Dealership Marketing

5 Reasons Why Online Reviews Directly Impact Your Dealership’s Bottom Line

It’s getting harder and harder for car dealerships to stand out among a crowded field of competition. Because the auto industry operates in what is a nearly perfectly competitive market, meaning dealers sell essentially the same products at similar price points, dealerships are starting to turn to their online reputation to help differentiate them from other dealers.

Today’s car buyer is savvy and is spending much, if not all of the car buying process online before ever even stepping onto your showroom floor (you know this). This starts out with them trying to find the right vehicle. Once they have decided which make and model they want to buy, they start zeroing in on which dealership to choose. That’s when your online reputation comes into play. Over the course of the rest of this post we will discuss five ways that online reviews help you business get found, get chosen, and ultimately drive new business.

  1. Increase visibility online

Online reviews are one of the most important factors that determine where business rank in Google’s local search algorithm. It’s hard to know exactly what goes into Google’s algorithm, but they have indicated that the recency, frequency, quality, and quantity of your reviews have a significant impact.

First, let’s talk about recency. Research has found that 77 percent of consumers don’t trust online reviews that are older than three months with 18 percent of consumers not trusting reviews older than two weeks. What that should mean to is that collecting online reviews should be an ongoing process.

Many dealers that I have interacted with will make pushes a couple of times a year to collect a large number of reviews. This usually happens when they get a negative review they want to bury, but consumers will notice when things like that happens, which brings us to frequency. Your dealership should be trying every day to get new reviews. Your experience is going to change over time so you want to make sure your online reputation is representative of actual experiences.

When it comes to quality, you want to make sure that you have both a good overall star rating as well as quality content in your reviews. One way to ensure that the quality of your reviews increases is by asking your customer to review a specific aspect of your business. This will help them write a more thoughtful review of your business. Finally, when it comes to quantity of reviews, I’ll keep it simple. More reviews is always better.

  1. Increase walk in traffic

In the early days of Podium, we had a customer call us up and tell us they wanted to pause their service. This was upsetting because from our vantage point, it looked like we were delivering results. We dug a little deeper to find out the answer to why he needed to pause his account was that he had over 140 new walkins the last month, many, not all, citing the reason they came in was because of the business’ good reviews.

Because of that, he needed to take some time to rethink process and potentially hire new employees to handle the increased business. I can’t guarantee that collecting reviews will have that much of an impact on your walk in business, but time and again I’ve seen it have a positive effect on new business and general customer sentiment in the dealer’s local market.

  1. Influence purchase decisions

This reason is probably the most important reason. Online reviews have a direct impact on purchase decisions. According to a survey of 2,000 US consumers conducted by Podium, 93 percent of consumers say online reviews have a direct impact on their purchase decisions and 82 percent said the content of a review has convinced them to make a purchase.

Additionally, a vast majority of consumers said they trust online reviews as much as recommendations from family and friends. It’s not enough anymore to focus just on traditional advertising and marketing channels. You need to pair those efforts with a strong digital marketing presence and online reputation strategy.

  1. Give you insights into what your customers care about

Online reviews contain a treasure trove of information. They tell you about what your customers care about most as it relates to your business. This information can certainly be valuable in helping you increase efficiency in your paid search spend.

There are a number of tools available that will help you better understand the content and sentiment of your reviews. This will let you know if there are specific trends in your business that you need to improve upon or reinforce previous decisions that you made.

  1. Improve business operations

Finally, online reviews can help you improve your business operations, which will improve customer satisfaction and increase loyalty. These aren’t always huge revelations, but can be small things that make all the difference. For example, I recently spoke with an auto services shop that had a couple of reviews mention that the shop seemed messy and had tires strewn all around.

This wasn’t because the employees were lazy, but rather that they were focused on getting customers in and out of the shop as efficiently as possible. As a result, sometimes when deliveries of new tires were made, they weren’t always immediately put away, which caused the mess. After receiving that feedback from customers, the owner of the shop made it policy to put tires away as soon as they were delivered. Since then, they haven’t had negative reviews that mentioned the messiness of the shop.

All-in-all, the importance of focusing on review recency, frequency, quality and quantity as part of a larger marketing strategy is increasing. Google has increased the weight of ratings and reviews in its local search ranking algorithm by more than 20% in the last 12 months, and has also shown preference for highly rated local businesses in its results, filtering out businesses with ratings below a 4.0. Having a strategy and sticking to it over time is the key to success.