What’s In A Name? How Your Brand And Reputation Affect Your Auto Dealership’s Value

December 29, 2021

Your dealership’s value is largely dependent on the reputation it has earned in its community. This reputation is built upon a variety of factors, but the primary among them is customer satisfaction. When carefully cultivated and managed, high levels of customer satisfaction can propel your business to greater success in the marketplace.

Think of how often you have gone to a restaurant, retail store, or hotel, based on the recommendation of someone you trust. Now think of the places that you avoided because one of those trusted sources had a bad experience and warned you off. Studies have shown that around half of all decisions to try a new brand, product, or service are made through these types of recommendations.

Maintaining your reputation can make or break your business

Your dealership’s reputation is created through a similar process. It is formed, piece by piece, by the quality of the experiences of your existing customers, who will communicate these experiences in detail, both good and bad, to their friends, their relatives, and the readers of their online reviews. And let’s not forget how important CSI scores are to the OEMs whose products you are selling, with bonuses for doing well and penalties for those who don’t.

Your brand is your reputation, and vice versa

The vehicles that you sell benefit from branding campaigns run by the manufacturers that produce them. Those branding efforts can make the vehicles themselves desirable to consumers, but it is your dealership’s brand that attracts those buyers to your store to buy them.

That brand is created largely through your reputation — the better that reputation, the stronger the attraction that draws potential buyers in. Nothing attracts customers more than the promise of an outstanding sales, service, and ownership experience. Perhaps the most important aspect there is trust, which ranks even higher than a good price for many customers.

All of this reputation comes at no marketing expense. It’s just good business practice. The healthy combination of reputation and revenue will be very appealing to a potential buyer.

Your customers are your greatest billboards

You can spend a fortune on advertising, telling the world how great you are. But the most powerful endorsements come from your customers. Why? Because your customers have more credibility than anyone else with their families, friends, and coworkers.

What does it take to satisfy your customers? While different people will have varying definitions of customer satisfaction, it usually comes down to how they feel at every touchpoint they have with the people who represent your dealership. Bad service is all too easy to find in this world, which means even a small gesture can stand out. Everyone at your dealership who comes into contact with a customer should provide them with an experience that leaves them saying “wow” because they’re not used to being treated that well in other situations.

Whether it is the person who answers the phone, a sales associate, or a service advisor, it is imperative that the customer be impressed by the service they receive, every step of the way. This consistently high level of service across your entire team reinforces your dealership’s brand and its values. When your customers experience this unified voice and experience that your brand represents, they will be impressed and will spread the word.

Great Reputation → Top Online Reviews → Increased Buyer Interest

Today we have to also add the effect of your online reputation. Between social media platforms and review sites like Google or Yelp, your customers have easy access to the megaphone of the internet to air both their satisfaction and their grievances.

A vehicle is one of the most important purchases a person makes every several years, so your customers are, on average, there’s a good chance that they’ll leave a review. It’s been shown that if you follow a great sales experience with a small token of appreciation — like a full tank of gas, or a free car detailing kit — customers are far more likely to reciprocate with a 5-star review, especially if you encourage them to do so.

Potential dealership buyers will definitely check your online reputation before beginning any type of negotiation, and it will affect their decision making. Anyone in the business knows that bad reviews happen from time to time, but if you can keep them to a minimum and stay close to the 4-5 star range on important review platforms, you’ll be in good shape as you enter the automotive M&A market.

Improve your brand, improve your value

The result of this process of wowing your customers will translate into great word of mouth as well as excellent online reviews, enhancing your dealership’s brand. It will also translate to high CSI scores, which will directly translate into financial benefits, both for you and for whoever may want to purchase your dealership.

A good place to start on this process is with good communication skills from every member of your staff. This can include:

  1. Speaking in a calm, friendly, engaged tone of voice
  2. Providing correct answers to common customer questions
  3. Not promising more than you can deliver
  4. Paying complete attention and listening to exactly what the customer is saying
  5. Being polite at all times
  6. Watching for non-verbal cues
  7. Recapping what the customer says to be sure you are hearing them correctly

The ripple effects of strong branding efforts

Just as a small stone thrown into a pond creates ripples that expand in size as they radiate, your brand-related activities can expand your dealership’s reach and influence. Once you have established a strong and consistent brand identity within your organization, you can let the rest of your world know about it. There are several aspects to this process:

  1. Brand design (your name, logo, colors, graphics, style guide)
  2. Brand message and storytelling
  3. Value proposition
  4. An easy-to-use, great-looking website
  5. Presence on social media and review sites
  6. Responding to all reviews and comments, whether positive or negative

The ripple effects of your dealership’s branding can have a powerful effect, generating unstoppable momentum for your business that only increases over time. It all adds up to solid profitability provided by large numbers of satisfied customers, which will add significantly to the valuation that potential buyers will place on your dealership, earning you a higher price.

At the Dave Cantin Group, we respect your brand and what it stands for

Our team at DCG Acquisitions is prepared to help any dealership owner who’s looking to leverage their brand to buy or sell one or more dealerships. At DCG Capital, our team is ready to guide any dealership in finding the right seller or buyer for its present and future needs.

Contact us to discuss your plans. We’re here with resources for dealership sales, acquisitions, and growth — to help expand and secure your legacy.