Navigating Online Reviews for Businesses

Ah, the review.  When pondering this topic, I can’t help but think about how much of my own spending has been influenced by strangers on the Internet.  Almost every new restaurant I decide to try has to be four stars or above on Yelp, with at least a reasonable amount of reviews.  Why would I bother trying a dry cleaner with poor reviews when there’s one with good reviews right down the street?  If I’m in the market for something on Amazon, you bet I’m looking at a lot of reviews before I decide to shell out my hard-earned money.  Call me a review snob if you wish, but I like being an informed consumer.  Plus, I’m pretty sure you do it too.

So just how important is our review-centric culture?  Here are some interesting statistics from 2016 compiled by Vendasta.com from outside sources:

  • 92% of consumers read online reviews
  • Star rating is the number one factor used by consumers to judge a business
  • 88% of consumers form an opinion by reading up to ten reviews
  • Only 14% of consumers would consider using a business with a one or two star rating
  • 48% will visit a company’s website after reading positive reviews
  • Over half of young people aged 18 to 34 say they trust online reviews more than the opinions of friends and family
  • Reviews produce an average of 18% uplift in sales

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So yes, reviews are extremely important for businesses of various sizes.  Almost as important as the reviews themselves, according to the above statistics, how a business handles a bad review can make the difference between a return customer and leaving a sour taste in a customer’s mouth: 95% of unhappy customers returns back to a business if it resolves their issue quickly and efficiently.  I think that this statistic does highlight that even after everything else, customer service is still king.

But should businesses always try to appease their customers?  Over the years we’ve all heard stories of business owners attempting to fight back against negative online reviews.  Just quickly googling for “yelp fight” turns up these and these examples.  While it’s certainly within a business owner’s right to respond to online reviews (there’s a reason Yelp has put in that feature), it’s important that business owners have a well thought out plan on how to respond to customers in a way that accomplishes what they desire (e.g. telling their side of the story or social shaming the customer) while not doing it in a way that may turn off potential customers when they read the response.  This is clearly a delicate balance, especially if you wish to convey how bad the customer was, but responding in a measured, professional manner can mean getting an unsatisfied customer to return and getting new customers in the process.

Thinking about how business owners should act also got me thinking about ways that businesses can leverage our own biases towards positive reviews.  I stumbled across an  article about a reporter who set up a fake karaoke truck business.  After setting up a company website, Yelp profile, Facebook page, and Twitter account, he was able fake-reviews-1to easily and cheaply set up and pay for an extremely positive online reputation for the business.  Using Fiverr, a website where you can pay someone five dollars (or more) to complete a task for you, the reporter spent a couple hundred dollars for thousands of Twitter followers, hundreds of Facebook fans, and a bunch of five-star Yelp reviews.  His fake business ended up being so convincing that he received phone calls from real consumers asking to book his services.  The business’s reviews did end up getting flagged as fake by Yelp (which entails a temporary mark on your Yelp page stating that you may not be trustworthy), but the other social media networks didn’t catch on.  In the end, paying for a fake reputation and online following may end up being a short-term gain, but will likely catch up to you later on.

Obviously, there are some serious personal and ethical considerations for business owners that understand how powerful online reviews can be in driving business.  I believe the first consideration for business owners is to think about how online reviews, both positive and negative, affect your business.  If you’re a McDonald’s franchise owner, chances are that positive or negative reviews won’t significantly move the needle for your business.  Yes, customer service matters, but people likely aren’t determining whether to go to McDonald’s based on the Yelp reviews you received.  These business owners likely don’t need to worry nearly as much about what the Internet is saying about them.

However, if you own a small business whose success may be highly correlated with its online reputation, it’s important to create a game plan.  If you intend on engaging with customers who review your business, it’s imperative that you do so in a way that’s constructive.  For positive reviews, it’s very easy to be gracious and accept positive feedback.  The real challenge is how to address negative reviews.  It may make sense for you to be apologetic and humble no matter whether you believe a review is unfair (i.e. “The Customer is Always Right” path).  Or, depending on the merit of the customer’s review, it may make sense to constructively challenge the claims with your own point of view.  As long as it is kept civil, your response likely won’t be viewed negatively and may lead to a positive end result.   On the other hand, maybe it just makes sense to embrace it:

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7 comments

  1. Awesome post and super relevant to our topic this week! I was really taken aback by the statistic that “Over half of young people aged 18 to 34 say they trust online reviews more than the opinions of friends and family,” so much so that I didn’t even really believe it at first. But after thinking about it a little more, I guess I’d say that in some cases I do trust online reviews more, mostly because I trust the idea of aggregation and regression to the mean. If I ask a friend, I may get an extreme experience, but online, star ratings & popular comment sentiment is much more likely to be more accurate to the experience I can expect.

    I think the response to reviews can get tricky though-as we’ve talked about in class a lot, businesses really have to be careful about where they draw the line between funny & mean/rude, as well as determining when it’s best to respond and when they should just let it be. I’d be curious to know if large companies that do have social media teams let their social teams also handle responses to reviews that may come through something like Yelp or TripAdvisor, or if they leave that to customer service. I’d think combining the two would probably be best for consistency & accuracy, but I wouldn’t be surprised if most companies view that as two totally different departments.

  2. Great post! I’m definitely guilty of trying to use customer reviews for any purchase I’m making, from Seamless to Amazon to Uber (yes I cancel if my driver has a low rating). However, over the years, I’ve read so many stories like the ones you mentioned of businesses artificially generating reviews, that I’ve become skeptical in almost all cases. I think some businesses are forced to create artificial reviews as people are much more likely to leave a negative review for a poor experience than a positive review for a good or great experience. I think this contributes to a lot of perfectly good businesses losing customers based on 2-3 poor experiences out of hundreds of good or great experiences.

  3. Great post and super relevant to how consumers (when alone in front of their screens) make decisions. I, like Danni, was surprised to read that millenials tend to trust online reviews more than the opinions of family and friends. This aligns with our discussion on the importance of the wisdom of crowds given the aggregation, decentralization, and diversity of opinion. The one drawback of online reviews whether they be on Yelp, Amazon, or elsewhere, is that they can generate biases through a lack of independence. I.e. one opinion may in fact help determine another. In effect, the power of suggestion through reviews like the “worst rum and coke” can generate unwarranted momentum.

  4. Great post about a very prominent digital feature used by tons of consumers nowadays! I personally don’t really read through or search reviews for products or places before I act, but I do feel it is a growing an important feature for a majority of people, as you highlighted in your statistics section. We did a case study in one of my previous marketing classes about reviews and how business capitalize and/or react to them, and I think your point that they negative reviews are the most important. This is a big opportunity for companies to show off their customer service and “human” side to themselves, yet it can be a difficult task if they do not have the right approach. I’ve definitely went to restaurants and bought products that I would not waste my money on again, so maybe I’ll have to start paying more attention to reviews in my future!

  5. Great post. I’m also definitely a sucker for reading reviews before going into a restaurant or business (I also like to check Instagram). I lived in New York this summer and I felt like that’s where Yelp reviews really became important to me, because people were posting them so much that I could see a review from the day before I was going to eat there – rather than from 2 years ago like some places. One time, however, I was at dinner with some friends and the waiter paid for a free round of drinks for us if we wrote a positive yelp review. Of course we said yes, and I showed him the review (with his name in it) before posting it. I found this very interesting because I loved the restaurant, the waiter was great, but it still felt like bribery to post a good review, so I wonder how genuine these reviews are. Also, I’ve heard of other businesses going under fake aliases and posting on competitor’s reviews page. So as great as real time reviews are, I take them with a grain of salt.

  6. I actually think the businesses response on Yelp and others tells me alot about them. If the company comes back with a reasonable response, it tells me that a) they are paying attention and b) they are willing to work with the customer within reason. Those are important for me.

  7. So much of the decisions I make about where to eat or what product to buy on Amazon are driven by reviews. I guess people have their different ways to doing research, but I tend to look at a perfect rating, a low, rating, and a recent rating to make sure I get a more holistic perspective. Given that I’ve reviewed maybe 10% of all the products I’ve bought online, I’m glad there are people out there who consistently provide their feedback for everyone else’s benefit. I find it interesting that more people trust strangers’ reviews than their own friends, because it does seem like social networks are really trying to capitalize on advertising what my friends like so that I’ll be more likely to engage. But I’d say a local restaurant that handles its social media well, is definitely more appealing and highly contributes to repeat visits if I get updates about specials, etc.

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