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Reputation Management: 80 Percent of Car Buyers Now Influenced by Online Customer Reviews*

8 in 10 American Car Buyers Report Online Reviews Influence Their Selection of a Dealership and the vehicle they purchase*

78% of Americans aged 18-64 agree that online reviews help them decide whether or not to purchase from a specific business, including dealerships. This includes roughly one-third who "very much agree", according to survey results released in December by Ipsos Open Thinking Exchange (OTX).

Compared to the global average of 69%, American consumers, including car buyers are 13% more likely to agree that online reviews, including dealership reviews posted by customers, influence their selection of products and retailers, including which car dealer to do business with.

*These statements represent the firm beliefs of the author (Ralph Paglia) and are supported by the data cited in this article and many other reports including research done by Dealer.com and The Cobalt Group.

In fact, the Ipsos results might even underestimate how influential both business (dealership) and product (vehicle) reviews are to Americans. An online survey of 407 US adults by EXPO, also released in December, reveals that 98% of respondents found user-generated reviews helpful when doing online research related to their shopping for all products, including new or used vehicles, and which local retailer (including car dealers) to purchase from.

Returning to the Ipsos results, certain segments of the population appear more reliant on reviews than others. Within the US, women are almost 50% more likely than men to say they very much agree that online reviews and ratings, including car dealership reviews, help them decide which retailer (car dealer) and product (vehicle) to buy (38% vs. 26%). There is also a strong age dynamic at play. Specifically, the 18-34 group is far more likely than the 35-49 and 50-64 sets to very much agree that product and business reviews, including online dealership reviews influence them (44%, 32%, and 19%, respectively). When factoring in those who “somewhat agree,” the gaps are less pronounced, with 84% of the 18-34 bracket, 82% of the 35-49 bracket, and 68% of the 50-64 group agreeing at least somewhat that they are influenced by reviews when selecting products and retailers (including car dealerships) to buy from, including make and model of vehicle to purchase.

Influences Vary by Household Income, Education Level

Interestingly, online business (including car dealers) and product reviews appear to be more of an influence to wealthier Americans than to their lower-income counterparts. Survey respondents from high-income households were 23% more likely than those from low-income households to agree (at least somewhat) that online reviews help them decide whether or not to buy a particular product (including vehicles) from a specific retailer, including car dealerships (81% vs. 66%).

Similarly, respondents with a high degree of educational attainment were about 11% more likely than those with a low education level to rely on customer generated online reviews of products and businesses, including both vehicles and car dealerships (83% vs. 75%).

Asians Highly Influenced by Reviews; Europeans Not So Much

The Ipsos study examines the attitudes of consumers across 24 countries, and finds that those most open to being influenced by online reviews are almost all Asian countries. Turkey (a Eurasian country) sports the highest proportion of online consumers agreeing that they rely on product and business reviews, at 92%. That includes an impressive 58% who very much agree that those reviews help them decide which products to buy, and what retailers to buy from. Turkey was the only country in which a majority very much agreed with the influence of product and business reviews – the next highest was India, with 44%.

After Turkey, a high proportion of consumers in South Korea (89%), India (87%), Indonesia (86%), and China (82%) are influenced to some degree by online product and business reviews.

Those high figures contrast with countries at the other end of the spectrum, whose consumers appear to largely ignore online product and business reviews. Those countries – exclusively European – include France (38% at least somewhat agreeing), Belgium (39%), Sweden (43%), and Germany (47%).

Regionally, the Asia-Pacific sports the highest percentage of consumers relying on product and business reviews (80%), while Europe has the least (56%).

Other Findings:

  • Reliance on product and business reviews is so high in Turkey that an impressive 79% of business owners surveyed there very much agree that online reviews of a business influence their own purchase decisions.
     
  • In Belgium, just 29% of women surveyed agree at least somewhat that they use product or business reviews to help them make purchase decisions, compared to 49% of Belgian men. That means that American women are almost 3 times as likely as Belgian women (83% vs. 29%) to consider online reviews when making a product purchase or deciding which retailer to make that purchase from.
     

About the Data: The Ipsos data is based on a weighted sample size of 12,000, from an online survey conducted from October 2-16 across 24 countries, with adults aged 18-64 in the US and Canada, and 16-64 in all other countries. The US data is based on a sample size of 500.

Data Source: www.marketingcharts.com/8-in-10-americans-agree-that-online-reviews...

Views: 1809

Tags: 80 Percent, Car Buyers, Dealership Reviews, Influenced, Online Customer Reviews, Online Reviews, Reputation Management

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Comment by Joe Chierotti on March 5, 2014 at 5:14pm

These findings, demonstrating just how influential online reviews are on the buying decisions of car buyers might seem surprising, but they're actually inline with results from a non-industry specific survey hat measured the influence of online reviews on customers' buying decisions. The fact that online reviews carry so much weight in determining which automotive dealership consumers will buy from can be discouraging and down right frustrating for car dealerships that have a bad reputation on the internet because of negative reviews. Dealerships can take some security in the fact that there is something that they can do to fight back against bad online reviews.  Many online reputation management companies offer online review management services.  These services are tailored to help car dealerships and other businesses in the automotive industry improve bad online reviews and manage the reputation of dealerships and other automotive related businesses.

Comment by Brian Bennington on January 1, 2013 at 11:17pm

Ralph, I officially closed the "John Reed" situation after you thoroughly explained what happened in a previous posting. Originally, I was surprised by your "reversal," but after reading you were wrong writing what you believed and accepted responsibility for it, I can only think you're a better man for it.  But, this is your site and you shouldn't cave to anyone, even if you think a person has an opinion that means "a lot to many people."

I did notice you've posted ad rates today in your Jan. 1st "AMP Advertising" posting. I can't help but wonder what your tie-in is.  Are you an "Automotive Media Partner"?  Curiosity has the best of me as I also wonder who your looking to attract to buy an ad?  Forgive me if it isn't my business, but being new to ADM, I'm still trying to figure out agendas.  

Comment by Brian Bennington on December 31, 2012 at 7:11pm

Come on, Ralph.  You can stand by you opinion and I'll back you 100% on that. But, nowhere in the article did you say it was "your opinion," and neither OTX or marketcharts mention any reference to auto buyers.  I noticed you didn't even address the Maritz survey results, and that's the nation's largest survey tracking auto buying influences.  And, your comment about "the majority of people" isn't quite accurate, considering they only surveyed 500 US residents.

Please know I am not "anti-technology" or "anti-Internet" or "anti-Ralph," but the Maritz Research findings don't substantiate your conclusion.  And, I believe your comment about "talking to thousands of car buyers" would be described as "hearsay evidence" by anyone debating you, which definitely isn't me.  Call me "old fashioned," because when I read something from a guy with your credentials, I expect it would be accurate and devoid of "spin".  Once again, I want to stress I back you 100% on your educated and knowledgable "opinion" on ADM matters.

One last thing. Maritz Research does not have an "agenda" with their findings. They deal with big companies who value and pay for accurate evaluations and conclusions. Unfortunately, I don't think you can say the same about Cobalt.  Aren't they selling "reputation management"? Regardless, I don't want to debate this with you.  I'd lose!  But, just remember that "the Man with the biggest horn doesn't always play the prettiest music," and, in the world we live in, "spin" conquers everything. I heard that on the Internet and they're never wrong! 

  

    

Comment by Ralph Paglia on December 30, 2012 at 10:43pm

Screen capture from a page from within the Cobalt Group's eBook on the Street Smart Guide to Automotive Reputation Management for Car Dealers:

Comment by Ralph Paglia on December 30, 2012 at 10:42pm

Screen capture of a page from within the Cobalt Group's eBook on the Street Smart Guide to Automotive Reputation Management for Car Dealers:

Comment by Ralph Paglia on December 30, 2012 at 10:40pm

Cover Page of the Cobalt Group's eBook on Street Smart Guide to Reputation Management for Car Dealers:

Comment by Ralph Paglia on December 30, 2012 at 10:39pm

Data point provided by the Cobalt Group's eBook on Street Smart Guide to Reputation Management for Car Dealers:

Comment by Ralph Paglia on December 30, 2012 at 10:18pm

Study Reveals Growing Influence of Social Media on Auto Purchase Decisions

http://www.dealer.com/blog/2011/october/10/new-study-reveals-growin...  October, 2011 (has use of social media and online reviews increased in the past 14 months?)

The study, entitled The Rise of Loyalty, Advocacy and Influence: Social Media and the New Automotive Buying Cycle, examines how social media influences different stages of the car shopping process among nearly 2,000 consumers who had recently purchased a new vehicle or were looking to purchase one within the next 12 months.  The study also explores the impact of consumer advocacy on loyalty. Findings from the study point to early signs of a trend that social media will progressively grow in influence as people increasingly turn to it as a shopping resource. The study also finds that social media use among consumers who consider themselves loyal to at least one dealer or manufacturer is higher than those who have no loyalty, underlining how critical it is for dealers and manufacturers to build, nurture and maintain positive relationships with their customers after they drive their new car off the lot.

"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," said Kevin Root, Chief Product Officer of Dealer.com, who directed the study. "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."

Significant findings from the study include the following: 

  • 38 percent of new vehicle shoppers said they used or will use social media to research their next vehicle purchase.
  • Of those who used Facebook while shopping, 41 percent said they saw a post that caused them to add a brand or model to their consideration; similarly, 28 percent said they saw a posting that caused them to add a dealership to their consideration.
  • Approximately 25 percent of buyers use social media post-purchase to broadcast their purchase and ownership experience, showing a high level of engagement after the purchase. This number jumps to 33 percent for those loyal to a particular brand, and 37 percent for those loyal to a dealership. 
  • Of those who were loyal to a brand, 44 percent are very or somewhat likely to recommend that brand to their social networks; among those loyal to a dealership, that number is 47 percent.
Comment by Ralph Paglia on December 30, 2012 at 9:58pm

Brian, on a separate note, you referenced my article critical of John Reed which you apparently no longer have access to... I turned it private after being shocked and disappointed by the over-reaction of one particular person whose opinion means a lot to many people.  Since it was my article, not someone else's, I have the right to take it private, which I did.  I always kind of liked John reed and the words I wrote must have been poorly chosen because it was never meant to be hurtful, just pointing to a track record of making promises around DMS that did not come to fruition.

With that said, I will make my own prediction for 2013 which i know will come true:

MORE CAR BUYERS WILL CHECK REVIEWS ON VEHICLES AND DEALERSHIPS BEFORE THEY MAKE A PURCHASE IN 2013 THAN THOSE WHO DO NOT DO ANY CHECKING.

Comment by Ralph Paglia on December 30, 2012 at 9:51pm

Hey Brian - I stand by my opinion that the majority of American Car Buyers are using online reviews, ratings and evaluations written and posted by people that don't work for car companies and car dealers.  I speak to enough car buyers to know this is true.  As for the data, if the majority of people say they are using online reviews to determine the products they buy and where they buy them from, why would anyone think "except for new and used cars"?  If anything, the trepidation, low purchase frequency and high price points would point to a trend of people using online reviews MORE for car dealers and vehicles than for other products...

I know many people who do not work in the car business and 100% of them do online research that includes reviews and customer ratings before they decide what and where to buy a vehicle.  I certainly don't look up reviews to by a box of Triscuit crackers, or toothpaste, or any other small ticket items... I do use reviews, as do most Americans for things like cars, dealerships, hotels, airlines, Televisions, Computers, Refrigerators, or anything else that costs over a thousand dollars...

In my opinion, based on countless market research reports and speaking, responding to and communicating with thousands of car buyers; NOBODY goes out and buys a car today without checking some sort of reviews or customer ratings of the product and the retailer.  

Maybe i am crazy, but what the heck products do people check reviews and ratings on if not for cars and dealerships?

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