Are We Entering a Reputation Economy?

Anyone who’s ever bought anything from eBay will be familiar with the concept of leaving Feedback when you buy something. Likewise, the importance of checking that the goods that you’re buying come from a reputable seller is also well understood. Another site with a strong culture of feedback is Amazon, which has feedback for its marketplace sellers, along with a review system that’s in place for all of its products. Almost every retail website has put similar systems in place, meaning that each time you browse the web you are confronted with an array of stars representing how well trusted someone is, or how well liked a product is.

reputation economyPublic online feedback for businesses has been slower off the mark though. Although many businesses will post customer testimonials on their sites, most businesses haven’t opened up their own websites for customer reviews. With Social Media opening up the web, and people becoming used to writing whatever they want about any subject they choose the trend has started to change, and businesses of all kinds are finding they have been reviewed left, right and centre.

If you’ve had great service from a Solicitor, Accountant or Beauty salon, why not go online and leave a review? Recommend the business to your friends, family and the general public. If you can’t write it on the business website, then use Facebook, Twitter, or even better, find the businesses listing somewhere like Yell, Qype or Thomson Local.

Consumers love reviews, in fact the Local Consumer Review Survey (2012) said that;

approximately 72% of consumers trust online reviews as much as personal recommendations, while 52% said that positive online reviews make them more likely to use a local business.

But it’s not just positive reviews that people leave. There are countless negative reviews that have been left, with many of the businesses on the receiving end unaware that the reviews are there as the review doesn’t link back to their sites.

Google is now adding reviews and a star rating to its business listings as part of the search result. The difference with Google, is it’s aggregating reviews and feedback from any number of directory sites and showing them all in one place.

But what does this mean for businesses?

So far, it seems that there are only a few businesses that have paid attention to Google’s changes, and even fewer to embrace the ratings system and use it to their advantage. The difficulty for many businesses seems to be that as customers can leave their reviews almost anywhere and Google will still find and aggregate them. This means that negative reviews can literally appear overnight, in the public domain, and the business that has been reviewed could easily be the last to know.

Reputation has possibly never been more important, or more valuable. If the statistic above is to be believed, then the majority of consumers will trust an online review from a stranger rather than look at a business with no reputation at all.

Some review sites allow their members to build credits or reputation scores each time they go back and leave another review. Systems like these that encourage people to come back and leave multiple reviews for different business and services that they’ve used also mean that leaving a review online is becoming increasingly popular, with some consumers even make a hobby out of their reviewing.

Up until now, reviews and scores for businesses have often remained hidden on whichever directory they were written on, even the business that has received the review may not have been alerted to their presence. The old reviews are unlikely to remain hidden for long, which begs the questions; do you know what’s been said about your business? And, perhaps more importantly, how much is your business’s public reputation worth?