A recent analysis of data from Yelp, one of the largest forums for online reviews, found that reviews of automobile dealerships are more polarized than for any other business category. Either they love us (★★★★★) or they hate us (★)!
Yelp provides an open dataset of its reviews for use by researchers, so software development firm Ceros crunched that data to examine the issue of polarization in online reviews. Ceros found that “more than any other type of business — restaurants, personal injury lawyers, pet shops, real estate brokers — Yelpers tend to run hot or cold about who sells and services their automobiles.” (See “Why We Love/Hate Car Dealers.”)
Polarization is a known issue in online reviews. University of Chicago researchers Nadav Klein and colleagues, writing in Harvard Business Review, described online reviews as “a dual-edged sword”:
“On the one hand, they’re a blessing if they help consumers to make more informed decisions. On the other hand, there is a systematic problem with many online reviews — they tend to over-represent the most extreme views.”
Klein’s research suggests that those who actually write online reviews tend to be those who either really loved the product or really hated it. However, he wrote, “if instead you had a moderate view, you’re likely to have left no review at all, finding it not worth the time and effort.”
Because online reviews reflect the extremes of consumer opinion, they generate what Klein calls a “bi-modal” or “J-shaped” distribution, as shown in this graphic, provided to us by Ceros:
You can see here that Yelp reviews in general reflect the love-’em-or-hate-’em extremes mentioned by Klein. However, you can also see a more exaggerated polarization reflected in reviews of car dealers.
What is it about auto dealerships that gets people worked up, for good or for bad? Speaking with Ceros, Serge Vartanov of AutoGravity, an auto purchasing app, pointed out that a car is the second most-expensive purchase a consumer ever makes. “It really impacts your financial health and well-being,” Vartanov said. “It’s polarizing to people because it’s emotional.”
The silver lining here is that, regardless of that scary stack of 1-star reviews on the left, the “J shape” for car dealers is still higher on the 5-star side. Courtesy, fair dealing, and a focus on customer experience have to count for something if you want to keep that side of the curve riding high.