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IHS Automotive Provides Proof that Positive Consumer Reviews Drive Business

This leading car-dealer-review website and automotive reputation management pioneer obtained credible data proving that high star ratings in its Certified Dealer Program (indicating customer satisfaction) translate into sales volume increases and underscore the importance of a strong online reputation.

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Challenge

Quantifying the value of the Certified Dealer Program and customer satisfaction on vehicle sales

Solution

IHS Automotive, driven by Polk – Sales Performance Evaluation

Results

Proved the value of positive reviews and DealerRater’s Certified Dealer Program:

  • Customer satisfaction (high star ratings) leads to sales
  • Certified Dealer Program participation drives sales volume increases
  • A strong online reputation is critical to a dealer’s success

IHS Provides Proof that Consumer Reviews Drive Business

For automotive dealers that want to succeed in today’s marketplace, an online reputation management strategy is a necessity. DealerRater, the leading car dealer review website and automotive reputation management pioneer, has helped thousands of dealers monitor, manage and improve their online reputations by offering a Certified Dealer Program that includes a comprehensive web-based toolkit.

Central to DealerRater’s reputation management system is the industry’s largest organic database of consumer ratings. Consumers can search to see how specific dealers rate in terms of customer service, quality of work and other factors that contribute to the overall experience. Every 55 seconds, a consumer in the U.S. visits DealerRater.com to share his or her experience with a specific dealership using a five-star rating system.

Based on anecdotal dealer feedback, the management team at DealerRater knew that high star ratings (indicating strong customer satisfaction) were translating into higher sales for well-rated dealers, but they didn’t have a way to prove it. That’s why Jamie Oldershaw, DealerRater’s Senior Vice President of Operations, turned to IHS Automotive to provide credible, third-party data to quantify the connection between high star ratings, vehicle sales and dealers’ usage of DealerRater’s review monitoring and content marketing tools, high star ratings and vehicle sales.

Taking it a Step Further with Credible Sales Data

More than one-quarter of U.S. franchised dealers are certified by DealerRater, indicating that they have gone through best practices training and are committed to maintaining high levels of customer service. The Certified Dealer Program provides dealers with tools to maintain a strong online reputation, including employee-specific review pages; a two-week negative review reconciliation period; positive review feeds to the dealership’s website and Facebook fan page, and general tips about online reputation management. Dealers choose between two certified levels: basic and 360Certified™, with the latter providing full social and reputation monitoring across the entire Internet.

As dealers have become increasingly savvy about the value of their online reputation, they have come to rely on DealerRater reviews as a critical point of connection with potential customers. In addition to having more consumer reviews of automotive dealerships than any other website, DealerRater puts each review through a comprehensive filtering process to eliminate fraudulent postings.

Over the years, certified dealers have often remarked on a direct correlation between their positive reviews on DealerRater and traffic to both their website and showroom. To further investigate this relationship using measurable data, Jamie engaged IHS to quantify the impact of a positive online reputation on dealership vehicle sales. Since DealerRater’s business focuses on empowering dealerships to build and leverage a positive online reputation, Jamie wanted to work with a company with a strong reputation for providing credible, third-party automotive industry data and analysis. DealerRater provided IHS with comprehensive information about each dealer in its database, including whether or not the dealer was a certified dealer; average star ratings; the number of negative and positive reviews; and an indicator of how fully each dealer was using the available online reputation management tools. Experienced IHS analysts looked at the data from multiple perspectives to determine how to best quantify the link to vehicle sales. For example, IHS looked at certified vs. non-certified dealers, basic vs. 360Certified™ program enrollment, high vs. low average star ratings and how extensively certified dealers were using the program tools. IHS then matched the appropriate DealerRater data to its proprietary vehicle registration data – the most comprehensive in the industry – in the 31 unrestricted states where dealer-specific registration data is available.

We instinctively knew that reviews drive business, but we had no way to finally prove it until we started working with IHS and saw the data.

Jamie Oldershaw,
Senior Vice President of Operations, DealerRater

For both certified and non-certified dealers, the IHS team compared year-over-year sales volume trends from January through September 2012 vs. the same time period in 2011 and correlated sales volume increases to average star ratings. For certified dealers, IHS looked at both the shorter- and longer term impacts of the Certified Dealer Program by comparing sales, star ratings and usage levels of DealerRater’s reputation management tools for each dealer for two time periods: six months before/after and twelve months before/after becoming certified. IHS also brought in some general market data as an additional point of comparison.

Positive Reviews Drive Vehicle Sales

Based on its industry-leading registration data and extensive experience analyzing automotive industry data, IHS was able to help DealerRater prove the value of building and maintaining a strong online reputation.

Specifically, IHS quantified the direct impact of higher average sales ratings and Certified Dealer Program participation on driving increased vehicle sales. Key points validated by IHS analysis include:

  • Higher average star ratings lead to increased sales: Dealers with average star ratings of 4 or higher (on a five-point scale) experienced a 21 percent higher year-over-year sales increase than dealers rated 2 or below. (See Figure 1).
  • Participation in DealerRater’s Certified Dealer Program drives sales volume increases at dealerships: Six months after becoming certified, dealers experienced a 5 percent sales increase compared to the six months prior to joining the program. As they further built a positive online presence by using DealerRater’s tools, their sales volumes increased by 8 percent after one year. In other words, the average certified dealer sold six more cars per month in the 12 months after joining the program. (See Figure 2)
  • Certified dealers outperform non-certified dealers: Dealers who had been certified for at least one year had a 23 percent higher year-over-year sales volume increase than non-certified dealers.
  • Being 360Certified™ provides additional value: 360Certified™ dealers who were fully using DealerRater’s online reputation management tools saw even higher sales increases when comparing performance before and after becoming certified. Sales rose by 11 percent over six months and 19 percent over one year. (See Figure 2.) Additionally, 360Certified™ dealers experienced a nearly 50 percent greater sales volume increase compared to non-certified dealers.
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