Friday 17 September 2021

Trustpilot losses surge

The Times' words, not ours...

And the Evening Standard...

What can we learn from these statements and the numbers contained in their first report as a Plc? First: the numbers.

The near 200 percent increase in losses is only partly explained by the costs associated with the IPO. Trustpilot would appear to be following the post-IPO path followed by Yelp by effectively buying customers with their cash pile. This has not ended well for Yelp, or those who bought its shares anywhere near their post-IPO peak, from which they have fallen over 50% and tracked sideways for the last six years (while the market, as measured by the Dow Jones Industrial Average, has risen by just about 100%):

$95 in February 2014, $36 today. And what fundamentally differentiates Yelp and Trustpilot? Well, Yelp has a colossal community/social media element that Trustpilot currently doesn't and is also massively more visible in search, otherwise they both boil down to being sites that host reviews in competition with an alternative that is free for businesses and consumers, but with far, far greater reach: Google.

Here is just one of a plethora of reviews by staff. One or two might be put down to disgruntled ex-staff, but dozens?

We almost always advise our client businesses to be entirely passive when it comes to Glassdoor. What do we mean by this?  We mean 'by all means respond to reviews on Glassdoor, but resist the temptation to 'encourage' staff to leave reviews'. Any attempt to 'inject some balance' by getting staff to post reviews of their experience will inevitably be seen by the outside world for what it is: manipulation (of the site and of your staff!).

Reviews - on Trustpilot

Goodness, you sure have to give Trustpilot credit for being 'transparent' (see the Evening Standard headline quoting their CEO). 18 percent of reviews rating them 'Poor' or Bad', with bad at 15 percent? That's over 25,400 people, of whatever stripe, taking the trouble to criticise the business on its own site.

Reviews - from business customers - on other review sites

And on a similar site: Only 116 out of 1,932 reviewers recommend Trustpilot.

Much the same story.

Could this be sour grapes? perhaps (what couldn't we achieve with just a fraction of that cash mountain?), but please give us credit for one thing: we desperately want to see an environment where reviews are reliable, not just 'partly reliable' or even 'mostly reliable'. Why? Just imagine you're looking for a life-saving or life-changing service - an oncologist, an investment manager, a divorce lawyer - and you chose one based on the kind of reviews hosted by Trustpilot, and the kind of business that is attracted to their quarantine system out of impure motives? Quite. 

So why doesn't Trustpilot simply change its business model? Because they would then become 'Google lite' - less reach, less credible and very little added value for businesses.

If you are currently paying Trustpilot?

Seek professional advice. And while you are doing so ask yourself - or your marketing director - a simple question: 'Would we prefer to have [insert current number of reviews hosted on Trustpilot] on Trustpilot or on Google? And in five years' time?

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