Wednesday 29 October 2014

BBC Radio 4's 'The Bottom Line with Evan Davis' tackles Review Sites

Subtitled 'TripAdvisor etc: The sites that can make or break a business' Find the podcast here.

 This makes interesting listening. Three big hitters in the world of reviews are featured:
  • Steve Kaufer - founder and President of TripAdvisor
  • Kevin Byrne - Founder and CEO of Checkatrade 
  • Colleen Curtis - Vice President of European Marketing at Yelp
Evan is his usual friendly self and asks the questions his listeners are asking themselves. if there are any surprises they are in the 'omissions' category. But these 'omissions' are important to understand, both for our clients and for consumers in general. As Evan quite rightly points out, it is all about trust, and without complete trust these sites may (even inadvertently) be imperfect in their ability to lead consumer towards the right conclusions.

Let's begin by commenting on the answers to Evan's specific questions.

"There are quite a few listings websites...what makes Yelp special?

Colleen "Locals, writing their local opinions about their local businesses.'

Were not so sure here, the vast majority of reviews written on are written by US nationals. We're not saying that is necessarily a bad thing, but it would be misleading to describe the reviews as written 'by locals'.

To Steve: What's the deal? 

Steve 'It's an advertising model...we earn a small commission.' 

We don't think consumers have any idea just how much of the cost of their holiday or hotel room is taken by TripAdvisor or the OTAs. If this was the financial services industry both would undoubtedly be forced to disclose their 'small commissions'. Just how many consumers would revert to booking direct then?

Evan: "The absolute key, totally at the heart of it...that you trust the reviews."

To Colleen: "How reliable are your [Yelp's] reviews?" 

"Our Elite reviewers... are the most trustworthy reviews we have on the site." "They are not paid." "Our recommendation software...shows the 75% we believe to be most trustworthy."

So the 'average' reviewer's opinion is not as valued as the Yelp insiders'? We can see how this might work in the consumers' favour if it were not for the fact that Yelp Elites were originally rewarded with free food and drink at what have been called 'Yelp-fests' (or, less politely, Yelp Elite 'invasions') where Elites gather at the 'invitation' of the chosen hostelry. This model patently appeals to the younger consumer, which may have resulted in the college/twenties profile of most Yelpers and Yelp Elites. It has also meant that the focus of Yelp reviewed businesses is very much centred on the types of business frequented by that demographic.

"That is de-recommending [love that word!] ones that may be fake or biased."

This is a massive bone of contention for small businesses who have had positive reviews 'de-recommended.' They all accept that having great reviews on Yelp (or TripAdvisor) drives business through their door; it is just that power that means that everything these businesses do should be open and transparent. Neither the way they are remunerated nor the way they 'manage' their reviews is.

Evan: "Steve, how reliable are your reviews?"

Steve: "We have, you know, dozens of people, an entire department frankly, set up to focus on automatic detection of reviews that are suspicious. We have enough reviews so that there's this image of honesty in numbers. No-one is going to pay the review that is all terrible."

"Having a variety of opinions enables the consumer to believe the good ones and the bad ones."

We see these two statements as contradictory. And contradictory to the detriment of both businesses and their consumers. Negative reviews hurt businesses - full stop. Maybe not Hilton or Marriott (businesses with strong brands) but they can hugely hurt independent businesses. See what Kevin has to say:

Kevin : "One third of negative complaints are bogus."  "These businesses are frightened, they know that if they get one bad review then, for the next month, their phone is not going to ring."

There follows a discussion of Pimlico Plumbers' law suit against Yelp. It surrounds one negative review. There is much joshing along the lines of "They have a four-and-a-half star rating, why should they worry?" 

They are worrying because that single review is harming their business.

Evan says to Kevin: "You are conflicted." 

TripAdvisor and Yelp got off lightly here: just like Checkatrade, they make their living from the businesses.

Evan: "Do businesses care?"

Steve: "Businesses care a lot [his stress] about their ranking on review sites."

And quite rightly. The problem is not that review sites don't drive business, it's that they have the reverse ability: to unfairly drive business away. This is partly due to a phenomenon that Evan just barely touched on when he said "Who are the nutters who write reviews?"

All the evidence is that the people who write the reviews (and unwittingly control our opinions of businesses) fall into two distinct categories:
  • Habitual review writers. These are in a tiny minority (for instance: only one guest in 1500 reviews a hotel). They are not necessarily 'eccentric', but they are unusual
  • Unhappy consumers: all of us can be provoked into writing a review if our experience of the business is bad enough (a high proportion of TripAdvisor reviewers who have only written one review have made that a one, two or three star review) 

To summarise

Businesses must take reviews and review sites seriously: consumers are influenced by them, both positively and negatively. But we are still in the 'Wild West' phase as far as the individual sites are concerned. there is a lot of power without responsibility hiding behind the 'freedom of speech' mantra that was trotted out again in this broadcast. 

Businesses have a responsibility to themselves and their customers to take control of as much of the review management process as they can - and to engage professional review managers like HelpHound to help them. Then their customers will not be driven into the arms of review sites because they are the only solution offered.

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