Negative Online Reviews:Customers check “What’s the worst that can happen?”

Negative Online Reviews-StratoServeWinter Marketing Academic Conference(#WinterAMA16) involved  a lot of discussion about the impact of online negative reviews on customers. Researchers have been doing massive work with lots of data to examine:

Are negative reviews for your business catastrophic?

There is cheerful news for all organizations who feel bad about a few negative reviews out there. Now, there is data backed evidence that a few negative ratings and reviews don’t hurt you as much as you would expect.

Think back of the times you have looked at reviews. If a product or service has:

  • a few 5 star ratings
  • many 4 star ratings
  • some 3,2 and
  • a few 1 star ratings

What do you do? Particularly if you otherwise find the offering attractive. That is the price is right and the quality appears good. You want to look at the 1 and 2 star comments to check

If  I went with this, what is the worst that can happen? Can I live with it – if the worst comments come true?

Loss aversion theory by Tversky and Kahneman (Kahneman won the Nobel Prize in Economics in 2002)  explains this kind of behavior. People are loss averse i.e. want to avoid losses than necessarily look for gains. Loss aversion theory suggests that you would prefer to avoid a $5 surcharge than get  a $5 discount.

People think that the 5 star ratings might be fake. Thus Amazon has verified ratings to overcome such skeptical thinking. People also realize that customers remain silent/offer no feedback  most of the time. Only those a) unhappy with their experience  and b) active online  tend to write angry comments online.

So here are three tips to deal with negative online reviews:

  1. Reply and make right: Some forums and platforms will allow you to respond to customer comments. If they do, try to respond immediately.To diffuse the situation, a quick response to negative comments can help.If the review platform does not allow responses, consider writing to them to allow you to respond. This does require tracking social comments analytics to keep track of comments as soon as they appear.
  2. Correct internal processes: If one person complained there are at least several others who faced the same situation but did not feel as bad. Try to review and reconfigure your delivery process so that the cause of dissatisfaction is eliminated.
  3. Negative ratings make your brand look real: A few negative ratings are fine. They make your brand look real. Don’t deny negative ratings within the organization and make a concerted team effort to improve things. Generally if the majority of the ratings are positive – no business is lost.

Happy Leap day (Feb 29,2016) to our readers!

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