Negative consumer reviews impact on sales

Sixty per cent of Australians say a negative review or online posting influences their decision to purchase from a store or supplier, according to new research.

The survey, by American Express, was completed by 1,000 Australian consumers, aged 18 and over, and reveals that 40% of Australians ‘always’ or ‘often’ use an online review, blog or posting as a way of measuring a company’s reputation for customer service.

Australians are also more influenced by a poor business review than they are by a good one, according to the survey.

According to American Express, the survey suggests that retailers need to work even harder to keep customers satisfied over the festive season to avoid attracting negative publicity.

Christine Wakefield, vice president of American Express World Service in Australia, says the explosion of the internet and online review forums has created a “word-of-mouth system on steroids”.

“For businesses, it no longer means keeping an eye out for the ‘mystery shopper’ engaged to review service levels, but focusing on serving all customers exceptionally well,” Wakefield says.

Brian Walker, managing director of The Retail Doctor, says the figures aren’t surprising.

“There are plenty of examples where brand names have been damaged by poor consumer responses,” he says.

“This is the age we live in – the internet is primarily a search tool. Transparency of information is clearer than ever before.”

To avoid negative reviews, Walker says retailers should develop a simple proposition and integrate their online presence with a physical network.

“Have good feedback loops, ask for positive responses from customers, reward customers for feedback, and use feedback to review the offer [being critiqued],” Walker says.

“Don’t be all things to all people and have reasonable expectations for yourself. Contact the bad reviewer wherever possible and be seen to be learning a lesson from the bad review.”

“Certainly don’t ignore bad reviews – respond in a timely manner, try to make contact with the reviewer, and be very open and transparent in your approach.”