Last month, D.C. contractor Dietz Development made news when it filed a $750,000 Internet defamation lawsuit against its former customer, Jane Perez, for negative reviews she posted on Yelp and Angie’s List regarding renovation work at her home. The company claimed the reviews, which alleged that Dietz did not complete its work and stole jewelry from her home, sent customers fleeing, resulting in $300,000 in lost business.
While Dietz won an initial judgment ordering Perez to remove some of her accusations and not post other reviews while the lawsuit is pending, both the ACLU and Public Citizen have since joined Perez in defending what they say is her First Amendment right to free speech.
As we all know, local businesses face high stakes when it comes to online reviews. According to a BrightLocal study conducted last year, approximately 72% of consumers surveyed said they trust online reviews as much as personal recommendations, while 52% said that positive online reviews make them more likely to use a local business.
Yelp, along with its competitors, is already used by millions of customers to evaluate local businesses: the site receives an astounding 84 million visitors a month. In fact, a Harvard study conducted in 2011 found that a one-star increase among Yelp reviews of Seattle restaurants led to 5-9% growth in revenue.
Given the impact negative reviews can have on a company’s online reputation, it’s not surprising that businesses like Dietz are beginning to take legal action when they feel they are unfairly targeted or falsely misrepresented by customers. I’m not a lawyer, but it does seem that there could be some merit to Dietz’s claims.
Media coverage has also shown there is at least some precedence for businesses winning similar cases with large financial rewards, although these cases tend to be very fact-specific and dependent on laws that vary by state. The involvement of the ACLU and others now demonstrates the significance of this case in setting a precedence for what options local businesses have available to them in responding to negative reviews.
That said, the damage that Perez’s reviews have had on Dietz’s reputation cannot be amended by a possible positive court decision. In fact, as Dietz’s experience since filing the lawsuit shows, the long-term consequences of its proactive legal response will be much more troublesome than if the business took a more measured approach focused on addressing Perez’s concerns.
Even if a new precedence favoring businesses is established by a positive ruling in favor of Dietz, local businesses will have a tough time using the law to their advantage.
Below are five tips to consider when responding to negative online reviews, which take into account lessons learned from Dietz’s approach.
1. Prevent Customers From Being Compelled To Write Negative Reviews
You should make every effort to prevent customers from getting to the point of writing a negative review. Running a business isn’t easy, and no matter how well it is run, there will always be customers who are unhappy with the product or service provided.
Some of those customers will inevitably turn to online review sites to voice their frustration, whether with the intent of warning potential customers about the business practices, damaging the company’s reputation out of spite, and/or working to receive a response from the business that could include an invitation to revisit the work or provide a discount or refund.
However, in my experience, especially with service-oriented businesses, the consumer almost always contacts the business first before resorting to venting online. This is an opportunity that is critical to seize – customers tend to post online after they feel they are past the point of resolution.
Especially with difficult customers, a local business should keep the customer engaged and work to accommodate feedback it receives before a negative review is posted.
This can be done through a variety of methods including speaking with the customer in person, by phone or via e-mail. In most instances, staying positive, reassuring the customer that their concerns will be addressed, and reaching some sort of compromise – even at the expense of the business – is preferable to the negative word-of-mouth or online reviews that can result when a customer feels they have no other options available to them.
These reviews, which live online indefinitely, can over time cost business in an amount that far exceeds what would be involved in proactively remedying a customer’s complaint.
While the lawsuit’s account of the disagreement between Dietz and Perez demonstrates a complex situation, it’s clear that some sort of misunderstanding over the work being performed occurred that eventually spiraled out of control, resulting in unpaid invoices, legal action by Dietz to receive payment, and eventually Perez’s negative reviews (see below).
Even if Dietz’s account of the facts is true, working with Perez to address her concerns at the offset, and perhaps even cutting his losses at that point, likely would have prevented the chain of events that led her to place unfavorable online reviews.
The reality of today’s social media-centric environment is that the customer has the upper hand in disputes with local businesses. Many customers recognize this new power and use it to their advantage. The cost of addressing customer concerns before they reach the online space should be viewed by businesses as a necessary and justified expense to protect their digital reputations.
2. Cool Down First, Then Write Private Response
As Yelp notes in a blog post about how businesses should respond to online critics, a natural response by local businesses to negative reviews is to get emotional and overreact. This often comes in the form of lengthy public responses that dive into the weeds of disputes – turning simple matters into exhaustive and humiliating “he said-she said” debates.
Consumers usually side with the reviewer, who is often perceived as the “nothing-to-gain” victim facing a profit-focused business owner. While consumers expect local businesses to show a more personal side in how they speak with customers, there is little sympathy for defensive and unprofessional responses.
When responding to negative reviews, businesses should first take a deep breath. They should evaluate the customer’s complaint and determine what has or can still be done to address their issue. The business should engage the customer with a short and positive private response – either through the online review platform or via e-mail – that recognizes the customer’s issue and discusses ways to remedy the situation.
By trying to take the issue offline, the business is working to prevent a back-and-forth that could draw even more unwanted attention to the review. If successful in resolving the issue offline, the business can then politely ask the customer to revise their review to note that their complaint was addressed, or delete it altogether.
In the case of Dietz, the situation with Perez had deteriorated so badly by the time of her postings that reaching out to her would likely have been in vain. But as a general practice, it is best for businesses to try to resolve negative online reviews privately.
3. If Review Remains Unchanged, Evaluate Public Response
There are two scenarios where a local business may be compelled to issue a public response to a negative review. Yelp, Angie’s List, and other sites all allow for businesses to easily offer their views.
First, there’s the possibility that the issue is successfully resolved with the customer, but that the customer does not change or delete the review. In that case, it makes sense for the business to respond that it was glad to successfully address the customer’s concern. If appropriate, it may make sense to include what steps the business took (e.g., a discount was offered, a replacement product was provided, etc.).
Second, there’s the possibility that the customer remains unsatisfied, yet the business believes there are legitimate inaccuracies with claims made in their review. In that instance, a local business can offer a short response that corrects the facts, but should not delve into specific inaccuracies.
The ability of the local business to maintain the high road and appear conciliatory to customer concerns is more important that establishing its side of the story. As mentioned earlier, the customer will more than likely win any argument about their experience.
It doesn’t appear that Dietz publically addressed Perez’s comments, which was a missed opportunity to correct several basic inaccuracies it believed were contained in her postings. These responses would have been viewable by customers reading the reviews and helped to mitigate their impact on the business.
4. Legal Action Is Last Resort
Taking legal action should be your last resort as lawsuits are unpredictable and wins can have negative consequences. It is logical to assume that winning a court decision to have Perez’s posts removed from Yelp and Angie’s List would help Dietz restore its online reputation.
Instead, publicity over the lawsuit has dragged the company into dangerous territory that will be very difficult for it to recover from, no matter the litigation’s outcome.
The current first page of Google search results for [Dietz Development] says it all. Mixed in with Dietz’s Yelp, Facebook and Angie’s List pages are several articles from top news organizations including ABC News and the Daily News, detailing Perez’s claims and the company’s lawsuit.
Whether or not Dietz wins its case, the mere presence of media coverage alleging that the company provided bad service and that it tried to remove customer reviews are two red flags to consumers researching the business.
Before, the allegations about Dietz were simply one-off customer reviews. Now, these allegations are legitimized by Dietz’s “heavy-handed” legal response and attention by top-tier media. Potential customers will likely fear that if they, too, have issues with Dietz, they will not be able to freely voice their frustration without the risk of an expensive lawsuit.
Dietz has also opened the doorway for users of online review websites to continuously target its business even if they have not used its services. While no longer visible on its Yelp page, Dietz initially received several poor ratings following the lawsuit filing, according to ABC News.
One reviewer from Utah wrote, “Whoa! this company sued one of their customers for $750,000 over comments she made on Yelp. It makes me almost nervous to post this negative review.”
As of this writing, the only Yelp review on Dietz’s page came from someone out of state who said that users should, “Avoid this place at all costs.”
It will be difficult and costly for Dietz to continuously filter its online review pages and take action against posts it believes are inaccurate or unfounded. Taking legal action on an ongoing basis will not be a viable solution. (It’s also unclear where two positive reviews previously posted on Dietz’s Yelp page have gone; both have been deleted. That isn’t good, either.).
5. Encourage Positive Reviews To Offset Negative Reviews
Encourage customers with positive experiences to post positive reviews to balance the negative reviews. It’s much more likely for a customer with a bad experience to take the time to post a review than for one with a positive one to share their feedback.
So, local businesses should be more proactive in encouraging customers happy with their products or services to say so publicly on online review sites. Good reviews will help to offset bad ones, and make consumers less likely to consider the latter as being credible.
One way local businesses can approach this is to e-mail customers following an order or a service and ask them to share their feedback. Another is for businesses to feature links to their online review pages on their websites and social media pages.
If the business does a good job, it’s more likely that a customer will be willing to take the time to post a review. The customer just might not be aware or have the initiative to do so without a little prodding. Even a low response rate is acceptable, given that most businesses, hopefully, have a much larger pool of happy customers!
Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.