Digital Dealer - January 2020 - 14

DEALER OPS & LEADERSHIP

Reputation & Loyalty

By
Erik Nachbahr, CISSP
President & Founder,
Helion Technologies

What's Your Dealership's
Reputation Worth?

There's an old saying, "Rep-

utation is everything." In the car
business, this couldn't be truer.
Historically, car dealerships have
battled with negative consumer
perceptions and high levels of distrust.
However, things have changed in recent
years. According to Reputation.com's
2019 Automotive Reputation Report, auto
dealerships receive better customer sentiment and higher reputation scores than
many other major industries. The average
reputation score for the auto industry was
607, compared to 401 for healthcare, 552
for retail, and 367 for finance.
This tells me that most auto dealers are
working hard to build customer trust and
provide better customer experiences. But
there's one critical area that many dealers
overlook when it comes to managing their
reputations: the integrity of their information technology (IT) infrastructure.

Why Reputation Is Important
According to the Reputation.com report,
there's a strong correlation between reputation and sales. For every 30-to 40-point
increase in an auto dealership's reputation
score, there was a one percent increase in
sales. Additionally, there's a 10+ percent
difference in sales volume between dealerships that effectively manage their reputations compared with those that don't.
Companies with good reputations also
have an easier time recruiting new employees and are generally assessed at higher
market values compared to companies
with poor reputations.
Between social media and online
reviews, dealers know it's important to
be diligent about monitoring their online
reputations. An estimated 95 percent of
vehicle buyers use digital sources to conduct car-buying research, and 91 percent of
consumers trust online reviews as much as
personal recommendations.
Imagine if a car shopper saw reviews and

[ d i g i t a l d e a l e r. c o m ]

" According to the Reputation.com
report, there's a strong correlation between
reputation and sales.
"
social media postings from your customers, complaining that their personal and
financial information was compromised
because your dealership suffered a data
breach. The damage would be immediate
and long-lasting.
Today, one of the greatest threats to a
dealership's reputation is the threat of a
cyberattack. Yet most auto dealerships are
inadequately managing this risk.

How Cyberattacks Destroy
Reputations
One thing is certain: a data breach is a

public relations and financial disaster.
Yet, many dealerships still believe it
won't happen to them.
Unfortunately, cybercrime is on the
rise, and it's not a matter of if, but when
your dealership will be attacked. In 2018,
67 percent of small- and medium-sized
businesses (SMBs) reported a data breach
in the last 12 months.
It's well documented that data breaches made public cause an immediate drop
in sales, as well as media and consumer outrage. For example, after Target
was breached in late 2013, sales fell 46

January 2020

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Digital Dealer - January 2020

Table of Contents for the Digital Edition of Digital Dealer - January 2020