Thursday, 4 March 2021

Review sites: is there 'something rotten in the state of Denmark (and the US and the UK)'?



The announcement that Trustpilot has chosen the UK stock market for its
£1 billion IPO has shone more light on the sector as a whole - and this on top of the recent court decision to award a business subject to what the judge described as '[a] negative review [that] has led directly to the drop in enquires and in turn to the number of enquiries which have been turned into instructions' that was hosted by Trustpilot.

Overarching all of this is the fundamental question...

Is there a role for review sites in 2021 and beyond?

So let's look at this in more detail...

What function do review sites, such as Trustpilot and Yelp, perform? 

First from the consumer's standpoint...

  1. They allow consumers to post reviews of their experience of businesses and products of all kinds
  2. They enable consumers to read reviews of services and products they are considering purchasing
From the business's standpoint...
  1. They provide consumer corroboration for the business's other marketing
  2. They provide a feedback channel
Now, if it were all as simple as this, there would be no need for review sites. Why? Because Google provides all of these functions for free.

So why do sites such as Yelp and Trustpilot exist at all? For two obvious reasons...
  1. They were founded well before Google made reviews core to their business model, often with significant investment ($56 million in the case of Yelp, founded in 2004 and $193 million for Trustpilot, founded three years later)
  2. Google doesn't 'sell' its reviews service, so the market for 'sold' review services is wide open
Yelp is the only publicly quoted reviews site, and its share price history reflects the entry of Google into the reviews market...



So, if the Trustpilot IPO gets away it will be intriguing to see how its share price performs. We take the view that just as Yelp and Trustpilot saw the demise in all but winding-up of Yell/Hibu (the old Yellow Pages) that Google, even though not directly marketed, will see off the likes of Yelp and Trustpilot, simply because...
  • Google reviews are seen by everyone - those of Yelp and Trustpilot are not
  • Google reviews have credibility - partly as a result of their ubiquitousness, partly because reviewers and businesses find it far more difficult to 'game' Google reviews 

Other controversy surrounding review sites

As regular readers will know, we have not recommended a review site to any of our clients since Google entered the market. A cursory reading of reviews on these sites - of their own offerings - continues to reinforce that decision. 
  • Trustpilot hosts over 20,000 reviews critical of its own services on its own listing, and the tone is pretty universally along these lines...














Another 'no smoke without fire' source of information about businesses is Glassdoor. One or two negative opinions by past employees are to be expected, but when they number in dozens? Here's just the latest of many...




The final nail, for us, was provided for us by Peter Muhlmann, Trustpilot's CEO, when he said...

“I’m not claiming that we are perfect. The new way to be perfect is to be transparently imperfect and show that you care.” 

No. The way to be 'perfect' is to have a transparent, consumer-focussed, compliant review management strategy. And that means Google reviews. Nothing else.


Potential abuse

Another disadvantage, for both consumers and businesses, is the complete lack of moderation by these review sites. Anyone can leave a review of any kind. on top of that, paying member businesses can challenge reviews, leading to swathes of quite genuine reviews never seeing the light of day because the reviewer cannot 'prove' they had dealings with the business.

We will be speaking to the Competition and Markets Authority on this and other subjects as they are currently conducting an investigation into review sites. Why? Because there are many thousands of businesses paying these review sites and, as a direct result, potentially misleading millions of UK consumers, wilfully or not, into use the wrong business.


And HelpHound - where does it fit in?

For the best part of the last decade, HelpHound has advised anyone who would listen to adopt a Google-centric reviews strategy. Focussing on professional services as we do, we almost always advise businesses to adopt our moderation system to ensure - for the benefit of their potential customers - that as few inaccurate or potentially misleading reviews as possible see the light of day. But we have one core precept: 'The customer always has the right to have their view heard' - combined with 'the business always has the right to respond'.

And finally...

Think about it - your business invests time and effort in reviews, do you want to end up, as businesses who were sold Yelp in the UK did, with your review site giving up on UK business altogether, leaving you to begin all over again? 


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