Reviews on Web opinion sites found to boost businesses

It was an impressive track record.

After nearly a year in business, Pico Madama Beauty and Hair Health Salon on West Charleston Boulevard had racked up unanimous five-star reviews on ratings websites such as Yelp, Google Places, Citysearch and Insider Pages.

That streak ended in December, when someone dropped two stars, without explanation, on Pico Madama's Google Places page.

"I was like, 'Oh, no!' For us, trying to establish a new brand and a new concept, we felt these reviews were really important," said Scott Seidewitz, who co-owns Pico Madama with his wife, Beli Andaluz. "It was really important to us to make sure we didn't have any unfair reviews."

Online feedback matters more and more to businesses as consumers increasingly use those comments to choose goods and services.

A 2010 study from e-commerce software company ChannelAdvisor found that customer reviews influence more than 80 percent of holiday shoppers. A high product rating also boosts the probability of a purchase among 55 percent of consumers, market research firm eConsultancy reported in 2010. And a 2009 survey from ratings service Nielsen Online revealed that Web surfers trust Internet recommendations from unknown consumers more than ads on TV and radio or in magazines and newspapers.

Brent Franson, senior director of advanced client solutions for public-image consultant Reputation.com, pointed to a Harvard Business Review study showing that every ratings star moves a company's bottom line by more than 10 percent.

"Online reviews are massively important. They're the first impression of a business," Franson said. "And as consumers become more savvy and seek this social feedback, these reviews are going to become exponentially more important."

Jon Perry, vice president of Las Vegas security company Sting Surveillance, knows just how key online comments can be. He recently chose a carpet cleaner based on Internet reviews. In early January, Sting itself jumped into the fray, crafting plans to up its presence on review sites.

"Word of mouth is the best marketing," Perry said. "People telling other people that you did a good job is always going to be the best lead you'll ever get."

But online reviewers don't have to give their real names or disclose relationships with a business they're commenting on. So are those leads reliable?

That depends who you ask.

TRUE OR SKEWED?

Thanks to human nature, you can't trust online reviews, Franson said. Seventy percent of Internet feedback is positive, mostly because reviewers have a vested interest in leaving a good write-up. Perhaps they're friends, family or employees of the owner.

What's more, consumers who aren't personally connected to a business are more likely to post a negative review. That's human nature: If your cheeseburger tastes good, you probably won't bother to comment. If you're the one in 100 with a hair in your burger, you want to tell everybody, Franson said.

"Online reviews are often not an accurate representation of a business as a whole," he said. "You get disproportionate negative-to-positive feedback."

And that's before you throw in competitors out to smear a business.

That's what happened to Pico Madama.

Seidewitz wanted more information so he could fix any customer-service issues, but he couldn't find the reviewer's name on his client list. But he found the same person had two-starred six other nearby salons, all on the same day and all without comments -- with one exception. That salon won five stars and an extensive, glowing review of a specific stylist.

Seidewitz notified Google of the questionable reviews and also confronted the owner of the five-star salon, asking him to remove Pico Madama's low rating. It soon disappeared.

And then there are the businesses that pay for reviews, an illegal practice that violates terms of service for bigger websites. Todd White, CEO of Platinum Entourage, a beauty salon in southwest Las Vegas, said some of his competitors give a $20 discount to customers who write online reviews.

The Federal Trade Commission requires that businesses disclose relationships with product promoters, and is now investigating a business that offered a $2-per-star rebate for a product sold online, The New York Times reported in January.

"Advertising disguised as editorial is an old problem, but it's now presenting itself in different ways," Mary Engle, the commission's associate director for advertising practices, told the newspaper. "We're very concerned."

'100 PERCENT HONEST'

Yet, online reviews have many advocates, including Seidewitz and White.

Pico Madama's positive reviews have helped drive business to the salon, which uses technology to evaluate the health of clients' hair and tailor treatments accordingly, Seidewitz said.

And half of Platinum Entourage's business comes from online reviews, said White, who considers Internet comments "100 percent honest," whether positive or negative.

Executives with Yelp and TripAdvisor said they make an effort to boost the reliability of their reviews.

"We take the authenticity of our reviews very seriously and have numerous methods to ensure the legitimacy of the content on TripAdvisor," company spokesman Kevin Carter said. "We also know that our users approach TripAdvisor with common sense, and make an educated decision based on the opinions of many."

At Yelp, consumers gravitate toward reviews from established users, said Darnell Holloway, manager of local business outreach. Yelp discloses the number of reviews a user has posted, and how positive or negative they were. That transparency helps build trust.

"Consumers are pretty savvy. We've found that most users on Yelp tend to look at the big picture," Holloway said.

Both sites encourage flagging suspicious reviews for investigation, and have teams who study questionable content. They also filter reviews. Neither company would describe in detail how they screen comments, but White said Yelp's system looks carefully at first-time reviewers.

Rhea Drysdale, CEO of New York-based Internet marketing company Outspoken Media, said well-established sites including Yelp, TripAdvisor, Google Places, Zagat, UrbanSpoon and attorney site Avvo.com use algorithms to evaluate factors such as multiple reviews from the same location, or if a user has posted only one review. The codes give preference to users with a history of "reviews that have been measured as qualitative by other members of the community," she said. Smaller sites have fewer advanced spam filters and are tougher to trust, she added. And specialty service providers, including doctors, lawyers and locksmiths, are especially vulnerable to spamming from competitors.

Still, Drysdale said online reviews are accurate "most of the time."

The rest of the time, it's consumer -- and business -- beware.

SIGNS OF AUTHENTICITY

Shoppers using review sites should stick with well-established pages and look at the posting history of reviewers. Also, look for other indicators of a genuine profile, such as a photo of the poster along with any comments. Drysdale also advised giving more weight to star ratings when tens or hundreds of reviews are involved, because averages mean more with bigger numbers.

Businesses have a trickier time surviving the world of online reviews.

Many companies are loath to ask for reviews that could help them online. Both White and Seidewitz said they've resisted employee advice to promote Web reviews.

"My personal opinion is, it's pushy. A review is like a tip -- you don't ask for it," White said. "If you do good work, it'll happen."

Added Seidewitz: "Beli and I really feel it's just not right. The review should be an honest statement of someone's experiences in the salon. I think the result is that we have fewer reviews than other salons, but those reviews are all five stars over a year."

Sting has few online reviews, but execs want to change that. They recently started asking customers via monthly billing statements and emails to "please feel free to give us reviews at any of your preferred sites," Perry said.

"Tell us the good stuff and the bad stuff, too, because that's how we get better," Perry said.

That's the approach most industry experts recommend.

Franson, of Reputation.com, tells clients to ask patrons for "candid, honest" reviews online. The company also helps track ratings to determine if they're trending up or down.

"Be proactive about this," he said. "You don't want to allow this to organically be whatever it is, because the propensity of people is to go out of their way to review when things are negative, and to not review when things are positive or go as they expect."

Also, put up signs saying that you're on review sites, so customers know they can review you there, Drysdale said. If 40 percent of your customers use Google's Gmail service, let them know you're on Google Places. Some businesses host "Yelp nights" and ask members to sample a new menu or service. That's fine, as long as you're not giving freebies or discounts, she said.

"If you're not comfortable with promotion, it's tough," Drysdale said. "There's this idea that you don't have to do anything if everyone loves you. But some businesses do a really good job, and no one hears about it.''

Plus, when a business has fewer reviews, those comments tend to skew negative, said Wendy Moe, a University of Maryland professor who studies online behavior. So it's imperative to pump up the volume.

"The idea is to get more people online talking about your product," Moe said. "You want to get those numbers up and get more of a cross-section. That way, you'll naturally get more of the positive people involved."

And when you do run into an especially negative poster, don't fret too much.

"Companies need to be careful to not overreact to complaints online," Moe said. "You don't want to give the complainer's voice too much weight when your happier customers are not necessarily chiming in."

Contact reporter Jennifer Robison at
jrobison@reviewjournal.com or 702-380-4512.