‘Trustability’ and why bad reviews are good for business

The counter-intuitive headline ‘Negative reviews drive sales, claims marketing expert’ on Marketing magazine’s web site caught my eye. But as I finished reading I was left none the wiser about why. Normally I would have stopped there and thought no more about it but the man behind this claim is Don Peppers, a widely-acknowledged marketing expert.

To get to the reasons for Peppers’ claim I had to spend an hour watching his presentation at a recent conference about social media and marketing. The presentation was online for a few months but has now been taken down, so here is a summary of what he said about negative reviews.

First, don’t be afraid of allowing people to post website reviews of your products or services. Sites with a few negative reviews but mostly positive ones will sell more than those with 100% positive ones. Why? Because people will view the former as more trustworthy, more authentic. Peppers calls this ‘trustability’. He tells the audience that trustability is about companies acting in the customers’ interests and not exclusively for their own benefit. These firms, he says, will be the ones that succeed in future.

To illustrate his point he talked about an insurance firm he uses. He once called them to buy a policy he thought he needed. The agent could have sold him the policy and that would have been the end of the matter. But instead, the agent queried his request and, on hearing about his needs, explained that a cheaper policy would provide the right level of cover. The company made less money on this single transaction, but at a stroke became ‘trustable’, gaining the loyalty of a well-known marketing expert who tells audiences around the world about them. That, clearly, is priceless in terms of endorsement and advocacy.

As Peppers reminds us ‘how you treat your products (or services) today will have no effect on their price tomorrow, but how you treat customers today has everything to do with their value tomorrow’. Wise words we would all do well to remember. You can read more about this in a LinkedIn blog post written by Peppers.

Update, November 2014: As a related postscript to the above, BBC Radio 4’s Today programme featured an interview with a Restaurant owner in Richmond, California, as part of a UK story on bad TripAdvisor reviews. The guy in question was fed up with people posting trivial bad reviews on Yelp, an influential US-focused review site. So what did he do? He offered 25% discount to anyone who posted a bad review. Business subsequently went up and he says the quality of his customers has increased too! This story was the inspiration for my first LinkedIn article. Read it here.

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