September 26, 2014

Five Star Reputation Management

By Lewis J.

Earlier this year, the Union Street Guest House, a boutique hotel in New York City, announced a new online review policy. Any wedding party that posted a negative review of them online would be fined $500. Sadly, instead of stifling their critics, the policy inflamed them. Within weeks, the hotel received almost 600 negative reviews about its poor customer service. (One notable exception was a five star review from Adolph H: “I love to meet people who sink ze same as I do!”) The Union Street Guest House quickly rescinded its policy, but the damage had been done and it is unknown whether their business will ever be able to recover.

For most people, this is an amusing anecdote. For business owners, it is an important reminder of the how powerful online reviews can be. Not only do 85 percent of consumers read them, but even a one star increase on Yelp can increase a business’ revenue by five to nine percent. The reason is simple. Consumers don’t trust marketers, they trust people like themselves. Almost half of all consumers have written an online review, which may explain why seventy-nine percent of consumers trust them. In this context, the draconian policy at the Union Street Guest House is easier to understand. Negative reviews can be extremely costly. They not only more common than positive reviews, but they circulate faster through social media. In this environment, even the best businesses can find their reputations destroyed by a few online malcontents.

In order to safeguard themselves from the vitriol, some companies have tried to manipulate the system by writing their own reviews or hiring an outside company to post reviews for them. This approach is problematic at best. Review sites are capable of filtering out false reviews based on the IP address of the poster. Consumers can detect them too. False reviews not only contrast sharply with a site’s genuine reviews, which are detailed, nuanced, and brutally honest.

Other companies have tried using the legal system to eliminate bad reviews. They have contacted the hosting sites and demanded the reviews be taken down. While sites such as Yelp and Google will remove vindictive reviews in some circumstances, they are generally unwilling to remove negative comments that they feel genuinely reflect consumer experience, making this tactic both costly and unproductive.

If your business is being subjected to bad reviews, the best way to counter them is to respond to them. Sites such as Yelp and Google allow business owners to rebut reviews and correct misinformation posted about their company. Rebuttals are your opportunity to tell your side of the story so make sure you explain it in detail. Rebutting reviews accomplishes several things. First, it demonstrates that you care about customer experiences. Even if you can’t mollify the reviewer, your response can counteract the reviews impact on potential customers. Second, calmly responding to customer complaints one-by-one is usually enough to convince the customer to revise his or her review with a higher star rating. Upset customers want to know that their complaints are being taken seriously, so thank the customer for their feedback, address their complaints one by one (if they have any), and correct their misconceptions whenever necessary. If their complaint is valid, apologize. If appropriate, invite them back or offer them a discount.

If you’re running a large business, then it’s likely that reviews will be coming in faster than you can respond to them, so consider creating a complaints department to manage your online interactions, even if it is only one person. Or create a complaints section on your website to invite more feedback. Not only will this help uncover weaknesses in your customer approach, but it will prevent more bad reviews from proliferating on public directories like Yelp. Finally, take time to respond to positive reviews as well. Proactivity is the key to a five star reputation, so let your customers know that you’re listening to what they say and appreciate their business. Their goodwill will protect you from the inevitable mistakes, mishaps, and blunders that find their way online.

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