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The power of the online product review

Marketplace Staff Jan 18, 2011


Kai Ryssdal: The thing about the Internet age is that there’s no place to hide. Even if you opt out of Facebook or you don’t Tweet, it’s still not going to be all that hard to find about you online.

The same is true — to their occasional chagrin — for businesses. All the service and product review sites out there have given consumers a way to fight back against corporate America, or praise it, as the case may be.

The government’s stepping in. The Consumer Product Safety Commission opened registration for an online database of consumer complaints today. Sally Herships has more.

Sally Herships: James Lindsey and his son Haakon own Haakon’s Hall, restaurant and bar in Manhattan. Like any other business owners, the Lindseys appreciate word of mouth. Their restaurant has almost 60 reviews on Yelp and 3.5 stars. But Haakon Lindsey says there is a downside: amateur reviews aren’t always thoughtfully written. Especially the bad ones.

Haakon Lindsey: ‘I didn’t like the way the waitress looked.’ Or one of our bartenders being kind of an older guy.

The restaurant cost almost $2 million to open a couple years ago. But it hasn’t turned a profit yet. So the Lindseys are doing everything they can, including paying attention to online reviews.

James Lindsey: A bad review can cost you $10,000 a month. A few bad reviews can put you out of business, your whole investment is down the drain.

Haakon Lindsey: It is not uncommon that if we’re in a dispute with a customer, they’ll tell you, ‘You’re gonna hear about this on Yelp.’

And that’s just your typical consumer reviewer. Then there are the big guns — bloggers. Like Heather Armstrong. She’s a mom-blogger in Salt Lake City, Utah. A couple years ago, she and her husband had a new baby, and a new $1,300 Maytag washing machine.

Heather Armstrong:That broke within three or four weeks of purchase.

Armstrong says sometimes it worked, but most of the time, she just got an error message.

Armstrong: When you have a newborn child, there’s a lot of dirty clothing. So it was just an awful mess that I didn’t want to live in anymore.

Armstrong did everything an appliance owner is supposed to. She had a 10-year warranty. She’d called customer service — even corporate headquarters. But after almost three months, she decided she’d had enough. So she hit the Twitter site, and started typing in all caps.

Armstrong: ‘Don’t ever buy a Maytag washing machine. Our Maytag washing machine is broken. Someone’s been out to fix it three times and it’s still not working.’

Here’s what you need to know: Armstrong has 1.5 million followers on Twitter.

Herships: Do you think you were Maytag’s worst nightmare that day?

Armstrong: Yeah, I do.

And a couple of days later, her machine was finally fixed. Maytag wouldn’t talk to me on the phone, but the company emailed to say the experience help improve its online customer service.

For businesses right now, the landscape of online reviews can feel like the Wild West.

David Lazarus: Except instead of carrying a Smith and Wesson or a Remington, you’re carrying a blog.

David Lazarus is consumer columnist at the Los Angeles Times.

Lazarus: There are many, many corporate executives whose job it is, among other things, to monitor these sites, look at what’s being said and respond.

But now the sheriff is coming to town. Well, the U.S. Consumer Product Safety Commission. Today the commission is starting a soft launch of its new online product safety database. It’s not for product reviews. The database will only list product recalls and complaints about safety and health hazards.

Lazarus: The business world is freaked out because they see this as a potential dumping ground for any sort of gripe a consumer can muster.

And remember, that complaint would be listed on an official government site. But the content will still be written by consumers.

So what should businesses do when faced with bad feedback online? Angie Hicks is founder of Angie’s list, a service review site for consumers. Hicks says no one likes criticism. So if you’re a business on the receiving end of some, the first thing to do is take a break.

Angie Hicks: Don’t just instantly respond because sometimes you’re first instinct is not going to be your best instinct.

Next, she says, focus on criticism you can actually do something about. Which is what restaurant owners James and Haakon Lindsey are doing. They’re renovating, getting rid of table service and only serving food at the bar or counters. It’s expensive, but they hope the changes they’re making will help them cut down on bad reviews.

I’m Sally Herships for Marketplace.

Ryssdal: Starting today, businesses will be able to register with the new database. Just visit www.saferproducts.gov.

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