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What does your PRICING have to do with your REVIEWS?

Discussion in 'Inventory Software Support & Best Practices' started by Ed Brooks, Mar 14, 2011.

  1. Ed Brooks

    Ed Brooks Well-Known Member

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    DealerRater and vAuto made an announcement today:
    Eleven vAuto customers received DealerRater’s 2011 Dealer of the Year Awards. Of DealerRater’s total award recipients, vAuto customers represented one-third of the winners, which included the overall 2011 Dealer of the Year – Russell & Smith Honda of Houston, Texas. These results demonstrate a significant relationship between vAuto’s Velocity Method of Management and higher Customer Service Ratings on DealerRater.
    In the release Chip Grueter, president of DealerRater said, “The significant overlap of this year’s award recipients with vAuto customers points to a relationship between vAuto users and customer service ratings on DealerRater.com. Advertising a fair price from day one and reducing the typical adversarial negotiation process can result in happier customers and, therefore, higher service ratings on DealerRater.â€

    Keith Jezek, vAuto’s president added, “There is a new way to be successful in the used car marketplace based on Velocity. The superior scores for vAuto dealers supports that the Velocity strategy achieves both profitability and customer satisfaction. RealDeal also gives dealers a powerful way to prove their pricing to shoppers, and when shoppers feel confident with their price, more deals are closed. Increased transparency is a key success factor in driving customer ratings.â€

    So here is the question; Do you think reducing the old-school "Price High - Negotiate Down" approach in favor of a Market Priced, reduced negotiation environment has an effect on dealer ratings and reviews?
  2. Alex Snyder

    Alex Snyder Administrator Staff Member

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    Ed - not to pour sour milk on things, but doesn't vAuto have a customer-base that is over 30% of the franchised dealerships? In playing the numbers game, it just makes sense that vAuto would have at least 1/3rd of the top DealerRater dealers.

    With that said I think there is absolutely a correlation between fair pricing and happy customers. Let's keep the conversation on that track ;)
  3. ECURB

    ECURB New Member

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    My personal feeling is that online reviews hold very little value... they can be easily manipulated and most people know this and do not trust them much.

    Obviously though it is important still to have some good ones... :lol:

    If someone is already searching you out, chances are they already know of you and some random review from Ilovepoodleslady647 on Google will not sway them... if you still have what they want they will take their chances and trust they are smarter/better than the person who was not happy.
  4. Alex Snyder

    Alex Snyder Administrator Staff Member

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    I'm going to agree with you that online reviews are not enough of a power to make or break a dealership's profitability today. This is due to established marketing channels and years of being known within the community. What of tomorrow?...

    We are already seeing a massive shift in marketing, and the younger generations aren't even investing 1 minute in traditional medias' advertising systems. The channels that do get to these generations (I'm a part of one of them) are considerably expensive to maintain along with the advertising budget that is required to reach the older generations. As more and more people are unreachable through the older media channels the newer channels will increase pricing to compensate for a new-found income source, and these same channels will become much more diverse. The organic channels (review sites being one) will play a pivotal role in advertising.

    People will also be better adapted to trusting online reviews (I don't agree that people think they're all fudged). Today people are absolute trusters of product reviews and we're just beginning to see wider adoption of services reviews (restaurants, hotels, car dealerships).

    So, I agree that there isn't an overwhelming value in review sites today. BUT there probably will be tomorrow and who knows how soon tomorrow is?

    Does pricing affect reviews?
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  5. Ed Brooks

    Ed Brooks Well-Known Member

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    From your lips to God's ear! We are no where near a third of the franchise dealers in the country. But I love the optimism!
  6. Marc McGurren

    Marc McGurren New Member

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    I will actually disagree with both you and Alex to some degree in that review sites aren't uber relevant today. I will agree with Alex in that they will play a major factor in tomorrow's game. I take a major stance in making sure all of our reviews are legit, not tainted, and no spiffs to salespeople, or free "widgets" for customers to leave reviews.

    I want complete 100% transparency with our process that way no one can ever say our reviews are bogus. I am AMAZED at how long of reviews people leave when they are happy. I know for a FACT we sold 7 cars directly from our DealerRater.com reviews...and believe its even more but I know 7 cases where the customer came in b/c of our reviews. Some of those people came in and asked for a saleperson by name w/o ever meeting them. This particular salesperson had quite a few reviews and the customer saw that - therefore wanted to be treated the same way.

    With that said to the topic at hand - easy, up front pricing, treating people with a "golden rule" mentality, and exceeding customers expectations is what it is all about. I literally had a customer post on our facebook wall a "review". I then thanked him for his words and asked if he would write a review on DealerRater.com - within 5 minutes of my response he had a review posted!

    Happy customers want to tell others how happy they are!!! Plain and simple. My dilema right now is where to send those customers for reviews....just wrote a short blog on drivingsales about how to figure out where and how to point customers to review sites due to everyone jumping on board the review bandwagon.

    All that to say - we hope all of our competitors around us think reviews won't matter. While they are asleep we will start to dominate. And once the weight and importance of transparent reviews rise in the VERY near future - our dealerships will be a step ahead of the game. Game on!
  7. JoePistell

    JoePistell Super Moderator

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    I am 100% in Marc's Camp.

    If I am shopping for a new car and my finalists are within $500 of each other, I'm not going to call the 2 star guy.

    Google is all about delivering the best user experience possible and pushing user ratings into the research results is smart business. Personally speaking, I won't use reviews for airlines or rental cars, the differences between them are not significant. But, reviews are killer data when hotel shopping. Most all Hotels are different just like Most all Dealerships are different. This makes us closer to the hotels than to car rental agencies or airlines... ergo the importance of reviews.

    Reviews has totally changed the Hotel marketing biz. I've read that good players have swat teams to look for and address bad reviews.
  8. MullerToyota

    MullerToyota New Member

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    I disagree.

    Much of my shopping, from inexpensive to expensive purchases, deals with checking reviews. I understand that reviews can be manipulated to some extent - but try getting that person who is legitimated pissed off of Dealer Rater - and you will be fighting an uphill battle.

    I think it becomes pretty apparent by checking a few places what products I want to purchase - and where.
  9. Alex Snyder

    Alex Snyder Administrator Staff Member

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    Joe & Marc,

    Some of the worst reviewed dealers are the largest in their markets. Why is that?
  10. MullerToyota

    MullerToyota New Member

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    You aren't kidding! I have skipped a few hotels do to online reviews when traveling.

    Just caring enough to manage your reviews is a plus for me - than the company that clearly does not.

    Oh, and pricing clearly has an effect on your reviews. Not just for customers that buy - but also for customers that don't!
  11. JoePistell

    JoePistell Super Moderator

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    Boat loads of Traditional Advertising.


    Our industry marketplace is gigantic. Frickin everyone drives a car. If a dealer has the inventory SIZE, or the right franchise, then spending big big money in Traditional Advertising has excellent marketing ROI. This behemoth spending drives traffic right to the dealers site (bypassing the common shopping path: google >> AT & Cars, etc...)

    When your the 800lb gorrilla in your market, your waste can be bigger than some of your competitors budgets. A monster dealer can take the 30-40 lost sales per month and not even see it or feel it. I know it because I see it everyday.

    I am not saying it's right or wrong... it just is.
    Last edited: Mar 14, 2011
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  12. Ed Brooks

    Ed Brooks Well-Known Member

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    Bruce, I have to agree with you that a single review from "Ilovepoodleslady647" wouldn't sway me to shop or not shop a specific dealer. It's not the individual reviews that would concern me, it's the cumulative effect.

    The larger the sample size, the more faith I have in reviews. A good example is Acton Toyota. They have about 1250 DealerRater reviews. The average score is 4.8 out 5.0. As a customer would I have confidence I would be treated fairly at Acton Toyota? Absolutely! I don't need to read the individual reviews to have that faith. And would I be more likely to shop or have service done at a dealer with over 1000 reviews and an almost perfect score than one with 8 reviews and a 2.5 average? Absolutely again!

    If they are searching your dealership name, I think you're not in nearly as much danger. But if they are searching for "Boston Area Toyota Dealers" the dreaded "7 Pack" will show on Google - Complete with Star Ratings!
  13. JoePistell

    JoePistell Super Moderator

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    I agree with Ed, Size matters for sure! #of stars and # of ratings are important.

    I am a TripAdvisor junkie. In my case, if I have a "finalist", I always read the first bunch of reviews presented (regardless of the number of reviews). Then, if the review sample is small, and the reviews are great, I'm always still undecided, wishing it had more.

    Ed nails it again!
  14. ECURB

    ECURB New Member

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    Very True

    I certainly do not think reviews should be ignored, just maintained.
  15. Marc McGurren

    Marc McGurren New Member

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    I will agree with Uncle Joe as well and add on - people expect it. I am amazed at how some dealerships can treat customers yet they still sell the amount of vehicles they do. I think that is why when you treat a customer with dignity and respect - they are MORE than happy to leave a glowing review b/c they have never experienced it.

    With that said - transparency is coming and those that are asleep at the wheel will be blindsided in the next year or two by ignoring their online reputation. Those dealers that embrace a transparent reviews and do so with the upmost integrity will be the real winners...not just with the positive reviews that will be posted, but the effects of such reviews. This is the new word of mouth. Everyone wants a friend in the car business. Everyone wants to be treated fair. Everyone wants someone they can trust. Why can't that be me? Hopefully it will...:)
  16. Alex Snyder

    Alex Snyder Administrator Staff Member

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    I just asked the question because I wanted to prove I was right :) ....about today. I think we all agree tomorrow is a different story.
  17. JoePistell

    JoePistell Super Moderator

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    I humbly disagree bro. The 800lb gorilla model by passes the Google Places/Internet Review system... Now or next year.

    Carpet bombing a market drives internet traffic directly to the site. Also, while inside Cars/AT, the added brand awareness (from the carpet bombing) helps CTR. All of this is outside the Google Places/Internet Review system.
  18. Ed Brooks

    Ed Brooks Well-Known Member

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    I'd never disagree with you Uncle Joe - I know I'd be wrong more often than not. While I agree the 800 pound gorilla in a market often gets to bypass the Google Places step of a shopper's process, I don't think they get to bypass the ATC/Cars.com step - at least not always. With retail customers spending 18 to 19 hours, on average, doing research before setting foot into a dealership, I think it's likely that they would compare pricing on one of the classified sites - even if only to keep the gorilla "honest".

    With the classified sites integrating reviews, the 800 pound gorilla's free ride may be over. Seeing reviews used to be limited to the Google step. Now it's being integrated into the pricing comparison step.
  19. Alex Snyder

    Alex Snyder Administrator Staff Member

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    We're saying two different things Joe. I'm simply saying that reviews are not hurting or directly increasing profit enough TODAY to be taken as seriously as they should be tomorrow. If the 800lb gorilla were being hurt by the reviews they'd be paying attention to their reviews.
  20. Jeff Kershner

    Jeff Kershner Founder Staff Member

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    The 800lb gorilla typically has a lot of ego and prefers traditional marketing. Their less likely to be watching nor caring much about reviews.
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