The Impact of Social and Reputation Management
Steve Pearson is the CEO at Friendemic, a company that specializes in online reputation tools for car dealers and automotive brands. Before joining Friendemic, Steve spent several years working in the digital space. At McKinsey and Company in Silicon Valley, he consulted with some of the largest players in the industry and focused on process changes to improve customer experience.
Steve also spent time at Vector Capital in San Francisco and most recently, he was part of the Channel Sales group at Google, helping small and medium-sized businesses access and profit from digital marketing. He holds a Bachelor of Arts degree in Economics from Brigham Young University and a Master's of Business Administration from Harvard Business School.
Here’s a glimpse of what you’ll learn:
Why Friendemic was founded and the services it provides.
Steve’s thoughts on dealership marketing with TikTok
How dealerships can build an online reputation through Friendemic and social media.
How responding to customer reviews and feedback increases your brand's SEO efforts
Steve explains why negative reviews are on a downward trend
How increased interest in social media during COVID-19 has impacted Friendemic's business
How Steve's background influenced his automotive career
In this episode…
For any car dealership to attract more customers and increase sales, it's important to use the right lead generation strategies. Some of the platforms that dealers use to market their business include their own company websites as well as other sites like Google My Business, Yelp, Car.com, and social media sites like Instagram and Facebook.
Using platforms like these allows customers to leave reviews after purchasing from a car dealer, although there may be concerns with information transparency. Enter, Friendemic. The team at Friendemic has created a model where they help customers provide reviews or feedback for products they've purchased while also ensuring that customer service and reputation is maintained.
In this week's episode of the Inside Auto Podcast, Ilana Shabtay talks to Steve Pearson, the CEO at Friendemic, about the social and reputation management impacts of car dealerships. They discuss the importance of responding to online reviews, how COVID-19 has shifted customer behavior—and consequently, Friendemic's business, and how to improve a dealer's online presence.
Resources Mentioned in this episode
Sponsor for this episode...
This episode is brought to you by AutoLeadStar, a company that helps car dealerships engage quality customers on the web and convert them into car buyers.
Co-founded by Aharon Horwitz, Yishai Goldstein, and Eliav Moshe, AutoLeadStar’s state-of-the-art software automates a dealership’s entire marketing funnel and provides around-the-clock service for dealers.
Visit their website at www.autoleadstar.com to learn more about their around-the-clock marketing service.
Welcome to Inside Auto podcast where we feature everyone and anyone you'd want to talk to in and out of the automotive industry.
Ilana Shabtay 0:14
Ilana Shabtay here host of Inside Auto podcast where we interviewed top dealers, gmms, marketers, entrepreneurs and thought leaders in and out of the automotive industry. Before we introduce today's guest, this episode is sponsored by Autoleadstar.com. Autoleadstar is pioneering marketing automation in the automotive industry with sophisticated machine learning that future proof dealerships marketing operations and replaces traditional marketing methods. Today, I'm excited to welcome Steve Pearson, Steve. So good to have you on the show.
Steve Pearson 0:48
Thanks a lot. Happy to be here.
Ilana Shabtay 0:51
Yes, we're excited. So you have a pretty impressive bio. So I'll quickly introduce you and then we'll jump right in. Steve is the CEO of Friendemic. Prior to joining the front desk team, he spent several years working in the digital space at McKinsey and Company in Silicon Valley, he consulted with some of the largest players in the industry, focusing on process changes to improve customer experience. Steve also spent time at Vector Capital in San Francisco. And most recently, Steve was part of the Channel Sales group at Google helping small and medium businesses access and profit from digital marketing is extremely impressive bio, as I said here, welcome to the show. Steve, how have you been?
Steve Pearson 1:32
Thank you. It's been an interesting time, obviously in 2020. For everyone, and certainly the automotive industry and and marketing vendors within automotive, it's been no exception for any of us. Yeah, a lot. Lots of things are changing.
Ilana Shabtay 1:45
Yes, it's been quite the ride. And you've actually put out some interesting data, specifically how things have changed recently. But before we get into that, and I do want to dive into that a ton. In today's episode, tell us a little bit about Friendemic. And how you're helping dealers stay at the cutting edge and use social and reputation to really help their dealership business.
Steve Pearson 2:06
So for endemic was founded at the end of 2010, we just celebrated our decade of existence. And it's been an amazing ride, we focus exclusively on the automotive industry, we want to provide solutions for dealerships to manage their third party sites. So we're not you know, if you're running your own website, or something you host or manage, you know, that's going to be something the dealer is going to do. But we've seen a proliferation throughout for endemic existence of sites primarily on social media and online reputation, where you know, there's a third party that's managing that site, but consumers are coming to it for information for access to the dealership, inventory, etc. And we provide the tools and services to help dealers manage those sites.
Ilana Shabtay 2:50
So what are some examples of those third party sites?
Steve Pearson 2:54
So, you know, one of the biggest ones, of course, is Google My Business, you know, their large listings, and just recently, we'll talk about this more today, I'm sure you can even have sub list things that are nested under your primary listing. But more traditionally, people think of, you know, Yelp, dealerrater, cars.com, CarGurus Edmunds on the social side, you know, Facebook, Instagram, Twitter, we see some dealers dabbling in even more obscure social sites. And, and, you know, the listing site, the classified sites, you know, Craigslist, let go offer up. So really anything where you're a dealership might have a profile and information about the dealership, but it's controlled and managed, ultimately by a third party.
Ilana Shabtay 3:44
So it's reputation management, but it's also social media management, is that is that correct?
Steve Pearson 3:49
That's right, you know, the industry has has made a little bit of a divide between those two. And for Friendemic, we think of them as two sides of the same coin. Really, ultimately, we're talking about consumers and where they might talk about a dealership. And, you know, a tweet saying, Hey, I shopped at this dealership and had a terrible experience or a one star review on Yelp saying I shopped at this dealership and had a terrible experience. You know, it's just a slight format change, but ultimately, you know, how a dealer should respond to that and manage it and think about it is very similar.
Ilana Shabtay 4:25
And so are you what how, what are your feelings towards TikTok?
Steve Pearson 4:32
It's certainly an interesting sight. We have not seen dealerships do much marketing there yet. I really don't anticipate a huge surge there from dealerships. But
Ilana Shabtay 4:44
I read something recently that dealers should be actually if they want to market to the Gen Z and millennials and they should start tech talking but who knows?
Steve Pearson 4:53
Well, we'll see. I mean, we saw very similar claims a few years ago with you Yik Yak and Snapchat and sites like that as well. And and we didn't really ever see that take off for dealerships, though I certainly agree that TikTok is in and will continue to be, for some time a strong marketing platform to reach Gen Z and millennials. I'm not sure, though for dealerships, right. Right. For manufacturers and brands, I think there's probably more of an angle. But, you know, when it comes to hyperlocal marketing to very specific local audiences, you really have to put quite an investment into a lot of these sites to gain meaningful followership. And, you know, at the hyperlocal level, I tend to think that most dealerships will see a better return focusing elsewhere but it's an interesting site and yeah, I'd love to see a dealership who's making a run at it.
Ilana Shabtay 5:50
Yeah, I'm not even familiar with Yik Yak. I've never even heard of that.
Steve Pearson 5:54
It doesn't exist anymore. It was a very trendy social network on college campuses for a year or two, and got a lot of chitter and prominence and then faded into oblivion.
Ilana Shabtay 6:07
Ah, okay, interesting. I wonder what will happen with TikTok then,
Steve Pearson 6:10
but I definitely remember conversations, you know, maybe it was 2015 or so I'd have to double check. Have you marketing experts, and even some dealerships are saying, you know, if you want to reach college kids, we got to be on Yik Yak.
Ilana Shabtay 6:25
Oh, man. All right, well, we'll see we'll have to check in in like, a half a year or so and see where Tiktok’s at with automotive, you might be
Steve Pearson 6:32
good. I certainly expect to continue to see manufacturers and large brands, maybe even some, you know, large dealership groups that have, you know, an extensive presence. But for the individual rooftop focused on you know, hyperlocal marketing? I I'd be surprised if we see huge traction. But let's check again in six months.
Ilana Shabtay 6:52
No, but that that does make sense for you. I will check again in six months. So I'm the dealerships that are using for endemic and that are successfully managing their social media and social reputation. What What do you suggest? First of all, how are they doing it? How they implemented the process? What was what's their transformation look like? And what are some of the impacts of the tools on their business? What what's that look like?
Steve Pearson 7:21
Great. Yes, so dealerships that have really invested in online reputation? You I think they come at it from a mindset that this is how dealerships today, because really, any business today needs to be listening to customers. Right? I think every manager gives lip service to the idea that we need to listen to our customers. But so many businesses don't seem to take it seriously when it comes to online listening. Right? Yeah, well, you know, pay for focus groups, and, you know, pay for big surveys. And you know, of course, anyone in the store, I'm going to listen to them. But you know, if somebody says something on social media or reputation site, that's just noise. We see this attitude too frequently. So your dealerships, really get it and see fantastic results from our platform, you they come with, with this mindset that, you know, wherever someone is talking about me, I need to be there. And so you know, they that when when a new dealership joins the Friendemic platform, we're gonna make sure that they're set up with all the right tools, so that they are getting notifications, text or email or on our platform, whenever comments are coming in about the dealership, either reviews or comments on social. And then they're going to have rigorous processes set up, either internally or with friend emic or collaborating between the two of us so that those comments all get addressed. And we've seen that model work successfully many ways. You know, some dealerships say, I want to answer every single one of those myself, we say great, they can use our platform and tools to do that. And our team is just making sure that they really do, because there's a lot of good intentions out there that don't always get followed through on. Yeah, or we also have some clients who go completely the other way who say, I want you to manage all of it, and, you know, then then provide me, you know, a breakdown of what the main comments were, but you handle the first line response in every case, and and a lot of in between, but, you know, ultimately, it's it's making sure that every single comment, every single review is read and, you know, acknowledged or addressed were broken, appropriate. And that's a super important part of running any business today. So much, you know, in a lot of industries, but certainly in automotive. There's so much more information transparency, for consumers in terms of product and pricing. You know, how do you differentiate Today's a local business, a lot of it comes down to that customer service and that reputation and so it really becomes meaningful How does that translate to the bottom line? Well, there's a lot of different ways that it flows through. But the biggest and most transparent ones are really through the things that you can track easily like clicks to your website from the sites, and clicks to call clicks for directions. You know, those are very easily trackable. And we definitely see many successful clients of ours, where you if you just run a quick search on the dealership name, or look for a new dealership, in their geography, you're that first page of Google results is 100% controlled by that dealership, right? It's their own website. And then the next nine results are all social sites and reputation sites for that dealership, and they all look good. And if you go into their Google Analytics on the back end, and you look at their own website traffic, you know, a lot of referral volume is coming from all those sites we just mentioned, we're big believers that, you know, reputation is not an end in and of itself, right? If you're not seeing results from those online reputation and social media sites that flow through to phone calls and website visits, and ultimately leads and sales, then you're doing it wrong.
Ilana Shabtay 11:15
And so then there are other implications, too, right. So it's not just about the reputation being good, and the information being accurate. But I think I read somewhere and some of the data that you've put out that if Google My Business, if you have the reviews there and you're responding to them, and you have accurate information, it actually increases your SEO. Is that accurate?
Steve Pearson 11:39
Absolutely. Yeah. So you know, Google is out there indexing your dealerships websites, but also, all these other third party sites, and how they show up is very much affected by the things you can control on them. You know, I think you're everybody knows that I have a lot of control over the SEO power of my website. But you also have a lot of SEO, you know, control over the SEO power of your Facebook page or your Google My Business listing? Yes, you don't host the site, you don't control the site entirely. But you definitely can make sure that your information your profile is completed and up to date, and the information is accurate. That's kind of step one. Most businesses, most dealerships, you know, we think have a pretty good handle on that. But Google also is has been very clear with some of the things that guide their algorithms. And recency of content is big. interactivity is big. You know, so if you have a listing on, you know, cars.com, but you haven't done any, nothing has changed on that page in three months, it probably doesn't have nearly the SEO value, it could, if you had, you know, a steady stream of recent reviews on that site, and you're replying to those reviews and having back and forth.
Steve Pearson 12:55
Oh, go ahead.
Ilana Shabtay 12:57
I was just gonna say I think that's such an important point, because dealers put such an emphasis on sem and paid advertising, but there's so much control they can have about just getting getting on the page, you know, and just organic traffic and making sure they show up when someone in their, you know, in the in the right zip code is looking for them. So I think that's a really important point as well.
Steve Pearson 13:17
Absolutely. We, you know, there's absolutely a place for paid advertising, no question. But we definitely believe that we, we see many dealers who neglect some of the less expensive opportunities sitting in front of them, where they could be getting a lot more organic traffic, and referral from these other sites, if they were, you know, managing them even just a little bit, you know, it's not a huge effort, in many cases to have a steady flow of content and reviews on these sites. Some of them are more involved than others. I mean, a really well built out Google, my business listing can be pretty expensive. But we all could dealers see hundreds of clicks to call and referrals over to their own website off those Google My Business listings every month. And there's a lot of value there and it's worth managing it properly. The other thing that comes to mind that we see a lot here, and it's frequently neglected. As I said, the paid side and managing these third party sites also reinforce each other. I can't tell you the number of times I've seen dealers who are spending 1000s of dollars advertising on CarGurus are cars.com or Edmunds or auto trader other places. And yet their dealership profile on those sites is incomplete or lackluster. And their online reputation on those sites looks terrible to know here you're paying all this money to generate leads from cars.com. And yet you have three reviews and a one star rating on cars.com. Your your click through rate on those ads is going to go down right and people click the ads because they see the ad and an attractive price. But then they see your dealership rating, and they move on.
Ilana Shabtay 15:04
I think that's also a great point and something that automotive is going to be working on for a while. It's just the whole marketing approach that I think other industries have hit that automotive is very hyper focused on what's the shiniest new thing or who you know, who gets the biggest keynote at conferences and how they can kind of suck them into certain places. But I think really having a wholesome strategy will help with that. And that's a perfect example, right? Don't advertise in place where and put 1000s of dollars into an ad where you actually have, you know, a really low rating, and you're not interacting with your, with your organic page there. I think that's, that's a extremely important point for all the dealers listening. And then on that note, when we talk about negative reviews, and you recently released a study that actually negative reviews are on a downward trend, I would love to hear about this, this data that you recently released, mostly because I would love to see that maybe the stigma of going to dealerships is actually going to be going to be dissolving a bit or disappearing, because it means that dealerships are catching up to the rest of the industries and customer experience and is such an important part of it. So tell us about that data. Tell us about that report, what you found, and I'd love to also know how the Friendemic data really influenced the report that you put out.
Steve Pearson 16:32
Yeah, so we track the online reputation of every franchise dealership in the United States. So whether their clients are for Nemec or not we do a twice a year benchmarking report where we look at dealerships, by brand by geography, across the industry. And one of the things we've noticed we've been running, doing this report since 2015, is that your dealership ratings are actually going up. And as you said, as an exciting finding for us. And we love to see it. It's, frankly, an industry that is frequently maligned. We did a blog post on this recently and actually began by citing the recent room commercial that aired with it, you make your dealerships look very bad, you know, compared to going to a dealership, like going to a circus, and the ad was titled dealership of hoarders? Yeah, but the truth is, yeah, yeah. But the data doesn't seem to bear that out. Right. It was, I think, more difficult for consumers in the past. But we're seeing an online ratings that that is changing your part of it, I think comes back to what I alluded to, before, that the internet is just, you know, democratize data and a lot of ways and so, you know, we're dealerships, I think used to negotiate much more aggressively with consumers. That's much more difficult now, right? I mean, no, almost nobody shows up to a lot today without having done it quite a bit of internet research at a time. And they've got a pretty good sense of, you know, what that vehicle should cost, if not, you know, have already negotiated a fair bit, you know, online with the salesperson ahead of time. And so, you know, feeling like you got scammed or taken advantage of, it's just not as common probably as it used to be, because that information is much more widely available. More importantly, though, I think dealerships have also realized that because of that they have to compete in the customer experience world, right. It's a lot easier to drive a town or to over and buy your car from a different dealership if if you want it to because, again, with the internet, I know if they have the vehicle I want on their lot, and it's easy to negotiate with them ahead of time. Because you know, 30 years ago, you probably just bought from your local dealer, and you're not going to drive two hours over and see if maybe the dealership across, you know, on the other side of the state has the vehicle you want or not. Right. And so dealerships are just much more sensitive to this because they're more competitive, and it shows. So what we've seen is that your the study we published recently was tracked the percentage of reviews left for dealerships that were negative, and you know, it's dropped from 16% to just under 13% over the last three years. And that has a meaningful difference in what the average star rating is for dealerships. You I think we definitely saw it accelerate in 2020 is well, the number of negative reviews, the proportion of negative reviews declining, some of that we think is COVID driven, right. I COVID has certainly been awful, right? There's no question of that. But it has had, you know, some some effects that we think have played into dealership scores, consumers, perhaps or a general just a little tighter, right. They recognize that local businesses have had a tough time. Time this and are trying very hard to adapt to very difficult situations. And we've seen so many dealerships work very hard to sanitize vehicles to train their staff to you stay open, despite government to work within government restrictions in order so that they can continue to provide essential services to their communities. And I think consumers recognize that.
Ilana Shabtay 20:25
And and you touched on because you mentioned COVID, I have to ask this, there, at least the data that we've seen, a lot of the consumer behavior has shifted to social, right, so where we used to see a lot, and we're kind of in the SEM world, so a lot of shoppers or search queries that used to be on search, we totally saw shift. A lot of people were spending more time on social and makes a lot of sense how that affected Friendemic. And the data that you've seen, because so much of your business is on social media.
Steve Pearson 20:58
Yeah, so we definitely saw a surge in interest from dealerships and our clients on making sure that they were well set up for social media. As you mentioned, consumers throughout the pandemic, we're spending more time online, we're spending a lot more time with video. And so a number of our products and offerings that help dealerships they're saw, you know, a meaningful jump in interest as they should. And so, you know, what we've seen, we've definitely seen an increase in the amount of activity on many of those dealership pages, as well and increasing results, right, the more activity is going to drive more follow through and clicks. And, you know, interestingly, I think all of us were prepared for your major drops in consumer demand for vehicles. And that has not happened. And so, you know, I think what we're seeing in social media and online reputation parallels a lot of what the industry has been talking about in your shift to digital retail, you know, just that much more of the overall process is shifting online. And, and some of that is going to be directly in, you know, straight digital retail to purchase. But a lot of that research now is happening a lot more that research now is even happening online, lots of it was online before, I think what we saw in a typical journey before was, you know, researching sites, researching models, spending a lot of time reading your reviews, and maybe even watching some videos of of vehicles and how they perform. And then a phone call to the dealership, we're seeing now that your people are taking that next step where you're they're going to interact with the dealership now before that phone call. And certainly before they go to the dealership, historically, I think we saw much more, you spend a lot of time reading online and on the dealership website, then show up at the dealership, you know, with with COVID, far fewer consumers are showing up to the dealership unannounced, right you've already been communicating with the salesperson or, or the service team inquiring about, you know, COVID protocols and appointments and so on, you know, you just don't want to be hanging out at the dealership waiting and wondering if you can get in, right? You want to be in and out as quickly and efficiently as you can. And so communication on, you know, Facebook Messenger and others social sites has definitely gone up between consumers and dealerships.
Ilana Shabtay 23:23
Yeah, and I think consumers want to be fairly certain that that's the one and only dealership that they're going to be going to during this time. So that that aligns with that theory as well. And before we sign off, this has been extremely valuable information for myself and I'm sure for our listeners as well. There's a lot of practical tips here that you've shared with us. So thank you for that. But before we sign off, I do want to hear a little bit about your background and how it influenced your time in automotive. And as I mentioned, your bio is extremely impressive, and you have a lot of experience outside of automotive, which I think is actually a huge advantage in building something successful in automotive. So I'd love to talk about that. If you can share just a little bit about how your outside of the industry experience has helped you in automotive and what that kind of perspective has given you and your team at Friendemic.
Steve Pearson 24:16
Sure, yeah, honestly, I never thought I would end up in automotive but I've been in Friendemic now for Coming up on eight years. And it's been an industry I've really enjoyed learning and being part of but you I started out my career in management consulting and looked at a number of different industries and worked with a lot of different companies for a fairly broad experience across industries, but really settled in what was called it McKinsey then a practice and somewhat nascent at the time but a customer experience practice and so worked with a lot of different companies and a number of industries, helping them manage Customer happiness really, the net promoter score was as pretty new and a hot topic back then and did a lot of work around helping companies discover and improve their net promoter score, I spent, worked with a number of companies in their call center operations, which also does not rank highly among consumers as a pleasant experience generally. And so I think that definitely informed quite a bit of my thinking and how we try to help our dealership clients that are endemic that we, I spent a lot of time working with businesses who said, Look, we've got a great product we really truly do. And yet, you know, people say they hate us. Right? And that, that's the experience is people call a call in and sit on hold and deal with call center lines. Yeah, so spent quite a bit of time there, really, because I was based in Silicon Valley mostly was working with tech companies and in software companies. And I think that's informed my experience quite a bit as well that you're to really do things at scale. Your there needs to be the right balance of automation and human touch. And there really has to be a big reliance on data. So I think those have been some of the lasting effects and things that I learned that I tried to bring to my work for endemic and recommend strongly to dealerships.
Ilana Shabtay 26:31
I think that's extremely important and very, very onpoint with where dealers should be today. So thank you for sharing that with us. And thank you for all of your content today. It was extremely eye opening. I learned a lot for sure. I'm sure our listeners did too. And so if you did like this episode, please tune in and subscribe to the Inside Auto podcast. Thank you so much, Steve, for joining us today.
Steve Pearson 26:54
My pleasure. Thank you.
Thanks for listening to Inside Auto Podcast. Check out our other episodes with top entrepreneurs and industry leaders.