Third-party shopping site Cars.com will acquire DealerRater, a platform where consumers can write reviews about salespeople, dealerships and service shops, the companies said today.
With the acquisition, Cars.com says it will have the largest dealer review platform in the industry, with more than 4 million consumer-submitted reviews.
“Online reviews are becoming more critical than ever in all shopping categories, but even more so in the auto category,” Cars.com CEO Alex Vetter told Automotive News. “[Consumers] trust reviews as much as they do their family and friends.”
This is Cars.com’s first major acquisition under its new ownership structure, following the company’s sale in 2014 to Tegna Inc. of McLean, Va.
2.5 million reviews
DealerRater, formed in 2002, has compiled more than 2.5 million sales reviews across 41,000 U.S. and Canadian dealerships. Over 14 million consumers access DealerRater content across the web each month.
Cars.com, launched in 1998, has its own, though smaller, database of dealership reviews, which it launched in 2011. Cars.com hosts millions of new and used vehicle listings along with price tools and editorial content.
The transaction is subject to regulatory approval and customary closing conditions. It is expected to close by the end of August.
Terms of the deal were not disclosed. Other companies were interested in acquiring DealerRater, but Vetter declined to identify them.
Online consumer reviews, even in digital form, are word-of-mouth marketing. Vetter said word of mouth is one of the oldest forms of marketing and probably the most cost-efficient.
One of the pain points for dealers, Vetter said, is keeping track of reviews across dozens of websites. He said this acquisition could lessen that burden.
“By consolidating the industry with the two largest players, now it’s one less thing that local dealers have to worry about. Soon after the transaction, when they collect their review, they’ll be able to disseminate that review across a much wider portfolio of properties,” Vetter said. “That syndication model will help local dealers improve the efficiency of collecting reviews.”
Vetter said Cars.com will be able to help dealers monitor their reviews across different websites and alert them when reviews are negative.
The integration between the sites will happen soon after the deal closes. Vetter said Cars.com reviews will also flow into DealerRater, which will continue to exist as a separate website.
Consumer reviews of dealerships appear on sites such as Yelp and Google. Besides DealerRater and Cars.com, industry-specific review sites include Edmunds.com.
DealerRater CEO Gary Tucker told Automotive News that he will remain with the company after the acquisition. DealerRater will retain its name.
According to a study from marketing company Digital Airstrike, 79 percent of car buyers and 68 percent of service customers say review sites are among the most helpful tools when choosing a dealership.
DealerRater’s platform goes beyond the traditional store review.
Before shoppers step foot in stores, they can see how individual sales staffers have been rated and reviewed by past customers. This allows consumers to match themselves up to the right salesperson.
DealerRater released its CustomerConnect tool in April to help potential buyers get in touch with the best-reviewed staffers. The company says CustomerConnect allows stores to highlight their top employees on DealerRater search directories and vehicle detail pages, while helping them connect directly with in-market buyers through SMS texting, email, and click-to-call dialing.
Customer reviews can strengthen a dealership’s digital marketing strategy.
“Dealers are spending a tremendous amount of money on [search engine marketing]. Reviews are one of the key index criteria” for Google-oriented search engine optimization, Vetter said. “As dealers look to find more efficient ways to grow their search engine marketing, we know a solid review strategy where you’re collecting content from your users is a great tactic to increase your marketing performance.”
Tucker said Cars.com and DealerRater have a “strong strategic alignment.”
“We are happy to be joining Cars.com and are proud to share a similar foundation,” Tucker said in a statement. “DealerRater is uniquely positioned to lead the industry transition to finding not only the right dealer, but connecting consumers with the right person at the right dealer.”