Published in the September 2019 edition of Auto Retail Profit (Issue: 52)
Author: Michael McVeigh – Chief Operating Officer, AutoProtect
Within the motor retail sector, many of us, either directly or as part of the supply chain, are affected by the broader perception of the car market and car dealers.
We all know the typical perception and some research backs this up:
- Only 7% of UK consumers trust used car dealers1
- Car salespeople rank as the third least trusted people in business2
On the other hand, the most recent NFDA customer survey suggested that 83% of customers were satisfied with their latest experience with franchised dealers3. It’s a tough challenge for retailers, especially when the vast majority of customers do leave their dealer very happy as the latest NFDA date indicates.
At the heart of the challenge is trust; it is without doubt that this should be one of your most valuable assets. Like other assets such as people and premises, you have to invest in it. Reviews are at the heart of trust-building and investing in them and the customer experience makes sense.
Vehicle reviews, such as those published by Which? Magazine, provide motor retailers with ‘golden nuggets’ of marketing insight that can help them to buy stock and sell cars more effectively.
- According to a survey of 2,202 individuals, 60% said that poor reception by reviewers would dissuade them from buying a particular vehicle, more than any other reason surveyed
- 96% of people are influenced by reviews to some extent
- 9 out of 10 people trust online reviews as much as personal recommendations
- 7 out of 10 people say that reviews help them to decide to purchase a product
Price is Not Everything
Car retailing has embraced an unhealthy and arguably unsustainable focus on price. This has been driven by online aggregators where top default ranking (sponsored suppliers apart) has been given over to the lowest price. To achieve that status, dealers have had to rely upon driving up income from other areas, such as F&I. The FCA scrutiny of both finance and general insurance and the forthcoming SM&CR regime, mean that the profit push pendulum may well swing towards the metal and reviews
I hope the aggregators take note of how hotel aggregation sites operate; their default ranking is commonly for the highest customer-rated hotel. Now, that would be a positive for the motor retail trade. It would:
- Move customer buying from price and towards quality
- Support a greater dealer focus on the customer
- Support FCA compliance
- Improve the perception of the market.
To close, reviews matter and they can impact sales and profitability. They differentiate a business and make it easier for customers to make positive buying choices; both for their car and dealer.
5 Challenges & Tips
- Well reviewed products can retail up to 200% more effectively4– should reviews form part of your stock buying strategy?
- Displaying customer reviews can increase customer conversion by 13.5%4
- If 76% of people are influenced by star ratings4 – how many stars is your dealership achieving?
- Positive reviews are great for SEO – and with many car buyers still purchasing locally, reviews support local SEO to help your business to rank higher on search engine results pages in your location.
- Piggy-back great supplier reviews – our rating is 8.9/10 – from 4,192 reviews on Trustpilot, might that help your sale of added value services?
Sources:
- https://www.verdict.co.uk/motor-finance-online/news/auto-trader-93-of-uk-consumers-distrust-used-car-dealers-5005361/
- https://uk.finance.yahoo.com/news/survey-reveals-10-least-and-most-trusted-professions-in-the-uk-050000754.html
- https://www.nfda-uk.co.uk/reports/consumer-attitude-survey/2019/spring
- https://www.feefo.com/business/gb_en/resources/blog/infographic-7-reasons-why-reviews-are-important-to-your-business