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News   March 11, 2016   by Steve Pawlett

Online Ratings Influence Consumer Car Buying Habits


 

With the spring selling season about to kick into gear, it’s an opportune time to take a look at the vehicle consideration and shopping habits of Canadians.

The J.D. Power Analysis of the 2015 Canadian Avoider Study finds certain trends pertaining to the reasons potential customers elect to avoid certain models or brands altogether. In short, those reasons are becoming increasingly endorsement-based, especially among younger buyers.

In fact, among younger shoppers (18-34) an average of 39% said that unfavorable online ratings, a manufacturer’s poor reputation or the past experience of friends and family influenced their decision not to shop a brand, compared with only 25% of those older than 55.

While the impact of online reviews is particularly strong among younger buyers (38%), it’s also worth noting that it’s actually the No. 1 influencer among all ages, with 31% citing it as a reason they avoided a brand, compared with 20% for printed publications, 19% for personal poor experience or 30% for overall poor manufacturer reputation.

Compounding the impact of online reviews – particularly those hosted by independent third parties — is their widespread use as a primary research tool across a majority of shoppers. Overall, 61% of shoppers said they accessed reviews on a third party site, compared with only 38% who accessed similar content on a manufacturer’s site.

What’s more, the popularization of online review and rating services has worked its way downstream to in-store behavior as well.

Among shoppers aged 18-34 who accessed online content while shopping at a dealership, 25% indicated they were looking at dealer reviews and ratings, and 25% also said they were looking at vehicle reviews and ratings.

So how can dealers in particular maximize their online reputations? It starts with offering a superior customer experience.

On average, customers will positively recommend the dealer from whom they purchased their vehicle six times, with younger buyers being slightly more likely to recommend (6.2 times), versus those older than 55 (5.2 times).

However, those numbers can be improved when dealers offer an outstanding experience. Among owners who received a truly outstanding sales experience (10 points on a 10 point scale) recommendations rise to an average of eight positive comments.

Further, it’s the younger buyers whose willingness to recommend is most influenced by positive experiences, going to 8.8 recommendations from the aforementioned 6.2.

Of course, the flip-side to the brand promoter coin is an important lesson as well, given current reliance endorsement-based influences. Customers who had a negative purchase experience made an average of 7.4 negative recommendations, with those youngest buyers dolling out 9.7 detracting comments.