CEO Check-In: 3 Reputation Trends Going Into Q4

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I sat down with Widewail’s CEO to talk about trends in the reputation management industry. 

As of August 2024, he zeroed in on three ideas:

1. Consolidation in the automotive industry is leading to an increased need for centralized services
2. Distrust in institutions continues to rise
3. Free text is the next frontier of “voice of customer” data analysis

Trend 1: Consolidation Demands Centralization

The retail wing of the automotive industry is consolidating.

On average, 350 dealerships changed ownership annually in the 10 years pre-COVID. That average has grown of late:

2021: 707

2022: 634

2023: 528

And 2024 is on track for 604 based on Q1 activity.

Why?

“The main reason owners are selling dealerships is age,” says Alan Haig, President of Haig Partners. Prices between 2021 and 2023 were so high it was simply a great time to sell and retire.

The average profit per vehicle tripled during the post-pandemic dealership profitability boom. 

2019: $1,900

2022: $6,000

Q2 2024: $3,500

Profitability has fallen notably from its peak as production catches up and prices outpace affordability, but profit is still roughly 2x today what it was in 2019.

In my interview with Matt, he said, "We've got some clients who started with 3 or 4 dealerships, let's say 3-4 years ago, and now have 17 or 20. This acceleration of consolidation leads to the need for centralized services."

As dealers consolidate, consistency becomes an issue. 

Dealers think: "How can we keep up with the growth and maintain consistency across all our locations?"

This is what centralization solves for: consistency. With a centralized strategy and tech stack, dealers can deliver a consistent experience at every location, with fast onboarding times for new dealerships.

All of the stats in this section came from Alan Haig’s interview with Car Dealership Guy. It’s a great listen.

Trend 2: Distrust is the Default

Rachel Botsman presented the idea of waning institutional trust 8 years ago in her TED talk.

Today, Matt’s take is that consumers are more active in protecting themselves. They’ve been through hacker training at work. Scammers have targeted them. They’ve adopted complex and varied passwords. 

Distrust is the default. We’ve been trained to take care of ourselves and our personal information. Trust is earned.

And the “data breaches” keep coming. Change Healthcare, Ticketmaster, AT&T, CDK - all in 2024. 

"There’s just so many reasons to have general distrust. And who can you believe? You believe your neighbor before you believe somebody on TV for sure," says Matt.

Matt believes we can help businesses build trust by sharing customer success stories with prospects online. These do not need to be heroic stories. A simple, “they told me it was going to be $500 and that ended up being accurate” will suffice.

Buyers simply need reassurance. Share stories of great experiences, even with a very typical scenario. Typical is good. Predictable is good. Consensus is good. Consensus sells.

Trend 3: Free Text is the New Frontier

AI is creating change in voice of the customer data. Natural language processing enables the large-scale anaylsis of free text data, i.e. regular person sentences, as opposed to being limited to structured data inputs. 

For a long time, decisions have been made based on CSI, NPS, and SSI scores. While still a valuable piece of the puzzle, businesses have additional options now.

"In the last three to four years, the feedback we’re able to synthesize from unstructured customer and resident verbatims surpasses the utility of the traditional private survey."

Surveys suffer from low response rates and sometimes miss insights that customers bring to the surface independently. With the summarization capabilities of AI, we don't need a structured input to get a structured output. Any customer commentary can be analyzed and organized into topics, tracked by mention frequency and trended over time.

For the business owner today, here’s Matt’s view of what good looks like: 

1. Collect free text content from customers
2. Tag each review with positive (4-5 stars) or negative (1-3 stars) sentiment 
3. Use AI to organize comments into topic buckets, tracking “mentions”
4. Trend mentions of those buckets over time to identify movement 
5. Use industry-level benchmarks to compare your performance to what’s good in your industry this year/quarter/month

A number to summarize customer sentiment is surface-level at best. There’s nuance in your customers’ words. Understanding nuances is the fastest way to uncover your customer’s true problems and opinions.

The details that move the needle.

Anything Matt missed? Let me know.

See you next month - Jake, Marketing @ Widewail