During the mid-1980s, business owners were warned about an American Management Association study that found on average a satisfied customer tells three people about a good experience while an unhappy customer complains to 11. The message was clear: One dissatisfied customer quickly can undo much of the effort a business owner has invested into building a good reputation.
Fast forward to today, and what has changed? A lot. In his 2008 book, Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000, author Pete Blackshaw says to succeed in a world where consumers control the conversation, companies must achieve credibility on every front. But given the proliferation of consumer review sites and those focused entirely on customer complaints, managing a company's reputation is getting more difficult.
Sources consumers trust
According to a 2009 survey by Opinion Research Corp., Princeton, N.J., 84 percent of U.S. consumers say online customer evaluations influence their decisions to purchase products or services. Commonly checked sources include online rating sites, consumer advocacy websites and company websites. Although consumers especially trust people they know, they trust online consumer opinions over strangers and many forms of paid advertising.
A 2009 Nielsen Global Online Consumer Survey found recommendations from personal acquaintances and opinions posted online by consumers are the most trusted forms of market intelligence when consumers are researching a purchase. However, companies can be encouraged by the fact that company websites are trusted at the same 70 percent level as online consumer opinions. In contrast, only 55 percent of respondents had some degree of trust in billboards, and online banner ads fared much worse at 33 percent.
Customer review websites
By now, most people are familiar with Angie's List, an Internet-based ratings organization founded by Angie Hicks. In 1995, the organization had 1,000 members. Currently, the company has more than 1.5 million members throughout the U.S. The concept is simple: Consumers rate service providers in hundreds of categories—everything from caterers to cardiologists—and every type of contractor, including roofing contractors. Companies are rated on an A-F grading scale, and customers complete detailed reports about their experiences with companies. Service providers cannot pay to be rated nor are they allowed to rate themselves.
However, businesses are offered a free account to monitor and respond to ratings. If desired, Angie's List will notify service providers when reports are submitted about them. Notifications will be sent each time a report is submitted, or postings can be aggregated into a weekly report based on a company's preference. Registered service providers are encouraged to respond to reports.
Each year, Angie's List honors companies that have maintained a superior service rating from members with the Super Service Award. Rooftech Systems Inc., Darien, Ill., received the award in 2010 and 2011. John Gorgol, Rooftech Systems' vice president, believes high ratings on Angie's List and other customer review sites help his business.
"People often mention the Super Service Award when they contact us," Gorgol says.
Customers also have told Gorgol they found his company by checking ratings for local roofing contractors on the Consumers' Checkbook and Better Business Bureau websites. He estimates the closing percentage for leads from Angie's List, Consumers' Checkbook and the Better Business Bureau is 30 to 40 percent better than other leads.
Yelp and Yahoo!® Local also are popular local search sites with forums for customer ratings. Unlike Angie's List and Consumers' Checkbook, which require paid membership to search listings, these sites allow anyone to comment and search listings.
Customer complaint websites
Internet complaint sites provide frustrated customers and unhappy employees a forum for airing gripes, but it also may provide devious competitors an unfair market advantage by providing a platform for posting fictional accounts of bad service.
The sites vary in their policies—some have terms of agreements requiring postings be truthful and based on actual incidents; others have no such policies. Also, some complaint sites retain the right to investigate complaints if there is reason to believe the accusations are false. Others do no fact-checking at all. Almost all complaint sites offer businesses the opportunity to respond to postings. The catch is companies first need to be aware negative information is being broadcast about them online in order to respond.
Although some sites remove complaints that have been resolved, others keep all complaints public indefinitely to create a permanent record of the company on those sites. Following are some of the most popular websites where negative customer service experiences are discussed:
Managing your online reputation
When thinking about how to manage your company's online reputation, it is important to remember forming and maintaining relationships with customers always has been central to service businesses, but building those relationships online requires more two-way communication and transparency than in the past.
Social media thought leader and strategist Charlene Li encourages organizations to use social media and to be open yet still maintain control of their brands. Her book Open Leadership contains case studies highlighting methods successful organizations, such as the American Red Cross, Humana© and Wells Fargo, have implemented to manage openness while ensuring business objectives are at the center of openness strategies.
"The inclination may be to fight this trend, to see it as a fad you hope will fade and simply go away, but it won't," Li says. "Not only is this trend inevitable, but it also is going to force you and your organization to be more open than you are today."
Managing your online reputation requires not only a new mindset, but also a new set of skills. So how do you do it? There are three key activities:
The first step is to do a vanity search of your business name on popular search engines, such as Google, Yahoo! and Bing.™ Does your website appear in the first few pages of organic search results? Is your business being reviewed in online forums? Is the most recent information about your company most prominent? The simplest way to stay on top of the online conversation about your brand is to set up Google Alerts to send you an e-mail update when your business is mentioned in a forum, blog or online publication. Some review sites also let business owners opt into receiving notifications when a review is posted.
By regularly checking the online conversation, you can thank satisfied customers, learn what disgruntled employees are saying about you and even win back unhappy customers.
To do so, first, claim your local listings at Google Places, Bing's Business Portal and Yahoo! Local by signing up as a user at each business center. Then, search for your business by name and address. Your business already may be listed because search engines aggregate information from different places, such as the Yellow Pages and other third-party providers, to create local business listings. If you find a listing for your company, you can verify and personalize it by using appropriate keywords and images or videos that will optimize the listing and increase the chances it will appear in search results when people are researching your type of business in your area.
What if someone says something unflattering online about your business?
"As much as you try, you're never going to make everyone happy," Gorgol says. "Sometimes, things just don't go right."
But responding to reviews requires tact. The most important thing is to keep your emotions out of it. Don't respond when you are angry. Take time to get control of your feelings and compose a thoughtful, courteous answer. Some sites give business owners the option to respond publicly or privately to a posting. If provided the option, it is a good idea to do both. A public response lets other potential customers know you care enough to address the problem. A private message allows you to take an extra step to try to ensure the reviewer is aware of your response. You also may want to use private messaging to begin to negotiate a resolution to the problem. Some customers will upgrade a poor review if they are happy with a business's response to their complaints.
For positive reviews, send a private message or post a brief public message thanking the customer for his or her business and the review. Don't use it as an opportunity to drum up more business by singing your own praises or offering promotional discounts to other customers. In online communities, such practices generally are viewed as exploiting the generous gesture of a customer that already has voluntarily promoted your business.
Many review sites offer paid advertising options. AdWords advertisements appear above or beside organic search results in Google Places. On Yelp, advertisers can offer a promotional deal, giving Yelp a percentage of every deal that is purchased. Yelp also provides some analytics tools, including statistics and charts showing how a business page is doing on the site. Angie's List only allows companies with an A or B rating to advertise. If a company falls below a B grade, its advertisement is revoked.
Online reputation management
The potential for damage resulting from online information has led to the development of an entirely new type of business—one focused on damage control. Reputation-management companies identify what is written online about a client and use search engine optimization (SEO) and Internet marketing strategies to counter negative information.
Because people often only look at the first couple of pages of search engine results, a key tactic of reputation-management companies is to publish a significant amount of positive information about a company online to push negative publicity down in search results. This is achieved by generating press releases, creating video content, acquiring positive reviews, blogging for a client and integrating a company's social media presence.
However, the reputation-management industry has its own image problem. On its home page, the customer complaint website ripoffreport.com warns businesses against falling victim to "digital extortion" from reputation-management or SEO companies posting fictional negative reviews online and offering to repair the target's tarnished reputation. The website claims some reputation-management companies may threaten clients by telling them they will write more negative reviews if the clients do not continue to retain the reputation-management service.
In an April 2008 article in Bloomberg Businessweek magazine, Michael Fertik, founder of reputation.com, admitted there is a lot of "ethical shadiness" in the reputation-management business and encouraged the industry to establish best practice standards. But until such standards are developed, reputation-management companies have to set their own policies.
Fertik claims his company will not lie for clients or impersonate customers, but many people following the reputation-management industry believe those kinds of tactics commonly are used by some companies. In the absence of good resources for identifying effective and ethical providers, it is wise to proceed with caution when hiring a reputation-management or SEO firm.
Closing thoughts
The Internet offers potential customers an opportunity to view every company's interactions with previous customers. This transparency requires business owners to ensure they provide great customer service, do excellent work, and quickly and carefully respond to negative information posted online.
The late Victor Kiam, former president and chief executive officer of Remington Products Co. LLC, Bridgeport, Conn., and owner of the New England Patriots from 1988-91, once said: "Entrepreneurs are risk-takers, willing to roll the dice with their money or reputation on the line in support of an idea or enterprise. They willingly assume responsibility for the success or failure of a venture and are answerable for all its facets."
His words are true now more than ever.
Jeanne Schehl, ED.D., is vice president of business development for RoofMax Consulting LLC, Barrington, Ill.
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