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