The Upside Of Bad Online Customer Reviews


The Upside Of Bad Online Customer Reviews

Mirela Iverac, 08.04.09, 06:10 PM EDT

Take your medicine publicly–your business will be better for it.

Back in 2004, Jim Noble bought a $140 laptop case from eBags, a luggage retailer in Greenwood Village, Colo. He wasn’t pleased, and he wanted the retailer–along with any other unsuspecting customers–to know it.

First, he posted an unflattering review on eBags’ Web site. That let off some steam, but it didn’t solve the problem of finding a case that fit his needs. Then he sent an e-mail (with photos) to the company outlining all the ways the bag could be improved, including a sturdier zipper that moved over a more rounded, forgiving path. Ebags paid attention, made the adjustments and the case has since become a best seller.

Five years later, eBags is among the only 50% of online retailers that offer online ratings and reviews, according to the latest figures from Forrester research. Meanwhile, 80% of Web buyers troll reviews when shopping online. The lingering fear: Negative reviews will send customers running the other way.

It’s misplaced. Barely 25% of online shoppers report that they are unlikely to purchase a product after reading negative reviews, and most take those reviews with a bowling ball of salt. Truth is, negative reviews probably won’t hurt your business–and they ultimately may help boost customer conversion rates.

Reader Comments

Here we are… the best chance of what the liberal-left wants and screams for, yet the most conservative and pro-American business you’d ever find. What kind of reviews do you think we get?

Continuous Improvement

When Peter Cobb launched 10 years ago, he had a straightforward vision. “It had to be better than a brick-and-mortar store,” he says.

That meant taking advantage of the effortless feedback loop afforded by the Web. Cobb can recount 10 situations in which dissatisfied customers suggested changes and eBags acted on them.

Sticking to that strategy isn’t easy when you’re selling other brands, such as Samsonite ( SAMC.OBnews people ) and Nike ( NKEnews people ), who would rather not invite the criticism. “Our [suppliers] sometimes call and ask us to have customer testimonials removed from the Web site,” says Cobb, but he won’t cave. And if customer complaints aren’t addressed within a reasonable amount of time, he’ll drop the offending brands.

Nearly 1.8 million reviews are now on eBags’ Web site. According to BizRate, online reviews are one of the top reasons customers choose eBags over “50 sites they could find on Google selling the exact same product, often at the exact same price,” says Cobb.

Negotiating Leverage

The same wisdom applies to more subjective realms, like food products. “Food is like music or art,” says Tim Harris, co-chief executive of La Tienda, a Williamsburg, Va., online retailer of gourmet items from Spain.

Harris feared that negative customer reviews would hurt sales, and only this June mustered the courage to let customers post their opinions. When a pre-cooked paella dish got panned, Harris went back to the vendor and asked about the ingredients. Turned out the rice wasn’t up to snuff, and the vendor agreed to change it.

Says Harris: “Instead of [the vendor] thinking it’s just me and my opinion, it was: ‘Look, this is what the customers said.’ ”

Building Trust and Loyalty

It’s not enough to let customers post reviews–you have to let them truly speak their minds. Bryan Eisenberg, founder of Future Now, Inc., which helps businesses optimize their online marketing efforts, says he sees the same mistake all the time: “Businesses put up reviews, and they’re all positive.”

Take Evogear, a ski-equipment retailer in Seattle. When the company began posting reviews three years ago, it chose to “moderate [them] conservatively,” says Nathan Decker, director of e-commerce. That meant posting only reviews with the highest ratings. Customers didn’t buy it. “It was kind of screaming at you,” says Decker. A year later, Evogear decided to post “99.99% of negative reviews that end up on our moderation desk.”

Prompt replies to negative reviews go a long way to building a loyal fan base. La Tienda’s Harris says people are thrilled when he offers them a refund or another shipment of the same product: “These people are your best cheerleader and your customers for life.”

A final, powerful psychological aspect to bad reviews: According to studies by Bazaarvoice, provider of customer-review software, exposing a product’s weaknesses sets realistic expectations, thus reducing the number of product returns. Publicly traded companies play a similar game when they manage security analysts’ earnings expectations downward to stave off sudden declines in their share prices.

If the big guys can do it, why can’t you?

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