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Is review management part of your organization’s marketing strategy yet? If not, this new research study from Cornell University might interest you into staying on top of those reviews.

Entitled “Cascades and Rating Games,” the study suggests that an early negative review is a “condemnation to death” – a description that illustrates just how online reviews can significantly affect local businesses.

Authored by researchers Oussama Fadil and Jake Soloff, the Cornell study sought to understand the mechanisms governing community-based review sites like Yelp, Google+, TripAdvisor, and even IMDb – sites whose ratings and reviews, the authors wrote, “have become so popular over the years (that) one can only wonder how they work and if they do at all.”

Bad reviews for young businesses: “condemnation to death”

According to their findings, which are based on mathematical analysis and simulations, customers who are not so sure about their own personal preferences or gut feelings tend to buy products and services that they do not like and leave negative online reviews.

If these customers happen to be among the first ones to post reviews of a young, fledgling business? Well, their harsh reviews might skew the overall rating and turn off other potential customers.

“At its early stages, a business is at the mercy of the subjectivity of its customers,” wrote Fadil and Soloff. “In theory, some businesses could die simply because they were first approached by the wrong customers; others could be overrated by similar mechanisms.”

These findings reaffirm the value and importance of online review management tactics, which allow businesses to stay on top of what customers are saying online, respond to online reviews, and build a better reputation by proactively requesting customers for feedback and generating (positive) new reviews.

The Cornell study implies that these tactics are particularly useful in the early stages of a business, when a negative comment on Yelp or TripAdvisor could easily scare potential customers away.

Rising influence of online reviews

Sounds like a small business owner’s worst fears?

Don’t worry. Young businesses that have the misfortune of receiving negative reviews early on can still turn it around. Wrote the Cornell University researchers: “In the long run, one would expect the online rating to converge to an objective measure of a business’ quality.”

Even at a time when industry observers have been quick to point out the slow growth of Yelp, the influence of online review sites cannot be denied. High ratings and positive reviews continue to attract consumers and shape their purchase decisions.

According to Fadil and Soloff, the overall rating of a business is seen as an objective factor. “Oftentimes, the online rating of a business is taken as a proxy for its objective quality rating. The underlying assumption is that by average ratings across users of varying tastes and preferences, dependencies upon said factors are eliminated.”

Also, customers who are more certain about their personal preferences and gut feelings are likely to enjoy a positive product or service experience. “By relying on accurate gut feelings,” the researchers wrote, “customers who decide to purchase (a) low-quality product will most often end up enjoying it and positively rating it.”

How do online reviews affect the way you market your business’ products and services? Have you embraced review management tactics to build your business reputation? Share your thoughts and experiences in the comment section below.

Migs Bassig

Migs is the Content Manager for ReviewTrackers. He's a creative writer who has helped numerous companies communicate more effectively online, and he loves sharing his local marketing knowledge to help brands and business succeed.

Discussion

  1. Alan Alan

    I don’t think one bad review can be much harmful. There will always be someone who will give bed review, no matter what you do. You have to let it go ask those who were satisfied with your product to give some good reviews.

    Reply
  2. Laney Pitt

    What if some who are competing with you start writing the bad reviews? I have heard that there were lots of those cases. I mean, it’s hard to flag them out. Often, you don’t have proof for that. And knowing that bad reviews can ruin you business at beginning, might be very useful for the competitors.

    Reply
  3. Tammyexperiments

    These are some though times for business owners. You cannot simply disable reviews, you are putting yourself at risk of being trashed for not letting people to comment and review your product, you can loose a lot if people wish to comment positively but on the other hand you are putting yourself into risk of being badly reviewed and ruined.

    Reply
  4. Karen Garcia

    I think that who wish to give you bad reviews are more eager to comment in the first place. It’s much easier to disappoint a customer than to make it energetic and eager to praise you.

    Reply
  5. Marnie Sho

    Perhaps the best possible way to avoid first negative reviews is simply to install some sort of gadget inside your store, or restaurant and to ask your customers if they are willing to give you reviews. Most of them, if asked politely, will give you good reviews.

    Reply
  6. Jacob B

    Those who advertise on twitter always seemed unprofessional to me. Twitter is just a bunch of tags and links you can’t really find anything there.

    Reply
    • Dandundun

      LoL, dude, You’ve missed the article.

      Reply
  7. Chris Green

    Exactly that is why new businesses should not be on online review sharing platforms. They should establish their business, get a customer base and promote first. Once that is done, they can open profiles on review sites and start encouraging buyer to leave review about their business. Even this way they will not be safe from 1 star reviews, but they will gather some 4-5 star reviews on regular basis as well.

    Reply
  8. moolahmachine

    So, the best solution is to ask your friends to give you reviews at the begging.

    Reply
  9. newmediaist12

    Early negative reviews can mean that you have enemies. I know a restaurant owner, I won’t tell his name because he is a friend of mine, but I still disapprove his actions. Anyway, a restaurant had opened near his. It was much better restaurant than his, too. And, he appointed people to give bad reviews to the competitor’s restaurant.

    Reply
  10. Kyle

    This problem could be easily solved if review websites made it so that new businesses start with a 5 star rating. In case the business is bad, it will quickly be made visible by bad reviews despite the positive start and if the business does indeed deserve a 5 star rating, a single ill-timed bad review won’t cause as much damage.

    Reply
  11. Doyle

    Early bad reviews are always good constructive methodologies in making an Enterprise / business know what is going right and what is not ! It gives the edge in understanding the customer and make the offerings better

    Reply
  12. socialanim00

    Learn what people want in the first place to establish yourself as a business. Do a survey, ask people, get a first hand analysis of your idea even before you plunge in and get shut by reviews.

    Reply

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