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WSJ on Consumer Review Sites

October 6th, 2009 by Geoff Graham

This morning, the WSJ published an article entitled On The Internet, Everyone’s A Critic, But They’re Not Very Critical. The essence of the article: “when consumers write online reviews, they tend to leave positive ratings: The average grade for things online is about 4.3 stars out of five.” This article echos a recent YouTube question from their blog: “if the majority of videos are getting five stars, how useful is this system really?”

Visit Yelp, Kudzu, or Google Local and you’ll see this for yourself. Certainly not all experiences are 4.3 stars out of five, so where are all the unhappy folks? The truth is that, despite what you might guess, it is the moderately UNhappy people who are least likely to express an opinion. These are the normal and polite people who, having nothing nice to say, choose to remain silent.

When I started GuildQuality, I assumed the opposite would be true — that unhappy people would be more eager to give feedback. In actuality, when we survey on behalf of the builder, remodeler, or real estate developer, we observe that the best companies have both a high recommendation rate and a high response rate.

An obvious red flag for a business is a low recommendation rate, but another subtler warning sign is a low response rate. That means that your customers no longer care about your company.

This is why internet based ratings are so high — the relatively small percentage of people that provided them are generally passionate about the experience they received. They care so much that they pulled up their browser and published some of their feedback for the benefit of the entire world. If their review is negative, they are likely to be so extremely unhappy that they have become vindictive. This is a tiny minority of customers — even among mediocre businesses. But the majority of internet-based reviews are from people who are ecstatic about their experience — so much so that they will “do the company a favor” by giving some feedback. But most people simply express their opinion with silence: They don’t care enough to make the effort.

This latter group — the silent majority — fills in the void and gives you an accurate picture. These are people like you and me, and the kind of experience they had (but didn’t rate on Google Local) is the kind that all customers are most likely to have.

As the CEO of Yelp said in the WSJ article, “A broader range of opinions can give consumers a more complete view of a business.”

Whether you are a business looking to understand how you are doing, or a consumer deciding whether or not to patronize a business, the most reliable performance report will describe the experience had by all consumers — not just those that provide online ratings. That requires a high rate of participation in a survey of a significant group that is representative of all customers.

At GuildQuality, we try to keep it simple: We encourage every Guildmember to survey every customer, and we have a high response rate to our surveying. That maximizes the value and utility of the member’s survey feedback and performance reporting. And if they choose to publish their performance summaries, then that gives consumers something much more meaningful than a simple 5-star rating.

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