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.

Related Topics: Channel: Local | Local Search Column

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About The Author: is president of the Local Search Association, leading the best local search marketers who deliver cutting-edge solutions spanning digital, print, mobile and social media that help local businesses succeed. Follow @LocalSearchAssn on Twitter.

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  • http://umain30.com/ Main Uddin

    Why we run behind negative reviews if our product(s) has the creativity magnificence and useful ness then automatically customers will come and pay their dues and order for upcoming . [my own view ]

  • http://www.facebook.com/keenan.m.daniels Keenan Daniels

    People leaving false reviews on businesses should be sued and the safe harbor provision needs to go too, thus holding these companies making millions from false reviews responsible for their activity.

  • ScottyMack

    Although I agree that everything should be done to keep this type of situation from reaching the stage where negative reviews are posted, there are most certainly consumers out there who are less than scrupulous and know how to leverage complaint boards to get more than their fair share. Cow-towing to liars and thieves is hardly an action that anyone would consider to be a deterrent. I wholeheartedly salute businesses such as Dietz Development for suing bad customers and hope this becomes the norm. I was very sad to see badcustomer.com get taken down, since it was one of the only places where businesses could do to consumers what they have been getting away with forever – that is, warn other businesses about bad customers so that they could block them from being able to order from their websites. While organizations like the ACLU can scream about free speech all they want, words have meanings that can often lead to bad consequences. I hope her irresponsible free speech comes at a very high price!

  • Nataliya Yakushev

    Sadly, most companies start with #5 and often, this is their ONLY startegy. Even worse, they resort to search supression (aka hiring online reputation management company) and hope that will solve the problem.

  • http://twitter.com/dwightz Dwight Z

    Excellent article Neg. Sounds like one of tow, or a couple of things.

    Yelp, YP, Angie and other sites need to get the moderation and negative seo under control. It is way too easy for a person to post a comment. If a business is not active monitoring those sites then they could have negative reviews posted for days, weeks hurting potential sales. The algorithms for those public facing sites need to be managed and redeveloped or advanced ongoing.

    There needs to be more tools, or a tool that is simple for business owners to use, that is cost-effective or cheap that takes the review process out of the public format and places it on the business owners site. There also needs to be a level of transparency and business rules put in place so it cannot be gamed. It would be beneficial for the public / customers and the business owners to show this transparency.

  • Adam Zilko

    I have to completely agree with much of this (and especially Keenan) however, completely HATE the fact that companies like Yelp are allowed to push out and “filter” 100% completely legitimate reviews that were very tough to garner and tend to retain the poor ones making option 5 very difficult to execute on. We posted our strategy on option 5 here, and this has worked reasonably well however, cannot seem to help us w/ some clients on Yelp… http://www.firegang.com/garnering-reviews-multi-step-approach/

  • http://www.thewholesaleforums.co.uk/ Lace Llanora

    This is a very interesting case and to see how legal action actually affected the company’s SEO! Anyone interested might be put off just by the looks of the results. Although reviews can be very helpful in the decision process, there must be a level of responsibility within the platform and also on the reviewers end.

    It’s too easy to post reviews now, think negative eBay comments that affect several online sellers. Platforms must try to police such reviews and weed off fake ones without the proper proof.

  • http://twitter.com/fruittravel Fruit Travel

    i had a similar instance way back when one of my client asked me to ensure that their site doesn’t appear on top for negative reviews. Somehow wrote to some website owners to take those reviews back. But it went in vein :(

  • http://twitter.com/dese1ect Chris Recouvreur

    So you think that negative reviews are all basically dishonest? These sites aren’t supposed to be the yellow pages. I’ve left negative reviews for businesses that have responded pleasantly asked me to give them a second chance and generally I’ve taken them up on that and updated reviews accordingly. However any business that can’t either correct real criticism or ignore false criticism doesn’t belong on the market.

    Users of sites like Yelp, Angie’s List, etc. know that there are going to be bad reviews (not everyone loves you) and generally look at the total scope of the ratings. I think it would do Dietz and others more good to encourage happy clients to leave good reviews (even if you have to do some sort of promotion) to bury a bad review than to ruin your online reputation through lawsuits.

    Consumers also have a right to voice their opinion. Dietz is clearly acting as the censor demanding a sum so large as to quiet anyone who would try to write such a review about him again. This isn’t a typical case because of his actions, not to mention his lack of communication through legal channels in advance of filing suit. I support Jane Perez because she first had shoddy work done(look at the pictures on numerous sites), had property go missing, fired the contractor, beat him in small claims court, and now is being retaliated against with a defamation suit. You should to: http://www.indiegogo.com/projects/309293

  • http://veribo.com/ Veribo

    The right to freedom of speech and opinion is vital. Review sites do play an important part in helping consumers make informed decisions. When negative or inaccurate information is published online about your business it’s imperative that you respond immediately. Give your customers a way of contacting you that is not in the public eye. Make sure that you respond to your unhappy or disgruntled client, try to resolve the issue before it hits the internet.

  • israelisassi

    The text below is from a story I wrote about my experience with Yelp. Personally, I think they should be shut down.
    ———————————————————————————
    Yelp Filtered Reviews Can Accidentally Punish a Business

    Israel Isassi – Friday, August 03, 2012

    Yelp is an interesting animal. The impression I get is that it’s geared primarily for reviewing restaurants, clubs, and other social settings. They rely on an automated system in an attempt to determine if reviews are from real people since people are always trying to “game the system”. Unfortunately, some aspects of this system have serious flaws in my mind and end up punishing a business. An actual case I involved myself in had to do with Krav Maga Houston, which I have been studying self-defense since the last week of January 2012.

    Krav Maga Houston (link to Yelp review) had a 2-star rating on Yelp when I got involved in early July. A little research revealed they had 8 reviews (mostly negative) that Yelps’ system felt were from actual humans. It appears this determination was made mostly because these people frequently reviewed many, many places. The top-most negative review was from someone who is an “Elite ’12″ reviewer with 179 friends and 123 reviews. This person hadn’t reviewed Krav Maga Houston since January 2010!!!

    Additionally, Krav Maga Houston had 41 reviews which were mostly positive with ratings of 4 to 5 stars. These are being filtered out because many were first-time reviewers on Yelp or had very few reviews. My own reviewalso was filtered out, I suspect as well because I had only 1 review on their system and no friends. Honestly, I don’t eat out much and I don’t frequent bars and clubs so I didn’t really find Yelp useful.

    Jump forward to today and Krav Maga Houston now has a 2.5 star rating which is a half-star increase. Yelp now shows 43 filtered reviews which is an increase of 2 reviews. It was 44, but my review now shows up at the top spot for Krav Maga Houston reviews. To read filtered reviews you have to login to Yelp. The only change on my part has been that I have 7 Check-ins at Krav Maga Houston, 7 friends and have completed 4 more reviews for other businesses. I guess Yelp now believes I’m an actual human and trustworthy reviewer.

    As part of this learning process, I sent an email to Yelp via their website link in an attempt to help them understand the potentially harmful side-effects of their automated review system. More than a week later I have had absolutely zero response from Yelp. I’m sure they are busy people and don’t expect my message to be considered high-priority, but it would be nice if they at least acknowledged that they received my message. Maybe everyone is out on a yacht somewhere enjoying themselves.. Time will tell.

  • Andrew Lee

    Or the site could ban the users and move on.. I don’t want to hear they’ll just bypass it because there are plenty of ways to prevent that such as requiring legitimate credentials to post reviews. It will cut the trolling down to almost zero.

    There are already enough exceptions on freedom of speech these days. It’s sickening the way people use lawsuits to step on our birthrights. Don’t like it? Move to a police state where you can enjoy the fact that talking trash will earn you some prison time.

    Don’t get me wrong I have no respect for the people lying about a business but the website is partially to blame for having such a easy signup process. Neither party deserves to be sued. One party should grow the heck up and the other should enable better security precautions.

    Look at it this way WiFi security is garbage and the tools on backtrack “which is not needed you can download all the tools freely” can tear it apart fairly quick. Once on that network they have free reign to run all over the web and do anything they like. Example Wardriving just to do illegal crap in such a obvious way it might end up with a innocent person being busted.

    Also before anyone says it, once you’re on someones network it would be a breeze to hijack their computer info and completely forge it onto your own.

    Honestly you don’t even need to be that tech savvy to do what I just said. You could learn it very easy with Google or if you don’t like reading there are plenty of tuts on YouTube.

    What I just said is of course completely absurd and remains in the realm of worst case. However the fact that it’s possible means free speech must always reign supreme.

    I know lying makes people mad as it should but the laws that would prevent that would effectively kill our constitution. I might add that we’ve already shed too much blood for our freedoms that some people blatantly disregard.

  • http://twitter.com/YoungDonnaYoung Donna M. Young

    Regarding point #2, to cool down first, I would also like to add that one should NOT take too long to respond. The longer the complaint is around with no response—the longer it festers and becomes more of an issue to resolve. Try to respond as quickly as possible to at least acknowledge that you are aware that they have a problem, and that you will look into trying to resolve it.

 

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