The House and the Senate recently passed the Consumer Review Fairness Act, a piece of legislation designed to protect the right of consumers to leave honest reviews of businesses online, even if that feedback is negative. While the legislation is designed to protect consumers, it is also a very strong testament to the power of a business’ online reputation.
Why Online Reviews Matter
Online reviews of local businesses and services are a powerful tool for consumers that have significant influence over their purchasing decisions. According to a survey conducted by Dimensional Research, 90 percent of consumers who read online reviews claimed that positive online reviews influenced buying decisions, while 86 percent said buying decisions were influenced by negative online reviews. Other research suggests that as much as 90 percent of consumers read online reviews and 88 percent trust these reviews as much as personal recommendations. In other words, online reviews matter… a lot.
Keeping Businesses in Line
With the recognition that the online reviews and comments made by customers can significantly affect sales, some businesses have been trying to take matters into their own hands- by force. Some companies hide so-called non-disparagement clauses in the fine print of their Terms of Service and then go after consumers with lawsuits if they post negative feedback online. Other companies resort to threats. Consider the well-publicized example of the Union Street Guest House located in the Catskills that was called out for threatening guests with a $500 fee for every bad review that they left.
So, not only is maintaining the integrity of online reviews extremely important, but consumers need to be able to leave their feedback without fear of retribution. The Consumer Review and Fairness Act was created to address these issues.
What This All Means for Your Business
The new legislation not only protects consumers, but it gives them a great deal of power as well. It goes without saying that small business owners should be doing what they can to give their customers a positive experience. That’s the best method they can take to help ensure that their online reputation remains positive. But, when customer service or product quality issues do arise (which happens even to the best companies from time to time) making sincere efforts to smooth over the situation is now even more important than ever since the law is now on the side of the consumer.
All in all, while it was intended for consumers, the Consumer Review and Fairness Act can ultimately help motivate small businesses to be their best- both online and off.