Steve Roennau
Vice President
Compliance
EFG Companies
Over the last few years, dealers have been working hard to establish a positive online presence beyond just their website. It’s become standard practice for dealerships to be listed on websites like DealerRater, Cars.com, Edmunds.com, Yelp, and Google. The reason behind these listings is to build trust online and develop a brand presence.
After all, according to Autotrader’s Car Buyer Journey study, 60 percent of the time spent in the car buying process is in online research, with 78 percent using third-party sites or apps during the car buying process. Now, you’re probably asking yourself, what does this have to do with compliance?
In this highly integrated world of online reviews and social media, it can be tempting for dealerships to use cookie cutter, online review vendors to boost positive reviews while minimizing negative reviews. For example, one widely used tactic is asking customers to leave a review while in the dealership, on a device provided by their sales or finance manager, which puts extra pressure on the customer to leave a positive review.
Another tactic that has been used across all industries includes using contract provisions, including online terms and conditions, to penalize consumers for posting negative reviews or complaints. This specific tactic has been ruled as illegal under the Consumer Review Fairness Act (CRFA), which protects people’s ability to share in any forum their honest opinions about a business. Specifically, the CFRA makes it illegal for a company to use a contract provision that:
- bars or restricts the ability of a person to review a company’s products, services or conduct;
- imposes a penalty or fee against someone for leaving a review; and that
- takes ownership of a person’s review when they mention the company’s name, thereby requiring people to give up their intellectual property rights of the content in the review.
The Federal Trade Commission and the state Attorneys General have the authority to enforce the CRFA. Any violation will be treated the same as violating FTC rules around unfair or deceptive acts or practices, meaning companies everywhere could be subject to financial penalties.
So, what do dealers need to do to ensure compliance? Start by reviewing your contracts. Work with your vendors to remove any provision that restricts people from sharing their reviews and/or penalizes them for doing so. Beyond contract work, it’s best to take a common sense approach to consumer reviews.
Think about your own experiences researching a product or service online. When looking at reviews, you can probably tell which reviews are fake. And, if a service has only positive reviews and no negative reviews, you probably find that a little hard to believe. The brands you are more likely to trust are the ones with a mix of positive and negative reviews, and who follow up with all reviews to thank them and resolve any issues. That is the approach you need to take with your own business.
Think of it in three simple steps:
- Rather than trying to force a positive review, let customers think on their experience so they can give you an honest review that resonates more with your customer base.
- Stay active in monitoring review and social media sites to respond to reviews in a timely manner.
- Respond to all reviews, thanking consumers for positive reviews, and reaching out to those who posted negative reviews to resolve any questions or concerns.
The key with negative reviews is to demonstrate a willingness to work with the customer, and to take the conversation offline. After a negative review is resolved, you can always ask the customer to update their initial review.
The goal is to build consumer advocates. By remaining consistent and active in your response to all reviews, it is possible to direct the conversation rather than react to it.
With more than 40 years of consumer insights and a dedicated NAF- and AFIP-certified Vice President of Compliance, EFG Companies can help you take a compliant approach to online reputation that generates a positive online brand experience. If you are ready to direct the conversation, contact us today.