How Businesses Should (and Should Not) Generate Online Reviews to Protect Against Online Review Attacks. January 2015

Transcription

1 January 2015

2 Strategies for Stopping Unauthorized Our Non-Profit Provides Internet Educational Sales Resources to Help Businesses Protect Their Brands and Reputations Online The Online Reputation & Brand Protection Coalition s mission is to help businesses protect their online reputations and brands online. The Coalition aims to fulfill its mission by educating businesses on how to protect and defend their reputations and brands online and advocating for increased protections and more effective remediation options for businesses. Specifically, with respect to education, many businesses today are struggling because they do not understand how to best protect and defend themselves against online reputation and brand attacks, and there is presently a lack of quality educational materials and resources for businesses to turn to help understand and address these problems. To address the absence of these resources, the Coalition is committed to providing resources to businesses with the most up-to-date information designed to explain, prevent, and help businesses ultimately eradicate the problem of online reputation and brand attacks. The Coalition provides its members with whitepapers created by the experts who regularly handle online reputation and brand attacks around the world addressing common reputation and brand problems which businesses are facing today. BOARD OF DIRECTORS ABOUT THE ONLINE REPUTATION & BRAND PROTECTION COALITION Whitney C. Gibson Co-Founder, Co-Chair of Board of Directors wcgibson@vorys.com Chris Anderson, PH.D. Co-Founder, Co-Chair of Board of Directors chris@cyberinvestigationservices.com The Online Reputation & Brand Protection Coalition is a non-profit organization dedicated to helping businesses protect their reputations and brands online. The Coalition is led by internet brand protection experts Whitney Gibson and Chris Anderson and includes a variety of multi-national advisors comprised of experts, business representatives, attorneys, educators, and other professionals. To learn more about the Coalition, visit Melissa Agnes Member of Board of Directors 2

3 I. Introduction Many businesses are finding, however, that customers are not regularly leaving reviews and thus, the online review websites do not have a high number of reviews to protect them. Most companies understand the power of online reviews today whether in terms of attracting business when reviews are mostly positive, or perhaps steering potential customers away when reviews are mostly negative. Indeed, studies have recently demonstrated just how much they can influence revenues. For example, in 2013, a Harvard professor and a Boston University PhD candidate studied ZocDoc, a medical scheduling website that integrates patient reviews of doctors. The study revealed that, on average, a half-star rating change (on a five-star scale) impacted the likelihood of doctors filling an appointment by 10 percent. Similarly, a 2011 study of restaurants from the Harvard Business School found that a one-star rating change on Yelp impacted revenue by five-to-nine percent. Considering the significance of online reviews and ratings today, this is an area where businesses are vulnerable to substantial damage from an online attack. Indeed, most anyone can go onto the majority of online review websites and post negative or defamatory reviews about a business. At the same time, businesses that are able to improve their reviews can not only protect themselves against online review attacks, but they can also potentially increase their revenues. One of the keys to mitigating the risk of an online review attack is to generate a high number of online reviews for the business, so that a rouge attacker cannot significantly impact the business s rating on the particular review site. Similarly, a business can potentially grow its bottom line as a result of receiving large numbers of positive reviews. Many businesses are finding, however, that customers are not regularly leaving reviews and thus, the online review websites do not have a high number of reviews to protect them. For this reason, among others, businesses are regularly looking for ways to increase their number of online reviews. While there are a number programs or tactics today for generating reviews, many of them create substantial legal and public relations risks for clients, and can get businesses in serious trouble. Part II of this whitepaper, therefore, describes methods for increasing online reviews that businesses should avoid because of the serious legal and/or PR risks they can create for businesses. Part III then describes methods that business should consider for generating online reviews to protect against online review attacks. 3

4 II. Online Review Strategies that Create Substantial Legal & PR Risks for Businesses Avoid posting fake reviews or hiring others to do so Businesses caught engaging in these practices are typically subject to public reprimands, and they can be fined as well (which can cause significant PR issues). Certainly there are many strategies and tactics some businesses have employed that create legal and/or public relations risks; by all means these should be avoided. One strategy many businesses are tempted to use (and that many do, in fact, employ) is the posting of fake positive reviews about their own businesses or fake negative reviews about competitors. According to a 2011 article in Businessweek, University of Illinois at Chicago professor Bing Liu said up to 30 percent of reviews for some product categories are fake. Meanwhile, a 2013 Harvard Business School study found 20 percent of Yelp reviews were fake, up from five percent in Many websites are able to verify that reviews are from legitimate customers, but many do not, including Yelp home to 67 million reviews as of September 30, One reason that fake reviews have become commonplace is that businesses may hire people to post reviews for very little money. Beyond asking employees, friends, and family members to write these reviews, businesses are not having trouble finding someone to quickly and cheaply write them. In fact, many people are actively advertising their services, such as this example from a popular crowdsourcing website. The posting of fake reviews creates very serious risks, both legal and public relations-wise, for businesses. In fact, federal and state law enforcement agencies have come down hard on businesses for posting fake reviews. The Federal Trade Commission (FTC), for example, has filed many complaints against businesses for engaging in unfair and deceptive advertising by posting false reviews. Businesses caught engaging in these practices are typically subject to public reprimands, and they can be fined as well (which can cause significant PR issues). For example, in March 2011, the FTC put out a press release about the Tennessee-based Legacy Learning Systems Inc. and its owner, caught engaging in deceptive advertising by 4

5 hiring affiliate markets to falsely pose as consumers/independent reviewers. The company agreed to pay a $250,000 fine, and it also suffered the PR consequences. Despite the recent crackdowns by law enforcement and government agencies, as well as the potential civil liability, fake reviews are still very common. 1 In a recent Pennsylvania case, a marble and granite installation business sued a competitor after it allegedly discovered that several posts on various product review websites were originating from its competitor s IP address. The competitor attempted to argue: 1) these false reviews, as a matter of law, did not constitute false advertising, and 2) it was not responsible for its own employees online reviews. But the Court disagreed and held the fake reviews constituted defamation and trademark infringement, violating the Lanham Act. The Court subsequently denied the competitor s motion to dismiss the case. NTP Marble, Inc. v. AAA Hellenic Marble, Inc., 2012 U.S. Dist. LEXIS (E.D. Pa. Feb. 24, 2012). Similarly, in 2013, the New York attorney general s office fined 19 companies a combined $350,000 for posting or soliciting fake reviews. This came roughly four years after a cosmetic surgery business, Lifestyle Lift, was forced to pay $300,000 to the State of New York after it was busted for ordering employees to write fake positive reviews. Companies are also being caught overseas. For example, in 2013, Samsung was subject to a $340,000 fine by Taiwan s Fair Trade Commission for similarly hiring writers and having employees post fake positive reviews and negative posts about competitors on Taiwanese websites. Not only do fake reviews subject companies to complaints and fines from federal and state-based law enforcement agencies, but these actions can also subject companies to lawsuits from competitors. Both the federal Lanham Act and statutes in many states prohibit unfair and deceptive advertising, and courts have held that they apply to false online reviews. 1 This is significant because the Lanham Act provides for the potential recovery of profits earned by the wrongdoer posting or orchestrating the fake reviews, possible damages, and very likely the recovery of attorneys fees as well. Despite the recent crackdowns by law enforcement and government agencies, as well as the potential civil liability, fake reviews are still very common. In fact, there is no reason to believe that the number of fake reviews are declining. Many businesses are hiring online marketing consultants or companies claiming to help with their reviews, not realizing that the marketing consultants and companies may actually be employing people to post false positive reviews. Alternatively, the businesses may just be willfully blind perhaps believing they will not get in trouble if unaware of the techniques being used and are too pleased with the results to ask the appropriate questions. This approach is not acceptable either. According to the 2011 news release Legacy Learning Systems news release, David Vladeck, the FTC s Bureau of Consumer Protection, stated: Whether they advertise directly or through affiliates, companies have an obligation to ensure that the advertising for their products is not deceptive. Advertisers using affiliate marketers to promote their products would be wise to put in place a reasonable monitoring program to verify that those affiliates follow the principles of truth in advertising. Thus, businesses must not only ensure that the vendors they hire are not posting fake reviews, but they should also be aware of the specific techniques being used (and continue to monitor). Do not wrongfully pay or offer incentive to customers in exchange for reviews Another tactic that many companies have employed to help generate positive reviews is to give their customers or bloggers incentives to post positive reviews. 5

6 Failure to do so could lead to the aforementioned fine and/or public reprimand of the business. This may include actually money, gift cards, free products, discounts, and more. This practice can certainly lead to a higher quantity of positive reviews (typically a very good thing). However, this practice is considered false and misleading, as consumers are not privy to the fact that the reviews they are reading were actually influenced by some sort of payment or other incentive. Even if a reviewer was not actually told to post a glowing review, a person offered an incentive in exchange for a review is most likely to post a positive review. And this is typically a problem, whether a certain website (e.g. Yelp) prohibits this practice or, perhaps, because the FTC frowns on this behavior without proper disclosures. In an effort to curb this problem, in 2009 the FTC updated its guidelines for endorsements and testimonials, which made clear that when any positive reviews are published by anyone with a material connection to the seller (most often that they were given some form of payment) those relationships must be adequately disclosed. In other words, the FTC believes that it constitutes unfair or deceptive advertising for someone who receives payment from the seller, or is otherwise connected with them, to post a positive review about the business without fully disclosing their relationship to the business. These disclosures often come up with bloggers, as it is common practice for them to take a free product or a financial incentive in exchange for a review. Besides, as stated, many websites such as Yelp prohibit the payment in exchange for reviews, thus even making an otherwise appropriate disclosure would still not prevent someone from violating such a website s rules. (Also note that even lawful disclaimers will likely dilute the effectiveness of a review on a website such as Yelp, so it is not typically worth providing incentives to a reviewer anyway). When in doubt, an incentivized reviewer should disclose its affiliation with a business. This means that a business that knowingly offers an incentive or becomes aware of someone with a close relationship reviewing them must ensure these disclosures are being made (and in the appropriate manner). Failure to do so could lead to the aforementioned fine and/or public reprimand of the business. Furthermore, there may be an argument under the Lanham Act and various states unfair competition laws that inducing people to post online reviews constitutes misleading or deceptive advertising. As such, businesses could also expose themselves to potential civil liability from a complaint brought by a competitor. 6

7 Other review-generating practices that should be avoided Customer testimonials may be helpful in the right scenarios (such as for certain products).»» Setting up in-store review kiosks: Some businesses have set up kiosks in retail stores where customers can submit reviews. This practice his highly frowned upon by review websites, as this practice is believed to lead to biased reviews. Yelp, for example, which has a filtering system intended to catch reviews it perceives as not neutral, would not approve of such reviews. TripAdvisor, meanwhile, has punished businesses such as by dropping them from their popularity index and posting a red flag notice on the pages suspected of dishonest review-generating practices. It makes sense for a business to try to boost its reputation in such a way that it actually worsens it.»» Sending blast s to old clients: It is so easy to collect customer information and create lists of past clients. However, businesses should not send out a blast mass to old clients asking for reviews. On the surface, it just looks bad. Moreover, if a business is successful in quickly amassing lots of new reviews on third party websites, these websites will likely suspect that there is some shady practice that lead to a quick rise in the number of reviews.»» Posting customers glowing reviews on one s own website: This practice may not be terrible or an absolute must avoid, but it is not typically recommended either. Customer testimonials may be helpful in the right scenarios (such as for certain products). However, when a business posts several gushing reviews, consumers are likely to see right past that; even if the reviews are authentic, they will likely do little to persuade anyone. In fact, on websites such as Yelp, prospective customers are actually more likely to be influenced by more honest and critical reviews. 7

8 III. Recommended Approaches for Generating Online Reviews A minority of businesses, however, have implemented successful programs and appear to be excelling online. Based on our experience and an array of data and information, we recommend that businesses consider implementing a content-neutral program to generate reviews without providing any incentives to reviewers. In today s environment, most businesses with quality services and products would benefit by having a large quantity of reviews. This would prevent a few negative reviews from destroying their ratings on third party websites, while also protecting themselves against more serious online review attacks and likely improving the business as well. Unfortunately, it is very likely that at some point a disgruntled party (not necessarily a customer), will post a harmful fake review about a business that goes unfiltered and that has the potential to significantly damage its reputation. We have found that most businesses that wish to create a legitimate review program do not understand how to do so and, thus, often give up after a short period of time. A minority of businesses, however, have implemented successful programs and appear to be excelling online. The difference between these two groups often lies in the following: consistent (or inconsistent) application of a review program to all of a business s customers and not giving up if there is a small review rate (note: even five or ten percent participation adds up); the program must be easy for businesses to use; the process of leaving reviews must certainly be easy for the customers; and businesses decision makers must have positive attitude towards generating reviews and implementing effective programs. As far as how to generate online reviews, we have found two strategies to work especially well. First, a business can set up a program in which a professional asking for feedback is sent to customers within 24 hours after they leave the business (but not immediately and also not after business hours). This wellcrafted may invite the person to submit a review and/or take a brief survey in order to help the business continue to provide the highest quality of service. The best practice likely involves utilizing a third-party review platform that simplifies the review process for customers, verifies that the reviewers are actual customers, and gathers statistics for management (not only star-ratings, but also the number of people opening the s and clicking on the survey links). Customer reviews can provide helpful feedback for the business, while simultaneously contributing to an aggregate profile of the business which would likely rank highly in search engines (and ultimately help generate more business leads). 8

9 Part of achieving this is not asking people to leave reviews if they have had great experiences with the business. A second option would be to share a URL to the desired review website or platform, whether by handing out a small card/half sheet of paper, having a stack of cards or sheets located somewhere prominent inside the business, or simply tactfully including the URL on the business s website. Similarly, the businesses will ask customers to help make them better by leaving a review, which will not only be used for internal purposes but also will overcome the inherent flaws that come with having a small number of reviews. Currently, businesses are achieving better success with the option because it offers a more efficient way for customers to provide a review. Further, the s go directly to actual customers, meaning they can be verified. A well-run review program may only generate about a five-to-ten percent response rate, but this can still lead to a substantial number of reviews. For example, if a physician were to have 19 patients per day 2 over a one month period, a five percent response rate would generate about 20 reviews. Most doctors do not have 20 reviews in total right now, nor do many businesses. Thus, if a business could generate even three-to-five new reviews per month, this could go a long way. Moreover, these programs do not carry with them substantial legal or PR risks, so long as the generated reviews are neutral (meaning the program cannot solicit only positive reviews, but rather feedback from any customers wishing to provide such comments). Part of achieving this is not asking people to leave reviews if they have had great experiences with the business. 2 The average member of the American Academy of Family Physicians visits with about 19 patients per day, per a May 2014 article in The Washington Post. Most review websites do not have policies against soliciting online reviews from customers. Yelp may be an exception, but we do not feel there is a substantial 9

10 For actual businesses with a very low quantity of reviews, the sample size cannot provide a reliable representation of the business s true reputation. risk in following one of our two recommended approaches (as opposed to telling a paying customer please go give us a five-star review on Yelp. ). Yelp claims solicitations lead to bias reviews, with impacts the quality of the reviews on the website. Specifically, in a 2010 blog post, Yelp states: Let s face it, most business owners are only going to solicit reviews from their happy customers, not the unhappy ones. Over time, these self-selected reviews create intrinsic bias in the business listing bias that savvy consumers (read: yelpers) can smell from a mile away. This reasoning alone is not sufficient to demonstrating that asking customers for feedback is wrong or creates a bias. On the other hand, without seeking feedback, a business s review pages on websites such as Yelp can suffer from another bias: a sampling bias. If a business has five reviews, including one four-star review, one three-star review, and three one-star reviews (an average of two stars), there is an obvious sampling bias that likely does not accurately portray the business (especially if one or more of the onestar reviews are false reviews). For actual businesses with a very low quantity of reviews, the sample size cannot provide a reliable representation of the business s true reputation. In fact, a study of hotel reviews published in the Aug edition of the Cornell Hospitality Quarterly, revealed that review pages tend to start out as disproportionately negative but the reviews balance out as more reviews are published. Thus, we believe generating more reviews in a content-neutral fashion will increase the reliability of the reviews. 10

11 IV. Conclusion There are many practices that are frowned upon, even if not actually illegal, which should be avoided. Whether a business aims to generate more reviews on a website such as Yelp or another third-party platform that collects verified customer reviews, a business can set up a defense system against harmful negative reviews. There are many practices that are frowned upon, even if not actually illegal, which should be avoided. We recommend setting up the aforementioned program or otherwise directing customers to the appropriate websites to provide feedback. Given today s internet landscape, it is important to not only have positive reviews reputation-wise, but also to guard against these potential online attacks. 11

12