From the Editor – July 2019

July 2, 2019
From the editor typed on a piece of paper on a desk with a laptop and a person with a pen and paper writing.

A few months ago, my wife and I looked for lodgings in a city we’d never been before. I wound up booking a hotel online, rather randomly, from a long list of what I thought we could afford – not at the high end, not at the low, just sort of “reasonable.” A week or two before leaving town, we decided to check the online reviews to see if I had made, yet again, another bad vacation decision, based on too little information and too much faith in my ability to shop wisely.

The reviews – and there were lots of them – ran the gamut from a “great deal” to “never again” and certainly gave us some cud upon which to chew. In the end, we went ahead and pretty much found that almost of all of what we had read, we experienced – the good, the bad, and way too low ceiling. So, I’d have to say in hindsight, that checking out what our traveling predecessors had to say was worth the effort. (Although, I still would have to strongly disagree with Ida, who said that the buffet breakfast “had good choice.” It didn’t.)

In reading the reviews to vet our options, we became part of the 82% of Americans who “sometimes or always read online reviews for new purchases,” according to the Pew Research Center, and part of the 51% who believe that “they’re generally accurate.” Other surveys have put both numbers even higher. In fact, if you don’t read online reviews, today, you represent a very small minority. Most of us agree that it makes sense before buying something to seek reassurance that our picks are worth the cost.

And marketers know that very well. All the data show that positive customer reviews boost sales, while encouraging customers to spend more. A study by Harvard Business School determined that just one additional star ranking in Yelp increases the revenue of a restaurant by five to nine percent. And negative reviews make and an even stronger impression upon our buying decisions.

The problem arises when the reviews are not real.  And a problem, it is. It is estimated that as many as 15% of all reviews online are fraudulent, and the rate is significantly higher for the most popular platforms, such as Amazon, Yelp, or eBay.

Why are there so many fake reviews online? Because ratings are so influential, businesses have incentives to cheat. And buying them is both cheap and effective. So, they pay people for submitting fake reviews. Some companies pay to get more positive reviews about themselves; others pay for negative reviews of their competitors. Some reviews go for as little as $5 a pop. The cost of fake reviews varies from platform to platform and brand to brand, but in all cases, the investment pays off. And the outcome is the same: consumers are given false information.

To be fair to some of the major review sites, they are aware of the problem and are trying to dislodge phony write-ups, which they see as a threat to their credibility. Yelp deploys algorithms to sift through reviews, filtering write-ups that look overtly promotional, mention a rival business, or exhibit other red flags. Amazon, which has been dogged by complaints of promotional reviews, is also trying to crack down on fakes. The company has filed lawsuits against sites that offer sellers a way to buy four- and five-star reviews. It’s also suing more than 1,000 people who allegedly wrote some of those $5 cheat sheets.

Meanwhile, if you are part of the 48% of Americans who believe it is often hard to tell if online reviews are truthful or unbiased, vigilance is of the utmost. Stay away from reviews that are extremely negative or super positive – they may have been sponsored by a brand itself or its competitor (in case the reviews are bad).  And, look at the time frame. If you see lots of entirely positive/negative reviews posted over a very short time, you shouldn’t trust them, either. In most cases it’s an indicator of a troll, or a crowd-marketing, campaign. So, toss out the high end, and toss out the low. It’s always wiser to stick with the “reasonable.”

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