CAI Exclusive: Managing Your Digital Reputation: Not Just a Budget Line Item, But an Investment That Goes Straight to Profitability

By Richard Winch, President/CEO, eXtéres Corporation

Too often, car dealership business decisions are made based on questions like, “What does it cost?” or “Exactly how many additional units will I sell?” I’m not suggesting that return on investment (ROI) isn’t an important consideration in making expenditure decisions when it comes to business. I would argue, however, that you can’t always draw a straight line between an expense and its positive effects on the bottom line. Rather, I would submit that the number-one most effective source of acquiring new customers and boosting business and profits is through customer referrals: always has been and likely always will be.

 Your Customers Spend a Lot of Time Online, and They’re Peer-Influenced

We all know that today’s consumers spend most of the vehicle purchase cycle online. In the digital realm, early impressions are formed about where to do business and where to avoid doing business.  Personally, if I see an overwhelmingly negative take on a dealership online, I won’t set foot on the lot, no matter how compelling the inventory or the likelihood they have the vehicle I want to purchase. It’s just not worth the aggravation.

Conversely, when online reviews reflect well on a dealership, I will focus my efforts on finding what I need from their inventory and choose to do business accordingly. Here’s a less definable factor with roots in psychology: I’m also less likely to be defensive when I walk onto the lot with the good reviews, since I’ve already been put at ease about their business by positive feedback from my peers.

 Managing Your Digital Reputation

We’ve established that it’s important you mind your brand’s reputation on the Internet. So where do you start? Following are a few pointers for car dealerships when it comes to the online review arena.

Evaluate the “now,” not the “was.” The number-one criteria to consider are your reviews RIGHT NOW. There’s a big difference between what your published star rating is on a review site versus the actual average star rating your reviews have been receiving over the past six months.

Let’s say, for example, that today your Google listing shows a 4.7 star rating, but for the last six months, you’ve been averaging a 4.0-star rating. If you continue the 4.0 star rating trend, then over time, your 4.7 star rating will go down. Conversely, if you have that same 4.7-star rating today, but your average rating for the past six months has been 4.9 stars, then if your 4.9 star rating trend continues, over time, your 4.7 star rating will get a lot closer to a 4.9 star rating. Very often, I see dealers focusing on their published score while ignoring the importance of the actual here-and-now trend.

Engage in some analysis. Take action and do an analysis (or have one done) of your average star ratings and review counts for the past six months on the top five review sites such Google, DealerRater, Cars.com, Facebook and Yelp (expect lower averages on Yelp). If possible, also quantify results on other secondary sites for the most complete picture possible. The results from this analysis will tell you whether you have the right solution in place.

See it from the consumers’ perspective. Turning our attention to specific star ratings, it’s important to consider that consumers today don’t consider a 4.0 star rating out of 5.0 possible stars as a particularly good rating (though it’s a solid “B” in academic terms, it’s more of a “D” in the online review/peer review arena).  In reality, dealers should be looking to achieve a minimum 4.5-star rating, with an optimum target of 4.7 stars.

Keep an eye on review volume. It’s advisable to pay attention to monthly review volumes, as consumers are more concerned with the level of service you are providing your customers with today over how you treated your customers six months or a year ago.  I would argue that even if your reviews reflected problems a year ago but your performance has improved in the last six months, those last six months will be a better representation of how you treat your customers today.

Leveraging Your Investment

So what’s the best strategy for leveraging your investment in your online review strategy? For starters, I should make it clear that — contrary to the belief of one review site (I won’t mention names) – there’s nothing wrong with putting a process in place to engage with your customers to ensure that they’ve received great service at your dealership and that it results in a positive consumer experience (and a great review).

It’s a way to work the process to get out in front of potential shortcomings with a particular customer, as well as encourage customers who’ve had positive experiences to share them online. After all, before the Internet, didn’t we ask our customers for referrals? Don’t we still ask for them today?

Consider Taking a Different Approach to Reputation Management

You’ve hired the right company, and it’s delivering the quality and quantity of authentic, direct, first-party customer reviews. Don’t stop there. Use these reviews in other consumer marketing channels such as traditional print advertising, on your website, in your digital campaigns and throughout visual touchpoints in your store. Why not have your reviews repurposed as short informational spots on screens throughout your showroom? Think of a process in which you could live-stream your most recent reviews on monitors throughout the dealership or on electronic billboards.

Choose the reviews that best support your great customer culture. This way, you’re using your stellar review reputation to target in-market buyers who have never shopped with you before, essentially messaging your future customers about why doing business with your dealership will be a rewarding experience. Let your happy customers sing your praises. (A note to the wise: be sure that your actual online reputation is in line with the messaging.)

It’s an Ongoing Process

A review management strategy is not a “set it and forget it” approach. You need to embrace review cultivation as the vital pulse of your business. Engage with your customers, learn where you can do better and get your customers to sing legitimate praises about their experiences with your business.  Interact with your customers by responding to positive reviews. Reach out to customers who leave negative reviews (without being combative) with a genuine approach to addressing their concerns.  Leverage your efforts in your marketing, take your investment in your review strategy and amplify it to the world.

Do all these things in a legitimate way, without employing tactics such as fake reviews, and you’ll see why your online review management strategy might just be one of the most important line items on your budget.

Richard Winch is the CEO and president of Riverside, California-based eXtéresAUTO Corporation, a provider of digital marketing technologies for auto dealerships. He can be reached at [email protected].