Archives Cynthia

A perfect 5 stars can hurt sales, so what’s the ideal score to achieve?

Every business owner hates to see negative reviews but a new study shows that having a few blotches on your, otherwise pristine, reputation might actually be good for your bottom line.


Let’s call it the “Too Good to Be True” syndrome.

Spiegel Research and PowerReviews teamed up on a project to see just how online ratings affected the sales on three different ecommerce sites. Two sites sold low price consumer products and one sold high-end gifts.

Right out of the gate, they proved a point we’ve always known: that people are more likely to buy products that have reviews than products that don’t. But here’s what incredible; a product with just 5 reviews is 270% more likely to be purchased than a product with zero reviews.

As we discussed a few weeks ago, Spiegel also noted that reviews had an even bigger impact on high-priced items vs low price items. Customers also take reviews more seriously when the product involves health and safety (baby products, weight loss products) or if the product or business is brand new.

Right now you’re thinking, I know all of this. Reviews are important, but when you open yourself up to reviews, you risk getting the bad along with the good. Is it worth it?

It is. Here’s why.

The researchers found that for most products, intent to buy increased along with the number of stars – up to a point. Once the average star count hit 4.2, intent to buy began to decline. The closer the reviews got to being perfect, the lower the intent to buy. In other words, consumers don’t believe in perfect, so they’re suspicious when they see nothing but glowing reports on a product or business.

Check out the massive drop-off in the high-end gift category. It’s enough to make a retailer sabotage their own 5-star reviews!

The research shows that 82% of customers actually look for negative reviews and spend 4 times as long on a site when they find them. This may seem like we’re living in a cynical society but it’s actually a smart way to research a product. If I’m thinking of trying a new restaurant, I’m not interested in all the happy people. I want to hear about the problems, so I can decide if it’s still a good fit for me. Not kid friendly? Good, I was hoping for a quiet, romantic evening with my husband. They don’t serve alcohol. I don’t drink, so no problem. Food was lousy? 10 other people said it was great, so I’m not worried.

The restaurant manager is probably freaking out about those 3 bad reviews, but I feel like I have a true picture of the experience and it works for me. Reservations for two, please!

This does not mean you should ignore bad reviews. When you can, address the problem publicly, even if it means apologizing when it wasn’t your fault. Future customers will appreciate the effort. Whatever you do, don’t snap back, don’t argue and don’t respond to trolls. Trust that your real customers will know a phony review when they see one.

When it comes to online reviews, perfection is overrated. What customers really want is credibility and that comes with an honest mix of opinions from those that love, like, hate and can’t decide how they feel about your product.

4 important ways to stand out when your industry is under a reputation attack

There was a time when working for an airline seemed adventurous and glamorous. Now, it’s tantamount to working in the 9th circle of hell. CEO of a Silicon Valley startup? Might sound better to say you’re unemployed.

No doubt about it, it’s been a rough year for several major industries including casual restaurants, the automotive industry and retail chain stores.

So what happens to your reputation if your company is part of an industry that’s sporting a black eye? Can you stand on your own unblemished record? Probably not.

The truth is, even though it’s only a handful of troubled companies that make the news, consumers have a tendency to hold widespread grudges. It’s particularly tricky in industries with only a few big names such as airlines and banks. When it came out that Wells Fargo was creating fraudulent accounts, everyone started looking a little closer at their bank statement. Those bad burritos at Chipotle, didn’t just affect the other restaurants in the chain, it made diners leery of eating at any restaurant serving similar food.

Want to avoid getting a black eye by proxy? There are a few things you can do.

1. Stand out from the crowd

You’re less likely to be lumped in with your troubled cohorts if you appear to be something completely different. Traditional airlines are in trouble because the public thinks they’re putting profit before passengers. Imagine an airline that purposely carried fewer passengers per trip in order to provide a more comfortable experience. Imagine an airline that offered first class service at economy prices. Not only would those companies be standouts in their industry, they’d be the ones consumers would point to as examples when the traditional airline gives away another baby’s seat or drags another passenger off a plane.

2. Don’t take advantage of your competitor’s bad press

When your main competitor takes a hit, it can be tempting to call them out on social media. “XYZ screwed up? Come over to our place and we’ll take care of you!” Don’t do it. It only makes you look petty and vindictive. You can also be seen as putting down customers who were loyal to the competition. That’s no way to swing them over to your side.

3. Step up before you’re called

Though you don’t want to take advantage of another company’s misfortune, you do want to step up and help make things right for the industry as a whole when you can. For example, an airline that goes out of its way to aid passengers stranded by the competition or hire workers displaced by a hostile takeover.

It’s also good to be part of the plan to prevent such a thing from happening again. Form an industry investigative committee or invest in an industry wide safety or training program.

4. Communicate

The most important factor in dealing with any kind of industry crisis is communication. When your industry takes a hit, call a meeting to talk with your staff. If it’s a large company, give every manager or department head the data they need to talk to their staff.

Talk about how the incident might impact your business. This is also a good time to make sure your company isn’t hiding a similar problem. Newsworthy failures such as the VW emissions scandal and the Wells Fargo incident don’t happen over night. They happen because of a series of bad choices and wrong turns which were most-likely triggered by financial, time and other pressures.

Give employees the tools they need to report issues with impunity. Make a few surprise visits and dig a little deeper into the people and processes. If you see the early warning sides, you can fix it before it turns into a public #PRFail.

When a big company takes a hit, it’s bad for the entire industry. Your company may not be part of the problem but, if you want to protect your reputation, you must be part of the solution.

Does product price matter when it comes to reputation recovery? Survey says…

From mishandling of a customer, to a joke that offends; our social media channels are overflowing with #PRFails that have gone viral.  After that comes the angry retorts and the quick click sharing so others can share in the outrage, too.

These public fails are tough on a company’s reputation but they can be even tougher on the bottom line–with “can” being the operative word in the sentence. According to a new survey from Clutch, the financial impact of a PR mishap is directly related to the size of the purchase. In other words, consumers are more likely to take their business elsewhere if a large chunk of money is involved.

In their recent report, Clutch detailed the consumer response to three companies with bad press; United Airlines, Pepsi and Chick-Fil-A.

United was dealing with the incident where the passenger was injured while being dragged off a plane. 53% of those surveyed, said that, after hearing about what happened, they were less likely to buy a ticket from United.

Next up was Pepsi; in hot water for a controversial commercial that suggested a cold drink could calm officers in riot gear during a protest. In this case, a whopping 77% of respondents said the backlash wouldn’t stop them from buying a Pepsi if they were so inclined.

As for Chick-Fil-A, participants were asked if they were less likely to eat at the fast food restaurant after hearing about the company’s fight over their religious values. 58% said the news didn’t affect them either way and 25% said they were more likely to stop by for a bite.

Clutch says these results point to a shift in behavior based on the value of the purchase. That negative PR is more likely to scare off a $100 customer than a $10 customer. It’s a valid point but it may have more to do with circumstances than actual dollar amounts. Pressing the Pepsi button on the soda machine doesn’t have the same ramifications as putting yourself in the hands of an airline for half a day or more.

We also have to look at the events that got each company in trouble. Chick-Fil-A felt the heat because they brought religion into the workplace. There are plenty of people who agree with them or at least respect them for standing up for what they believe in. The company didn’t “make a mistake” or backpedal after making the news. They said, ‘we are who we are’ and we hope that won’t stop you from enjoying our restaurants.

That’s very different from the Pepsi ad team who stepped too far out on a limb. They wanted controversy – obviously – but they didn’t expect it to hurt the company’s reputation. In the end, though, all they did was make an insensitive advertisement and though it may have been painful to watch, no one really got hurt.

But then there’s United Airlines, whose employees not only made a series of bad choices, they actually caused bodily harm to one customer and emotional harm to many others. After the incident, future flyers were left to wonder if it might happen again, or worse! Of course they were reluctant to buy a ticket! Who wouldn’t be?

None of this is to say that Clutch got it wrong. Their report very succinctly points out that there are levels of ramifications to every PR nightmare. Some are easily corrected with an apology and a coupon. Others will simply fade with time. But when the bad press revolves around physical harm or potential harm (Chipotle, United, Takara) it’s more difficult, if not impossible to come back.

When you’re in the middle of a social media firestorm, it feels like the beginning of the end. But in most cases, if it was an honest mistake or a slip in judgement that got you there, you can regain consumer trust. Take ownership. Fix it. Lay low until the fire is just embers, then go back to business as usual. And more importantly, don’t ever do what you did, again.

Supreme Court says offensive brand names are a-okay

The times, they are a changing. Brand names and trademarks that were once amusing are now considered offensive by some and it’s affecting the hard-won reputations of some age old brands.

The most recent case involves the syrup we all grew up with: Aunt Jemima. You don’t need to see a picture to know what she looks like. But did you know that the name came from a blackface performer in a minstrel show and that the original model was a woman who had been born a slave?  But that’s not what we thought of when we poured syrup on our pancakes every morning.

For nearly 100 years, Aunt Jemima stood for old school, southern hospitality and home cooking.  Today, the image represents a moment in time that shouldn’t be celebrated or used to increase a company’s bottom line.  Entrepreneur B. Smith and her husband are pushing PepsiCo (the current owner of the brand) to “set Aunt Jemima free.” Not a small request when you’re talking about a brand that has become part of pop culture.

PepsiCo isn’t the only company facing a tough decision regarding classic brands that don’t suit modern times. A Navajo woman has spent the last 10 years trying to get the Washington Redskins to abandon their famous name. Just two years ago, Warner Brothers was “persuaded” to stop production of toys based on the car from the Dukes of Hazzard because the vehicle has a Confederate flag on the roof.

Up until this week, unhappy consumers had the law on their side. The Lanham Act prohibits the registration of trademarks “which may disparage … persons, living or dead, institutions, beliefs or national symbols, or bring them into contempt or disrepute.” This is the act The U.S. Patent and Trademark Office referred to when they told an Asian rock group that they couldn’t trademark the band’s name. The Slants said that they purposely chose the name to “help ‘reclaim’ the term and drain its denigrating force.”  In other words, they chose it because it was offensive, but not in a mean way. They fought the ruling and won.

This week, the Supreme Court ruled that banning disparaging trademarks was unconstitutional because “public expression may not be prohibited merely because the ideas are themselves offensive to some of their hearers.”

To clarify, the court said that the Lanham Act is too broad, in that it bans any trademark that is disparaging of others. For example, a trademark that puts down bullies such as “Bullies Are Bad”, would also be thrown out as it’s disparaging to bullies.

Though the ruling is likely to be challenged again and again, for now, the Supreme Court’s decision makes it easy for the Redskins and Aunt Jemima to keep their well-known brand names. . . . if they really want to. Though they may have the law on their side, they’ll still have the public against them. That’s not just consumers, that’s also investors and vendors and employees who no longer feel comfortable aligning themselves with an offensive brand.

Changing a 100 year old logo isn’t a decision any company should make lightly. It’s an expensive proposition in terms of packaging, signage, and advertising. Then there’s the potential loss of sales because consumers no longer recognize your product. Or, in the case of Warner Brothers and the General Lee, the product is no longer available for sale.

No one wants to put profits ahead of respect for their fellow man, but a CEO also has a responsibility to take care of his employees and investors. If a drastic change drives a company into bankruptcy, is it still the move they should make? On the other hand, bowing to public opinion could have a positive effect on a company’s brand, which in turn could result in even more profits.

What do you think? Should companies abandon beloved brands that no longer fit into the current zeitgeist? Or does nostalgia win over political correctness every time?

CEO dismissals for unethical behavior jumped 36% in the last four years

In 2016, 18 CEO’s from the world’s 2,500 largest public companies, were forced to resign because they did something unethical. 18’s not a very big number but it’s bigger than it’s ever been before.

According PwC’s CEO Success study, CEO dismissals for ethical lapses rose 36% in the last four years vs the prior four years. This includes incidents of fraud, bribery, insider trading, sexual indiscretions, and lying.

It’s interesting to note that the percentage is even higher when you hone in on only the largest companies in the world. And it’s higher among CEO’s who have been with a company more than six years.

What’s happening? Are today’s CEO’s less ethical than they were a few years ago, or is something else causing the rise in forced resignations.

PwC thinks it’s more about a change in climate than a change in people. They pin the rise on several trends that are making it harder for CEO’s to escape a public flogging.

First, is the fact that the public is a lot less forgiving than they used to be. CEO trust is at an all-time low. In the past, we put our blind trust in our leaders but those days are gone. Not only are we more suspicious, we’re also less likely to forgive and forget when we learn of a CEO’s indiscretions.

Another big issue is the 24/7 news cycle and the rise of citizen journalism and social justice warriors. A slip that might have been caught and fixed before anyone was the wiser is now a viral video with a hashtag on Twitter in a matter of minutes. Once the mistake hits the fan, CEO’s often jump to explain themselves publicly, when they should be closing ranks. This leads to a second round of finger pointing that inevitably makes things worse.

Third, is the increase in digital communications, social media and automatic data storage. In 1954, it was your word against your boss’s word. In 2017, there’s a digital paper trail including emails, conversations recorded on a mobile phone, copies of hard drive deleted documents in the cloud, and Facebook confessionals.

Really, it’s a wonder any CEO gets away with even the slightest misstep in the modern world.

But let’s get back to the original question; are CEO’s less ethical than they were? Could be. We tend to think of leaders making unethical choices out of greed. They cut corners that lead to safety issues or they shave a little off the top to line their pockets. But it wasn’t financial gain that led to the most recent lapses; it was social pressure.

Today’s top companies are being asked to hit impossible goals in sales, production and customer service. When a leader is failing, through no fault of his own, he might feel the need to cross the line for the good of the company. Who’s going to notice a slight tweak in those emissions reports? So the ground beef is a day or two past the code – it’s still good to eat, right? And those sexual harassment complaints? You could fire those responsible but that’s going to lead to a loss of productivity. Who has time for that?

We’re all so very good at justifying our actions.

Here’s the problem, saying you did the wrong thing for the right reason isn’t going to protect you or your company when the world finds out. Yes, it’s tough to stand up at a board meeting and say that your exciting new product doesn’t actually work. But it’s a lot tougher to face a news camera and admit that you repeatedly lied in order to keep the money coming in.

Before you write this post off with a breezy, “that would never happen to me”, remember that we all handle pressure differently, and while you may have the strength to battle on, the people who work under you might not have as strong a moral compass.

Protect your company by carefully monitoring incentive-based goals, encouraging communication at all levels, and investigating all allegations of misconduct. And, above all else, always strive to do the right thing because the world is literally watching.

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