Best practices to be prepared for the customer review crackdown

With news reports suggesting that fake reviews will be made illegal, brands simply must embrace what could be the biggest ever regulatory crackdown on online reviews.

Breaking news this week reports that the Department for Business Innovation and Skills is considering banning the practice of writing or commissioning posts designed to boost a firm's online ratings by making it illegal. 

This follows enforcement action in February by the Competition and Markets Authority (CMA) which saw five online review sites forced to agree to improve their practices. The crackdown is part of a wider consultation which kicked off in July 2015 highlighting concerns about unlawful review practices including the publication of fake reviews, censorship of negative reviews and businesses concealing paid-for endorsements. It is believed that £23bn is being wasted each year due to untrustworthy website reviews. The CMA has now promised that this year will see further investigations as it steps up the scale and impact of its enforcement activity.

The CMA has made clear that it is investigating the practices of online reviews and this year could see some hefty enforcements and fines for companies who fail to comply with regulations.

While this is a clear warning shot, brands should embrace this as an opportunity to clean-up the industry. By implementing transparent online review practices, brands are not just complying with the law, they’re demonstrating that they can be trusted. It’s imperative to brands that they form open, trusted relationships with consumers. Anything which erodes this trust will tarnish a brand’s image, effectively damaging consumer relationships and resulting in lost revenue.

Brands can expect to see further evidence of the crackdown on online reviews this year as the CMA confirms it has opened investigations into several companies involved in reviews and endorsements with more announcements due in the coming weeks.

Online reviews have become a powerful and integrated part of the shopper journey. The CMA testifies that millions of people look at online reviews and endorsements before making buying decisions – and our own research supports this. Brands need to take advantage of how influential online reviews are by maximising the opportunities they offer as well as ensuring they’re following the correct – and lawful – procedures.”

Our guide to online reviews

Negative reviews

• Regulations forbid brands from censoring negative reviews – but they’re not something to be scared of. Our research found that consumers specifically seek out negative reviews. Negative reviews show that brands have nothing to hide.
• Perfect ratings are perceived as too good to be true. Our research also found most conversions aren’t driven by a 5 star rating; a product is most likely to be purchased if its average star rating falls between 4.2-4.5. Most people are savvy enough to discount overwhelmingly positive reviews as biased.
• Negative reviews can help brands identify better ways to serve their customers and improve their products. One of PowerReviews retailer clients had a watch on their site with a low rating. A closer look revealed many consumers commented that the clasp of the watch loosened quickly. The company worked with their manufacturer to improve the clasp, and the new version of the watch had a much higher rating.

Fake reviews

• The authenticity of reviews is what makes them so powerful. Fake reviews mislead customers, it’s as simple as that.
• Make sure both negative and positive reviews are checked for fraud otherwise only false negative ones will be removed.
• Publish all genuine reviews – and ensure your review collection procedure allows this.
• Ask your reviews supplier how it weeds out fake reviews; you need to be confident in how they operate. 

Paid-for reviews

• Endorsements are not illegal and can help you sell your product – but the issues arise when you fail to disclose the relationship.
• If you’re paying for it, whether through sponsorship, advertising or any other commercial arrangement, declare it.
• Incentivising is a great way of collecting more reviews – but you should disclose the incentive and post all reviews, positive or negative reviews.

Responsibility

• Adhering to online review practices isn’t just a ‘nice to do’. If you fail on any of these counts, you may be in breach of the Consumer Protection from Unfair Trading Regulations 2008.
• Consumers trust reviews. And it’s the responsibility of brands and retailers to provide authentic content that consumers can trust. Aligning with the right reviews technology partner can help you not only drive traffic and sales, but also build and preserve trust with shoppers.

Theresa O’Neil is senior vice president at PowerReviews.