Should you or shouldn't you let your own customers review your products and services on your own website? Only about 50% of online retailers currently do. This is the question we'll explore in this post.
In Part One of this story, we pointed out how deceitful Nero Software is in the way it cons money out of unsuspecting customers. My feeling is that making money off of customer mistakes or customer naivete is never a very good business strategy, in terms of creating long-term shareholder value, and I predict that as long as Nero follows this strategy, we'll never see it amount to much more than a non-US-based peripheral player in this category.
At the end of Part One, I shared with you the negative customer reviews carried on Newegg.com. Newegg is an online software retailer, and many of these reviews were posted by customers who had bought this bad software from Newegg itself. But the mere fact that Newegg customers were able to voice their honest concerns says a lot about Newegg's credibility as an online software retailer. It helps that Newegg is apparently very attentive to its customers' service needs. In reading through the reviews, you can see that while customers don't have much truck for Nero, they think Newegg is super. The same highly negative reviewer I quoted in Part One concluded his rant about Nero with the words "Newegg is Great!"
I saw a few other sites where customer reviews were NOT carried, and some where they were carried but not given much visibility. On most of these Web sites, the online retailers themselves rated the products, and these reviews differed markedly from the more honest "warts and all" approach of real customers.
The honest customer reviews I found on Newegg contrast starkly, for instance, with the not-so-honest product review I found at Top Ten Reviews ("We Do the Research So You Don't Have To"). On this site the Nero software was given an absolutely glowing review, an overall 4 out of 4 rating! Knowing this now (and in the social media world, this kind of thing can no longer be kept secret!) why would any rational customer ever trust Top Ten Reviews for any product at all?
Studies show that when honest customer reviews are hosted by an online retailer, the credibility of the retailer's site increases, and more purchases are transacted. A recent article on Forbes.com reviews some of this research, and it's highly persuasive. Allowing negative reviews to be posted on your site gives your marketing efforts credibility, making you inherently more trustworthy in the eyes of your customers. If you've ever done any online shopping yourself (and who hasn't?), you probably already know this. At least for myself, the first thing I look for when I need an honest point of view is whether any of the reviews are negative. If they are 100% positive, I move on to the next site.
There are other benefits to hosting more honest customer reviews, as well. For one thing, negative reviews tend to set more realistic expectations in customers' minds, and reduce the volume of product returns. In addition, allowing negative reviews to be posted provides an excellent mechanism for uncovering complaints and other issues that otherwise might never come to your attention. Again, it's a well known axiom of customer service that a complaint handled competently and expeditiously can often turn a complainer into a raving fan.
But the biggest single benefit of hosting honest customer feedback is that it will permit your firm to participate more fully in the social media revolution that is already dramatically transforming the way commerce will take place. Only 14% of customers trust advertising, but 78% of them trust their peers. In other words, only 14% of consumers are likely believe Top Ten Reviews' description of Nero, but 80% of consumers will believe Newegg.
In the social media era, transparency is everything. Allowing your own customers to post their opinions for other customers to see is one of the most important steps you can take toward the level of trustability required to sustain your brand.