Business owners have formally sounded off on consumer review sites like Yelp — and it appears the vast majority are listening, but don’t take reviews as seriously as consumers do.
That’s just one finding of a recent Woodbury University study that explores the power of the consumer, and consumers en masse, to affect business behavior. Sponsored by ReviewInc and led by Kristen Schiele, Ph.D., MBA, assistant professor in the Department of Marketing, School of Business, Woodbury University, the study found that nearly 75 percent of 261 businesses surveyed monitor customer satisfaction in some form.
“When we began our research, I didn’t know what to expect because no study had been done from the business owner’s perspective, only from the consumer’s,” Schiele says. “I half expected to find that businesspeople were thinking along the same lines. It was surprising to see that review sites were way down the list — just 20 percent of businesses surveyed were monitoring customer satisfaction via these sites.”
Smart Business spoke with Schiele on how savvy businesses can engage with consumers and use crowdsourcing as a growth strategy. Studies at Harvard and Berkeley examined how reviews affected restaurant revenue.
How is your research broader?
Our study is the first to consider business as a whole, looking at review sites like Yelp, Angie’s List, Google, Yahoo and others. Aside from childcare and pet care, we addressed virtually every industry. We found that marketing services, health care, manufacturing, financial services and real estate are best at dealing with review sites.
Yelp-like sites represent a new platform for consumers to share their experiences with brands and products. Not long ago, the Better Business Bureau and Consumer Reports were all consumers had. Now, companies are trying to figure out this new platform — some of them, anyway.
Why don’t more businesses take reviews seriously?
The biggest barrier is time. Dealing with day-to-day issues, they don’t have the energy or resources to monitor sites. And some owners prefer not to read negative things. Still, a business can grow, improve and solve problems by looking at criticism, taking it to heart and making changes.
More
companies are mitigating fallout by using services like ReviewInc, which analyzes qualitative data and presents it in dashboard form. The business can see at a glance what people are saying. Suppose a company is on top of the consumer review data. What then? Companies that engage with people fare best. If a consumer posts, ‘We stayed at that hotel. The plumbing was bad,’ and the hotel explains how it corrected the problem and adds, ‘Next time you stay at our hotel, we’ll give you a free breakfast,’ that’s a win. But it’s not only about that future promise.What’s most important is that consumers were heard and responded to — their complaints were validated, and the company showed it cares. Consumers have access to so much information, and so many choices. If industry products and services are similar, why buy from a company that doesn’t care?
Where do reviews fit in, in a macro sense?
The old model was strictly one-way. Companies told the consumer what they had and that was it. Eventually, it became a two-way conversation where consumers could talk directly to the company. Now we’re seeing three-way communication, with consumers talking to other consumers. Businesses that participate can help foster customer loyalty.
And while it’s beneficial to
get positive reviews, it’s even more important to get lots of reviews, period. So, what’s the biggest takeaway? Sites like Yelp have turned the tables. The power is in the hands of consumers. It’s important that you aren’t passive. Since you can’t change the platform, how do you change your business to take advantage of a new opportunity to communicate? Understand it and then use it. Use it as a market research tool, which is cheaper than surveys and focus groups.It’s also more
authentic since these reflect actual behaviors, not just intentions. Use it as a customer relationship management tool. Then, armed with this information, make strategic decisions to help grow your business. ●Kristen Schiele, Ph.D., MBA, is an Assistant Professor, Department of Marketing, in the School of Business at Woodbury University. Reach her at (818) 252-5249 or [email protected]
Insights Executive Education is brought to you by Woodbury University
