Yelp Hit With Class Action Lawsuit For Running an “Extortion Scheme”. Is Yelp selling out? After turning down a $550 million offer from Google in favor of chasing after a more lucrative IPO it would appear that Yelp is willing to trade off credibility for short term profits. You would think that a company that helps create online reputations for its paying customers would appreciate the value of a good reputation!
Andrew Ward
Chief Trust Officer
Yelp is a direct competitor of mine and I have a lot of respect for them. I use their service for researching restaurants in the city and when I travel.
One of Yelp’s policies that I have always admired is their steadfast position about not removing bad reviews. The only reason that social media (ratings and reviews) are valuable to consumers is that they present a more accurate picture of the business being considered, which enables better decision making. So I am a little disappointed to read the story Online Media Daily “Yelp Sued For Offering To Bury Bad Reviews In Exchange For Ads”. Hopefully this represents just a few over zealous sales representatives and isn’t indicative of pressure to sacrifice credibility for short term profit gains.
When high profile companies like Yelp lose the respect of their customers and their users it has a negative impact on the entire industry which holds great potential.
Andrew Ward
Chief Trust Officer
The big problem with traditional advertising aside from its high cost and irrelevance is that 75 percent of consumers simply don’t place much trust in it according to a Yankelovich survey. It is precisely the rise in consumer skepticism that is fueling the demand for consumer ratings and reviews. But will the scourge of advertising ultimately diminish the value of social media as a trusted information source?
I’m not saying that business deliberately make false statements, but in an attempt to present their products and services in the very best light, consumers often are left with information gaps that prevent them from making optimal decisions. Social media has the potential to be the great equalizer an address the problems inherent with transactions where asymmetrical knowledge exists. Authentic content is created by peers without compensation so it is objective. When it isn’t filtered and includes both good and bad experiences, it presents a more accurate representation of the business being evaluated.
I am concerned that as more ad dollars flow toward the Internet and social media in particular, traditional advertising practices when applied to social media for profit purposes will marginalize its value to consumers as a decision resource and as an effective marketing tool for good/great businesses.
Core to many reputation management solutions, is the creation and proliferation of “positive content”. The goal is to suppress negative comments and to create “managed reputations” that reflects how the business wants prospective customers to perceive them versus what real customers actually think of them.
It is this mentality that diminished the value of advertising in general and explains why consumers are hungry for authentic or natural reputations. Most people are smart enough to make their own decisions if they are given authentic and accurate information from which to do so.
Another example is ADP’s Social Marketing and Reputation Management Solution. ADP’s service provides many powerful tools that enable auto dealers to build vibrant online communities. The part that bothers me is that their service selectively imports “Positive Word of Mouth” content to “amplify and enhance the dealer’s good reputation”. Some car dealerships are great and consistently meet their customer’s expectations and some don’t. With ADP’s solution both can use social media and portray a comparable image to the unsuspecting consumer. In other words it will become another piece of irrelevant advertising.
Positive reviews when authentic, speak to a business’s ability to satisfy their customers’ but they don’t address how consistently they do it. A natural reputation that is unfiltered and authentic addresses both the quality and consistency. Consumers need both pieces of information in order to make informed decisions. This is what consumers are seeking and it will drive exceptional results for exceptional businesses. Any system or service that enables businesses to “amplify and enhance” their reputations to create and unreal expectations is disempowers both consumers and social media.
Andrew Ward
Chief Trust Officer
Trust FX
Hubspot (I am a customer) just released a very insightful report “The State of Inbound Marketing 2010”. The overall takeaway for me is that customers of small businesses are more empowered and have greater control than every before. Today’s digitally connected consumers know when they have a need and they use social media to make better purchase decisions when they are ready to buy. Building local visibility using social media and building trust with a natural online reputation is clearly a wining strategy that favors competent businesses and creates a sustainable competitive advantage.
Andrew Ward
Chief Trust Officer
The most effective way to attract, convert and retain high-value customers is to create a strong reputation that fosters trust. Over time, this solid principle has not changed. Your best prospects are those who have a high level of trust in your business. They make quicker decisions, are more willing to pay a premium price, have the higher levels of satisfaction and are the most likely to buy from you again. Conversely, customers who have a low level of trust take longer to make decisions, demand larger discounts, are more likely to be dissatisfied and are less likely to buy from you again.
Creating trust is clearly a very valuable asset to cultivate since even modest gains in prospect conversion rates, pricing levels and retention rates can have a major impact on profitability. For example, just a 5 percent improvement in retention can increase profits as much as 95 percent, according to Bain & Company.
With the explosive growth of social media we are seeing the emergence of a new class of internet sites dedicated to publishing consumer reviews on local businesses. Yelp, CitiSearch, InsiderPages and Angieslist are just a few such firms that afford the creation of online reputations. After a decade of relying on consumer ratings and reviews for making online purchases, the majority of today’s consumers look for consumer ratings when seeking a local business. Google, the industry’s leading search engine now combines local reviews with their search results for many types of local searches.
Here is an example of a Google search for Chiropractors in Scotch Plains, NJ. Notice that the listing for Leventhal Family Chiropractic, which I highlighted in yellow, has a consumer review linked to it. This is an organic result and requires no purchase of keywords or any other special fees. It is totally FREE. Google combines social content to their organic search results in order to maximize the value of their results to consumers. This is a great opportunity for quality local businesses to promote themselves in the most credible way and at no cost!
But before we get too excited, it is important to remember what makes word of mouth referrals so effective in the first place. People are influenced by personal referrals or word of mouth because they know and trust the person making the referral. They also trust the referral because they know that it is objective and the person is not being compensated for providing a favorable review.
Now here is where today’s crop of consumer rating and review sites have real issues. Because anyone with an email address can rate any business there is a lot of abuse. Today’s ratings sites have little or no means of authenticating individual reviews. Their sites have literally created an open season for unscrupulous businesses to write fake reviews on competitors and their own businesses. And of course you have a flood of fake reviews that are created by individuals who often are compensated by the review sites to create review content. The problem has risen to the attention of the U.S. Federal Trade Commission, (FTC) who recently published new guidelines on this topic to address the growing concern of misleading endorsements.
The effectiveness of your online reputation is directly linked to the authenticity of the review and the transparency of the review site. If consumers have to question the authenticity of the reviews, then its influence is greatly diminished.
Trust FX recognizes that for natural online reputations to reach their full potential as an effective small business marketing strategy, consumers must trust the authenticity of our reviews and the transparency of our rating system. We achieve these goals with our patent pending system. A unique key is given to each customer by participating businesses at the time of sale. The key is required to give feedback
Andrew Ward
Chief Trust Officer
Trust FX
Diana Ransom wrote a good article in the Wall Street Journal “As Online Reviewers Grow, Businesses are Listening” about the rise of consumer reviews and their impact on local purchase decisions.
According to Comscore 4 out of 10 people now use the Internet to research products and companies online before they make a purchase offline. The bottom line is that small businesses in every part of the country need to be acutely aware of how they service all of their customers all of the time. Today’s consumers are increasing making decisions based on what your customers are saying often without your knowledge or participation. This can be a very cost effective marketing strategy for small businesses because consumer reviews attract local customers who are ready to buy and value competent service.
Consumer ratings and reviews are not just for businesses in urban areas but they are quickly becoming as ubiquitous as the Internet itself. Every business needs to be aware of what their customers are saying online. At minimum you should set up a Google alert for your business name and perform routine searches on your business name.
Welcome to Trust FX.
Here you will find my thoughts on the importance of trust. Trust is a word that is used often. We hear it in sales pitches and advertisements every day. However, trust me is like the word FREE. Free gets our attention, but more often than not free has to be paid for! As important as trust is to consumers and businesses, it is amazing how empty the words “trust me” can sound.
I believe that all businesses can be divided into two basic groups – those who consistently satisfy their customers and those who don’t.
Most people prefer to use the former; however, it is often very hard or impossible to tell the difference. Both types of businesses can have impressive references. Both types of businesses can come across as sincere and can often back up their promises with written warranties. Both types of businesses can even have a clean history (no complaints on file) with the Better Business Bureau.
The reality for most people is that it is hard to perform significant due diligence on most small businesses. In fact, most of the time we need to rely on the business that we are evaluating to provide references for us to check! A bad experience always results in aggravation and loss of time. At other times, a bad experience will cost you money. Sometimes choosing the wrong business can even place the health of you or a family member at risk.
The above scenario is the basic problem that TrustFX aims to remedy.
The only credible predictor of how well a consumer will be satisfied with any business is to measure how well a business takes care of their existing customers. That is what TrustFX does. We provide a simple way for any business to put their reputation into the hands of their customers. Not just some customers, but every customer. The results that we collect are used to create a TrustFX score that is updated monthly and published at www.trustfx.com.
When a business puts their reputation on line, they have to try harder. They have to set an accurate expectation. Setting proper expectations requires the business to understand your needs. Sometimes is means that a business needs to turn away customers where there isn’t a good fit.
People often ask the question, why would a business put their reputation at risk? For businesses that have customer satisfaction issues, the answer is they won’t. But for quality businesses that can and do satisfy their customers consistently it is great tool for attracting prospects and converting those prospects into customers. I invite you to read Glen Urban’s paper “The Trust Imperative”. His research shows that a trust-based marketing strategy provides businesses with superior financial benefits including the ability to attract and retain great employees and reducing the cost of attracting new customers.
A business’s Trust FX score, developed over time, is the single most effective indicator that a consumer has to measure the trustworthiness of any business.
In order for ratings to be credible, the system that creates them must be credible and that is where Trust FX is unique. Most sites allow anyone with an email address to rate any business, which results in a high percentage of reviews that are not authentic. Our process involves both the business and the customer. Businesses that use Trust FX, pass a unique key to each customer at the time of sale. The key insures that a transaction took place (we can audit this process). A key is required to use the TrustFX rating system and each key can only be used to rate the business that issued it.
It is my pleasure to serve you with Trust FX.com, but it is your individual contribution and participation that makes this site valuable for all.
Andrew
Founder and Chief Trust Officer
Trust FX
