Online Dealer Reviews - Are They Ready For Prime Time?

[Jeff Kershner]

Online Consumer-generated Dealer Reviews

I keep reading that dealer ratings/reviews are becoming important, and that dealers should encourage their customers to go online and fill them out.  While I agree that consumer-generated dealer ratings may someday become an integral part of the automotive sales and service process for consumers, we’re not there yet.

People can go online to find consumer ratings/reviews on almost anything: for instance, Epinions.com has 79 different models of toasters with at least one consumer review each.  A critical aspect to building any ratings is the network effect: ratings become more valuable and useful as more consumers visit and contribute.  Conversely, Web sites that are unable to attract sufficient traffic and consumer ratings stall out.

For this article, I visited three Web sites with automotive dealer reviews: DealerRater, Edmunds, and Yahoo.  In my survey of these sites, I searched for the top 20 dealerships from the Ward’s Dealer 500 – these high volume dealerships should be good candidates to attract consumer ratings. 

DealerRater, as the name indicates, is a standalone site focused on dealer ratings and reviews.  In its six years of existence, it has managed to accumulate many reviews: of the top 20 sites, eleven dealers have five or more.  On the downside, many of these postings are old, indicating that the site may be losing momentum.  For instance, Crevier BMW (Santa Ana, California) has 19 reviews total, but only three since January 2007.  There are also other problems that hinder the site’s viability.

• No consistency in dealership names.  For Ray Catena, a New Jersey-area dealership group, DealerRater gave me ten different options, including Ray Catena (2 reviews), ray catena (0 reviews), Ray Catena Motor Cars (7 reviews), Ray Catena Jaguar Porsche (2 reviews) and Ray Catena MErcedes Benz of Union (0 reviews).  Note: the last is not a typo.
  
• More ads than information (as shown below).
  
• Sales and service ratings/reviews are mixed together.

On Edmunds, where vehicle research is the primary attraction, dealer ratings play a secondary role.  Still, Edmunds does better than DealerRater in some respects, including separate sales and service ratings, a map showing the dealer location, and less advertising clutter.  On the downside, I found fewer reviews: the greatest number was eight total reviews for South Bay BMW (Torrance, CA).  Many dealers had one review or none.  It remains to be seen whether Edmunds’s volume of dealer ratings will achieve the robustness needed to be a useful source of information.



For Yahoo!, ratings are an additional piece of information that gives users a full understanding of any product or service, including dealers.  As shown below, the Yahoo! Local entry for Landmark Chevrolet (Houston, TX) provides contact information, hours of operation, map, photographs, and ratings/reviews.  Thus, anyone looking for any information about the dealer will probably see the ratings/reviews.  If there’s only one or two, so be it.  As it turns out, eight of the top 20 dealers had at least five reviews, while five dealers had no reviews at all.  Yahoo!’s reviews functionality has been around for over three years, so it’s clear that dealer ratings haven’t taken off here, either.



In general, ratings have evolved as useful, though still supplementary offerings that support a site’s main goals.  For instance, Amazon’s consumer-generated ratings and reviews are not its focal point – instead, they support the goal of selling products.  Epinions is an exception and thrives because it offers numerous reviews on a broad array of products. 

DealerRater, as it is positioned currently, will be continually challenged to build enough traffic to become a popular destination.  Third-party sites also have their own challenges: they attract far more traffic, giving them more chances to solicit visitors to submit a review, but these visitors may be less inclined to contribute.  Both Edmunds and Yahoo seem to suffer from this problem.  As it stands, there’s no single reliable source of consumer-generated dealer ratings/reviews.

It’s still too early to write off online dealer ratings/reviews, but the existing players have not yet made a compelling case for its usefulness to-date, either.  There’s still the opportunity for a new entrant to get involved and really own this area, but they will need to bring something new to the game or run the risk of achieving only mediocrity.

Guest Posting by Amit Aggarwal
Editor of the J.D. Power and Associates Online Automotive Review

 

[Mico Silver]

Maybe it's more of a local thing, but try Yelp.com. Here in San Francisco it started with restaurants, but spred to all kinds of businesses, including car dealers. Our dealership has over 130 reviews combined (they also have a name problem, we have more than two). Customers read these reviews and base their decisions on them. Also there is a "cold war" going on between auto chops, dealers and others - we have found evidence that other dealers are sabbotaging our ratings by posting multiple bogus negative reviews, and it is hard to take them off.

 

[CS]

the difference between dealership ratings and amazon, epinions, etc is what is being reviewed. i could find thousands of reviews on an acura but none on the guy who sold me the acura.

there arent a lot of people reviewing dealers because there isn't a lot of interest in reading reviews of dealerships. most people think all dealers lie and cheat, there's no best product just the least of all the evils.

the car shopping experience is about which car. it doesn't matter who has the car, if you want it you are going to find it wherever it may be. a sect of the buying public may be loyal to a specific dealer, but the majority shops for the product and not the seller.

 

[Jeff Kershner]

Micro, you're right about Yelp. The site is growing 2 fold but the business listings for dealers are a mess!

 

[Matt Lamoureux]

Knowing that Acton Toyota conducts business ethically, and tired of being stereotyped alongside other not so ethical dealers, Acton Toyota began requesting that sold customers please share their experiences online at DealerRater.com. Before long, hundreds of Acton Toyota consumers were sharing their very positive experiences. The dealership was then able to leverage this 3rd party consumer generated DealerRater.com content to radically increase market share. To illustrate, Acton Toyota’s Internet department was delivering 35 - 40 new and used vehicles per month on the day I began as their Director of Internet Business Development. Today that very same Internet department is delivering 140 - 160 new and used vehicles per month. Is this not a compelling case for usefulness to-date?

By the way, since Acton Toyota began receiving leads from DealerRater.com, the store has closed an astounding 41 percent. As it turns out, after people read what a great dealership Acton Toyota is, they then proceed to submit inquiries right there on the DealerRater.com review page (in many cases having already made up their minds as to where they will be conducting business...at Acton Toyota).

Am I missing something?

 

[CS]

@Matt

i don't think you're missing anything if you've found a way to motivate the customer base. there's no better way to reinforce a brand name in a local space.

i would ask if you've been able to port this success to another medium. if you've done it on dealerrater what's stopping you from switching the website for a few months and swamping angieslist.com? i can't view the mass chapter, so maybe you've done so. same thing goes for yelp and other sites, too.

 

[Alex Snyder (blog)]

Like CS said earlier, people prefer to review the product - especially the product they just bought. People care where they buy from, but I think loyalty is more to a brand than a retailing outlet these days. If Edmunds, DealerRater, or Yahoo had access to our sold DMS records, then they could contact our sold customers to solicit their reviews.

I like looking at the Newegg, Zappos, or Amazon models for reviews. They ask the consumer to rate the product, and then you can read mentions about the retail outlet's customer service amongst the product reviews. I just based a decision on two pairs of arctic boots on Zappos last night through this kind of system - it works. In fact, I wasn't even going to buy from Zappos, but the reviews pushed me over the edge.

Yep, this is definitely the route I'm going.

 

[Chip Grueter]

I'm a HUGE fan of NewEgg - pricing, selection, user reviews. I don't think I've been steered wrong by the reviews on that site - even with the more obscure things I need to buy.

Off topic
Speaking of NewEgg and other online retailers, one of the great resources of yesteryear was resellerratings.com, which seems to have transitioned from providing ratings abour sellers to providing information about products. Maybe they saw the same trend Alex saw, but it's a shame because their homepage really has buried the store ratings feature.

On topic
We have the ability to integrate with DMS systems, however it brings up the problem of trust with the consumer. The consumer has already created a relationship with a particular dealership, either through a sales or service visit. An email coming directly from their sales or service advisor has a much better chance of being acted on, than one coming from a third party that the user has no existing relationship with yet. I think most CRM's can be setup to automatically send out this email a few days after their visit - and the key here is to have the dealer link not to their review page on a rating site, but directly to where the customer can ADD a review. No distractions, just results.

This was a tip we received from one of our Certified dealers, and they just received their 400th review.

Chip-

 

[Fran]

Don't forget eBay, one of the best examples of integrating seller reviews with online shopping. It's not that dealer reviews aren't useful, it's that no site has quite done it right. Getting a good volume of reveiws is key to making it valuable, as pointed out, which is why eBay's model has worked. It's not required, but it's an unwritten rule that for every transaction you rate the buyer and the seller. And you rarely run into the mistake of rating the wrong seller or having multiple names for one seller.

Also, since people purchase cars much less frequently than they go out to eat or travel (the core of sites like Yelp or epinions), it's hard to get hundreds of reviews in a short amount of time. I still think the industry needs to prepare itself for reviews to gain a foothold and start thinking about how they will handle what is written about them online. I think dealer reviews are still in their infancy right now, and as you said, there's ample opportunity for a big player like eBay to do it right.

 

[Bill_Playford]

I tend to agree with CS. I am almost at the point where I go to Amazon to get advice on everything short of groceries. It’s great because you get an unbiased opinion, and you can see how a couple hundred people feel about a certain item. Unfortunately, there are way too many variables involved in purchasing a vehicle (from tough trade negotiations, to service writers telling dirty jokes behind the building). If everything goes well, the salesperson is just doing their job. If something goes awry, it’s time to go to DealerRater.com.

Back in my retail days, I would send a personal email to my customers a day or two after delivery, just to ask how everything went. If everything went well, I’d ask if we could share their response as a testimonial. We created a page on our site that listed the testimonials. If there was an issue with a customer being on the fence, we’d direct them to the testimonial page. It’s handy to have 80 positive testimonials to offset a couple negative postings on RipoffReport (etc).