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Rating portals on the web – a boon or bad for business?

Over the last few years, several rating portals have become established within the web community. While in the beginning they were hardly taken seriously, at least in some fields of industry they now exercise considerable power. By now even Facebook has joined the fray and allows ratings of public places.

Whenever old established companies on the web adopt functionality from smaller ones, this usually means a new trend has reached a critical mass of users that promises profits to be made. Of course at first glance most things on the world wide web is free. However, through advertising and the gathering of user data, companies do get something out of it as well.

The rating portals are strongest in two fields: internet shops and gastronomy. Restaurant owners and hotel managers are often more than a bit worried about the sometimes uncountable numbers of reviews of their services.

Not too long ago only managers of highly priced restaurants knew the anxiety-provoking feeling whenever a restaurant reviewer was suspected to be present. Today, every guest is potentially a reviewer. To a degree that has always been true. Restaurants and hostels are a topic that is not only discussed in a circle of closest friends. However, the internet now offers a platform for people to share their opinion at any time with anyone. Especially in Germany the prevailing culture means that people are more likely to make the effort of a review when they have something to complain about. It is understandable that restaurant owners and hotel managers aren’t entirely happy about this, but this is something they cannot ignore.

In Germany the best-known rating portals are Yelp, TripAdviso, and Kununu. After starting small, like almost everyone on the internet, they managed to grow rapidly, especially because they offered apps early on and could take full advantage of the growth in mobile internet access. The goal here is not to let a few of your friends know where you are right now (like on Facebook), but to put the information about what’s available in terms of food and drink onto a virtual map – as completely and finely categorized as possible. Sometimes the portals offer a system or guide for the reviews, like a star system and others; sometimes it‘s just a simple text field. In general, the user needs to be willing to wade through much text before being able to draw any kind of conclusion based on those reviews. That is a tricky thing to begin with, as not everyone is looking for the same things when going to a restaurant. One person might be very focused on prices, the other mostly wants good service, and then the next requires a large vegetarian selection. Still, those websites are still multiplying and growing, and so far there is no end in sight. More and more fields get their own rating portals, even some who had not had much previous contact with the internet. Small barber shops or tiny shops selling fresh fruits and vegetables are one example.

No matter what field your company is working in, there is one thing you need to accept from the start, as several courts already confirmed: These kinds of reviews are allowed and there is no legal way to stop them completely.

That means that while they do have the right to take legal steps against defamation, insults and provably wrong claims and other such unlawful things, the unfavorable opinion of a disappointed customer is cannot be get rid of so easily. The cases are not always clear-cut, though. In some instances, a competitor asked all their friends to leave scathing comments about a certain company. In the gastronomy fields, such practices are not quite as isolated instances as one would expect. Here, someone is trying to gain an unfair competitive advantage by making others appear in a bad light. Even in this case, though, the burden of proof lies with the victim of such campaigns. So far, German courts have not been fully consistent with these matters, though.

The field looks a little different when it comes to companies offering services or selling physical wares over the internet. Established companies like Amazon, Ebay, international travel portals, or airlines have been offering feedback and rating features for a long time. This is likely for their own benefit: they can make improvements in usability fairly quickly, and the company itself has control over which features to offer and which not. That these feedback forums are rarely independent or transparent usually does not bother the users. The usually eagerly and freely give their opinions on the wares and services offered – at no cost for the company. This willingness to invest their time for no obvious gain is unique to the virtual world of the internet, and something not only rating portals profit from.

According to a study done by the market research company Nielsen, 90% of all consumers seek their friends’ opinions when making decisions concerning purchases. Customer reviews come at a close second. Psychologically that is because we tend to trust other members of our own “goup” (in this case: customers) much more than for example journalists.

In the end, this means that companies should not only focus on their own advertising activities, but also need to keep an eye on rating portals. Anyone who wants to present themselves as a desirable employer won’t be able to ignore Kununu, restaurant owners should regularly check Yelp usw. There is a specialized portals, or social networks with the review functionality, for most fields of industry nowadays. Oftentimes various experts voice criticism about the technology, algorithms used, and such. Still, it is not advisable to pull back and ignore those portals, no matter the lack of transparency. Customers have come to rely on ratings in search engines and on information websites. There are positive sides to this, and any company would be advised to be use them to their advantage.

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Herr Daniel Stock d.stock(@)top-jobs-europe.de