Comment by Tom Gorham on July 27, 2012 at 5:58am

Ralph, staff involvement is tough but crucial.  We do several things to encourage participation.

We send an email containing the reviews throughout the dealership complimenting the employees that received them or were mentioned in them. 

Each Salesperson or Service Writer that has enough reviews gets their own personal "Review Page".  Under their staff pic on our website, they get a link to that page saying, "See what my customers say." 

The sales staff review page includes a link to all of their walkaround videos on YouTube.  We occassional spiff an employee for a great review, especially non-sales employees such as porters.

This is all part of their "individual reputation management."

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