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September 04, 2006

Online Reviews and Small Businesses

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One of fortunate outcomes of the “democratization of information” is that anyone can now be a critic. You don’t even have to be work for a publication anymore because of sites like Local.Yahoo and Judy's Book. Even amateurs can rate businesses: Power to the people!

Ilana DeBare of the the San Francisco Chronicle wrote a terrific piece (9/3/06) about this phenomenon called “Amateur reviews changing approach of small businesses.” Check it out by clicking here. She starts off with a story of how a new restaurant thought it could work the kinks out during the first thirty days only to fibd out that customers were already criticizing the place on Yelp after the first weekend of business.

My favorite line in the story comes from a Seattle window cleaner:

“The yellow pages are going extinct. In 10 years you won't have the yellow pages anymore.”

DeBare ends with some good tactical tips:

  • Find out what people are saying about you. Even if you don’t know anything about Internet review sites, they may know about you. Do a Google or Yahoo search with your business name and “reviews” and see what comes up.

  • Respond to unhappy customers. Some sites allow you to send a personal message to reviewers; others let you post a public response. If a reviewer has a legitimate gripe, e-mail him or her with an apology. Consider making amends for their bad experience with the offer of a free or discounted service. If the site allows a public response, try to explain your side of the story without sounding defensive or angry. Avoid getting into a cycle of hostile accusations.

  • Respond to happy customers. You can’t ever thank people too much. If possible, send a thank-you note or small gift to people who write positive reviews.


  • Hmm...maybe there’s a business here: an outsourced company that would monitor what people are saying about an organization and help the unhappy ones and thank the happy ones. Bloggers could use company to thank other bloggers for links, post comments, and respond to tirades, etc. It would be perfect for someone who wanted to work at home.
  • Use reviews to improve your operations. Some negative reviews are off the mark, but most provide at least a kernel of truth about problems in your business. Take steps to fix these problems.

  • Encourage your customers to post reviews. Mention these review sites to your regular customers, and tell them how much you would appreciate them posting an honest review about you.

  • Use positive reviews in your marketing. Just like a Zagat’s write-up or a newspaper profile, a good online review can be posted in your shop window or on your Web site.

Finally, I think it’s great to read a practical and tactical piece like this in a major newspaper instead of the usual ode to a billionaire CEO.


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» Online Reviews and Small Businesses from Futurelab's Blog
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Comments

Actually, there is a company that monitors what others say about you on the Net. Forgot the name, though.

It is spectacular when you think 'now that's a new idea!', go to the Internet and bam! - someone already has developed the tool/script/program/company on *your* idea :)

I just wanted to say thanks for posting such insightful information on your webpage. I am learning a lot from you and have revised a lot of my design as well as strategy after reading your content.

A comment about your commenting order display:

http://www.river.com/users/share/etiquette/#inline

For as long as I can remember, I've been advising my clients to allocate a minimum of one full-time headcount to monitor and respond to online commentary about them (Kristin Zhivago's been singing this song for many years too). Every single last one of them (including at least one garage.com portfolio company) has resisted doing so. Maybe I should take up that business idea of yours ...

Business failing to review, monitor, and manage their online press is just plain ignorant. It's a huge opportunity (but I think most firms see it as a hindrance--wrong attitude) to wow customers. Find a legitimately wronged customer, make things right, and turn them into an advocate. IMO, every firm should monitor their online persona. Large firms need a dedicated person. I like to call this person a Reputation Deputy.

Re: Yellow Pages
I continue to dream of the demise of the yellow pages and phone books in general. Do people still use this dinosaur? However, I am still forced to cringe every summer when those evil tree-killers drop on every doorstep only to be used as kid-boosters or fire-starter.

Jeff...

When you can't find a trusted friend or family member who can give you their two cents, online forums and user reviews are the next best thing. It's how we buy software, computers, cameras, bikes, or picking a restaurant.

With only 14% of people trusting advertising these days - and more spending options than ever - the rest of us have to find more relevant sources of info before deciding on where and how to spend our hard earned cash.

Excellent post, as usual. (We quoted you on Corante, btw.)

Guy, you bring up a good point here. Yes reviews are a great idea and I rely on them as a consumer as well as a business manager.

When I was a Marketing Manager at an e-commerce company, my team treated any feedback we got like gold. Yes Carlos ... there were some nasty people and maybe competitors who just wanted to damage the face of our company but that got resolved either by the moderator removing feedback or these guys sounding plain stupid.

Companies should not be afraid of the feedback, even when it's public. Your customers talk every day and give that feedback to their friends, now you have the ability to listen in and act on it.

"shuchetana", on first read, my initial gut reaction to your second comment was the old axiom that the cream always rises to the top. If a business or product is that good, the overwhelming positive comments will dwarf the bogus or planted ones.

As for the ethics issue, not to go off on a tangent, but this is an issue in our society today that goes far beyond the business realm and online reviews.

When you think of review sites evolving, think about gossip. When you hear two people saying something like "did you hear what Mary (or Marty) did with the boss last night after work?" It doesn't stop until someone like me opens his big mouth and tells them to both shut up and that if they can't say anything positive that they should duct tape their mouths shut! Online reviews and rankings should operate in the same way. If someone says bogus things about XYZ Pizza (Gosh, I love that place!) then the rest of the community will essentially tell that person to shut up with positive reviews of XYZ.

Guy, Many of these suggestions go hand-in-hand with your August 27th. post http://blog.guykawasaki.com/2006/08/book_preview_wo.html

Carlos Lone made a good point about negative words, but I think in the end you as a business owner have to make your product the best possible to combat any paid or unpaid/natural negative reviews. In the end, its better you discover it and react than the blogosphere reacting for you.

Review sites are good, and extremely helpful for the consumers. Scott, the problems begin when they are used unethically, and those are problems both for the business owner, and the customer who is deprived of high-quality services. I suppose, that as review sites evolve, these problems will ultimately be dealt with.

Hi guy, Hope you had a great summer. I did and I'm back to business. Enjoyed this post quite a bit. I often google my name and other people I know and love. I think it is educational.

Lifelong learning , very good.

You are in so much trouble. My blog has cracked the technorati 50,000 mark. I am on fire.

The portrait I made of you representing the challenge I gave you of me beating you to Technorati top ten is back on eBay. It is a lovely bright powerful exciting painting. I hope at least a few of your fans look at it. I believe art should be accessible to the public. I might even be a little evangelical about this stuff.

I don't care about the money. I care about the passion. Maybe just one person will get this activity of painting your portrait. All I need is one.

I am kicking your famous aspic at blogging. Someone should give a shitake about that.

Hope after your first six or so months you are still having fun blogging, I sure am.

Eat my dust!!!!


http://gnosticminx.blogspot.com/2006/09/im-coming-out-i-want-world-to-know-ive.html

I've hesitated to comment for fear what I say may be considered spam. However, what we do is so similar to what you're suggesting that I must. We have a service called Promoterz that's just a bit of a twist on your outline. It identifies the happiest customers and gives those customers a megphone to share the good news with their friends.

Promoterz does this by asking customers about their experience with a remarkably short survey. Promoterz then invites customers to become a hero by sharing a valuable offer with their friends. Most customers then request to be notified of other special offers or newsletters. The net result is an increase in word-of-mouth referrals and an increase in repeat business.

The Promoterz service is designed to run automatically, and therefore "hands-free".

So, you find out what customers are saying, respond to the unhappy and the happy, and enable the happy ones tell their friends. The feedback helps a business improve and comments from the short survey are valuable testonials for marketing.

You can check it out at http://promoterz.com.

Re: your musing: "Hmm...maybe there’s a business here: an outsourced company that would monitor what people are saying about an organization and help the unhappy ones and thank the happy ones."

I certainly perform this service for clients, and I expect other marketing consultants do too. There is still such a lack of comprehensive conversation tracking tools that it's a lot more tedious a process than it probably has to be.

Great post Guy!

With regard to Ray’s comments, with all due respect I believe that he and others are missing the point.

Ray may indeed be correct when he says that businesses are “too open to criticism without recourse” but that is one of the many ingredients of capitalism and of a fair market economy. If I unfairly criticize XYZ Pizza and there are not enough positive reviews of XYZ, is the negative review of XYZ unfair, or did XYZ do a poor job of letting its customers know of a service/system/website/blog/etc. where they can share their experiences, pro or con?

I respectfully disagree with the concept that feedback is only valuable if a business decides to grow beyond the local market. Ever been to a local restaurant, car repair shop, dry cleaner, medical lab, etc. that has PHEONOMINAL service today but suddenly and without warning six months later is just awful? I know that I have!

As for “ray” and “shuchetana’s” question about counteracting untrue and planted negative comments, what about the other side of the coin where business owners pay people to post positive reviews of their business?

On reviews in general, if we are all being honest, one of the greatest shortcomings in our society today, especially at the consumer level or service side is true “customer service.” On one hand I am sad to report that in all of my travels I see it worsening at all levels including airlines, hotels, restaurants, retailers, airports, banks and phone call centers to cite just some examples. On the other hand, I can’t be too sad as after all, this is how I make my living ;-‘) One of the main problems I see in my work is that business at all levels spends a lot of time training on skill sets but fails to help employees understand the repercussions of bad service.

Finally, while reviews may not always be fair or foolproof, it is one the few tools that we consumers have to share our good and bad experiences with our fellow citizens and I for one think that this is a good thing.

My own experience is that you have to take online reviews with a huge portion of salt. For example, my son showed me how most of the guitar reviews on musiciansfriend.com are basically worthless. The cheapest piece of plywood with some strings slapped on it gets a 10 rating with tons of "this axe r00lz", because nobody is going to say they bought a sucky guitar. You can only hope you get lucky that someone who actually knows how to play tries the instrument and writes a review (pretty rare).

An opposite case was a ViewSonic LCD monitor I ended up purchasing. It was one a a very few models that had a digital interface at it's size and price range, yet the reviews at Amazon were blistering. But it ended up being one of the nicest LCD monitors I have seen, no dead pixels, and very configurable. I honestly can't figure where all those negative reviews came from.

I run a website that allows small and medium size businesses in niche markets to rate and review software applications (e.g. contractors reviewing construction software at www.riverguideinc.com). This business-to-business realm creates additional complexity; namely, the reference customers are hesitant to criticize a strategic vendor relationship and the vendors want control over which references are used.

We were amazed to see how honest the reference customers were once we assured them of their anonymity (the vendor won't be told who said what). There has been a very natural distribution of ratings and comments, despite the expectation that vendors would "cherry pick" their reference customers.

We have also found that the vendors are very reasonable about accepting negative reviews on-line, within reason. We gained their trust by editing in those rare cases of reviews approaching slander and we prevented most of those occurrences by making it a controlled reference process (i.e. competitors can just come on and write a false review).

I guess my main point here is that you can still find plenty of honest, cooperative people on both sides of the review if you are willing to properly manage and maintain your user-generated content.

Kawasaki Sama,
Excellent suggesstions. Particularly on small businesses saying "thanks" for positive reviews and the business.
At one time in my career I still thought that there would be macro economic blogs based on communities tied to local radio stations. (KUKI in Ukiah, whose 4x a week on-air "Kuki Sale," and some of the small regional FM radio stations in the southern counties of the Irish Free State, are examples I've used.
Well thought out positive post Guy. Great food for thought.
Best,
Jim Forbes
(off to chase ahi nine miles of LaJolla at the edge of a far kelp forest.)

That was a really interesting article.
Ray, that was an amazing comment, taking into account all the negative effects of these review sites. While they do have a lot of benefits, they're very difficult for small businesses to deal with; and of course, there is the unethical competition mentioned by Carlos. I suppose this will be something that small businesses will really need to be conscious of. There are a few marketing strategies that small businesses can use, so maybe those could be used to somewhat counteract any review problems?
But I'm feeling a bit sorry for the small business owner who might have to deal with these problems...

Another tip: Also link to reviews which aren't only positive. When buying a Roomba, I ordered from a site I had never done business with. They had links to about a dozen reviews on other sites. Some of these reviews weren't entirely positive, but pointed out a few problems, as well. That showed me that the site was okay with criticism and probably wouldn't simply ignore me if something went wrong, so I ordered from them (and was entirely happy with the order).

If you only link to reviews which don't critizise you, that makes me a bit suspicious. Nothing is perfect. And if there are bad reviews, I'll find them anyway. Better to get them from you so I know you're honest.

I hope that the business owners expressing concern about negative reviews don't either dismiss them as posted by cranks or blame them on the competition. Those of us who read reviews can usually tell a legitimate balanced comment from a "flame" (especially if you read blogs...), so give us some credit. As always, great commentary, Guy!

I disagree with this -- online reviews for places other than college student hangouts suck in most places in the US.

Guy also vastly underestimates the impact of the yellow pages. Something like 30% of all advertising spending is on the yellow pages -- so it must be working for somebody. For many segments of the population, looking at a phone book is more convenient than SMSing Google or powering up the computer.

Ok, this might be slightly off-topic, but it's related at least a little bit. Hills Bank, a local bank in Iowa City, where my parents live, does a similar sort of scanning, but not for reviews. They have someone read the newspapers and cross reference it with their customer list. Any time they see a customer's name mentioned, they send an appropriate response. For example, when my grandfather passed away, they sent a sympathy card signed by the employees at the branch my parents frequent most. That personal touch goes a long way to keeping business, and is especially important as a differentiator against the faceless multi-national corporation. My review of their small business: two thumbs up! Now let's hope they find this post and keep up the good work...

Automate that Google search (both News and Web) at http://www.google.com/alerts . A daily e-mail alert will keep you abreast with whatever new is said about you.

This is also where the long tail can turn into a scorpions tail. If you don't get it right and the bad press hit's the blogosphere, that will be out there forever. No matter what you do to turn the business around that initial impression will always be out there. There has to be the online equivalent of hiring the college kids to hang out in your noodle shop, who want's to eat in a noodle shop with nobody in it. It's all about the perception of quality the "other people are here, food must be good then" notion.

Anyone have any ethical dilemma about seeding the net with your own good reviews??

I find the whole concept of reviewing services, especially local services, to be largely negative and, ultimately, un-scalable.

From a business perspective, it leaves local businesses too open to personal criticism without recourse. Most importantly, there is no apparent option for small businesses to opt out of being listed in these, largely un-moderated, review sites. Anyone who has ever tried to start a small business themselves will know that it is largely a learning experience and whilst the benefits of positive feedback are obvious, negative or unsubstantiated feedback potentially outweighs these benefits.

Likewise, anyone who has ever served in a service capacity will know that the level of service varies for many reasons. This is especially true of fast moving services like in the food service industry where the levels of service and, on can argue, the quality of product will vary with the peaks and troughs of demands through a working day.

Whilst conventional wisdom dictates that all feedback is potentially good for improving business, this is only true if you intend to grow your business beyond the local market. It’s worth noting that most large businesses have a standard code of conduct which is the cornerstone of their business practice. This ensures that the customer has a uniform experience of their product or service no matter where and when you decide to use their products or services.

For local businesses, this leaves little choice for the business to grow organically if we are forced to adopt big business practices from the get go.

That is not to say that freedom of expression should be discouraged. However, the context should be more defined and more open. There is a difference in being able to engage customers in an open forum to that of a commercial service which purports to be unbiased and/or self moderating is considerable. Not being to opt out of being included in such a listing is inviting libel and its legal consequences regardless of American 1st amendment rights.

This brings me to the un-scalable aspect of such review services. I think that you will find that, whilst such sites will undoubtedly have some success and supporters, once it becomes more widely scrutinised it opens itself to a multitude of unforeseen issues.

I do use review sites myself. In fact, I never buy any products without checking out online reviews. I am also aware that any legitimate retail product is bound by consumer laws, returns policy and I certainly don’t feel bad about leaving negative remarks because any retail product should be backed up by a marketing strategy, user testing and quality control. It is a lot easier to be objective about products, not so for services; which can be largely subjective.

On a personal level, I largely frequent local establishments for the personal/unique service, atmosphere, unique products as much as for it’s convenience in terms of locality. In fact one of my favourite Chinese restaurants has a dedicated clientele from their reputation for being rude and patronising to their clients. It’s known for it, there’s even a lyric in a Warren Zevon song about it. Sadly, it’s no longer the case – the new owners have ‘aligned their business objectives’ and it’s lost its character and much of its clientele. If there’s one thing I’d like every potential reviewer to do is to watch the ‘Soup Nazi’ episode of Seinfeld before they post. And be fair. There’s always a Starbucks ready to move into your neighbourhood.

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