Businesses and The Fake Review Phenomenon

At one point or another, we have all sought input from others to help us make a decision. It’s a common problem to struggle with finding a delicious restaurant to eat at, deciding which brand of an item to buy, or choosing a place to purchase your Christmas tree. The Internet has helped consumers make more informed choices, and a growing number of people are turning to online review sites to help them navigate a wide range of options. Per Kelli Grant of Marketwatch:

In December, visits to the popular local-business review site Yelp.com were up 15%, year-over-year, according to Web traffic analysis site Compete.com. Similarly, travel review site TripAdvisor.com saw an 8% increase in visitors, and traffic to local-services review site Angie’s List jumped a whopping 80%. What’s behind the rising demand? In a 2012 report from market research firm Nielsen, 70% of consumers said they trust online reviews, a 15% increase from 2009. That means online reviews are second only to personal recommendations from family and friends as the most trusted source of buying advice, researchers say.

As the online review industry explodes, it’s fair to question how reliable these sites are. Is consumer trust misguided? Bing Liu, a professor at the University of Illinois at Chicago, believes as many as 30% of online reviews are fake, and Gartner research expects that number to rise in the coming years. Scour the Internet, and you can find companies willing to pay consumers small sums of money to write fraudulent reviews of products or services they have never tried out.

The motive for such unethical behavior is financial gain and market share increases. On the one hand, some companies commission writers to post reviews lauding the specific entity. By the same token, loyal employees–hoping to help their organization out–take to the Internet posing as customers gushing about their experience. The logic is simple; positive reviews provide a tangible impact on a business’s financial performance.   A 2011 Harvard University study determined that a one-star-better difference increased sales anywhere between 5% and 9% for an independent restaurant. On the other hand, organizations commission negative feedback that can cripple a business. Nobody wants to eat at a restaurant that receives one star on Yelp. Knowing this, competitors find people to write scathing reviews and drive traffic away from the competition.

Despite the disturbing trend, consumers should continue to use these online review communities and follow a few common sense guidelines. First, put more stock in profiles with multiple reviews. It is easy for one or two fake posts to skew the entire perception of a restaurant. However, if you see a pattern of reviews underscoring the delicious carne asada at Danny’s Tacos in Los Angeles, chances are the food truck makes a tasty torta. Next, view overly positive or incredibly negative posts with a skeptic eye as they are prime candidates to be fake reviews. Finally, do not be afraid to ask a friend if they have had any experience with the subject in question. Online review sites can be a fantastic starting point for narrowing down possible options, but they do not need to be your only source for information.

Every once in a while, a product or service will fail to live up to the expectations generated by the online reviews. That’s just the cost of making decisions based on information provided by often anonymous sources. However, consumers face similar risks when they ask friends for help in making a purchasing decision. Who hasn’t seen an awful movie a friend raved about? A few bad experiences should not be a deterrent. On average, these sites provide a relatively comprehensive database that effectively and concisely aggregates insightful information about the restaurants, products, and other businesses vying for our disposable income.

4 thoughts on “Businesses and The Fake Review Phenomenon

  1. The marked increase in the use of online internet reviews is a phenomenon that I believe has forever changed the way consumers interact with businesses. I’ve been on Yelp three times today to find restaurants and activities in the Los Angeles area and I won’t lie – I put heavy weight on consumer reviews.

    You mention a lot of great solutions in the second to last paragraph of your post. However, they tend to focus solely on what the consumer can do to evade the problem of fraudulent reviews. I am curious to know if you have any ideas for how services like Yelp! or parties other than the consumer that is directly affected might mitigate the damages created by fake reviews. Perhaps there are greater steps that these websites can take to ensure quality control. Certainly as a consumer I would feel more comfortable knowing that these companies were taking extensive measures to ensure accuracy in their product.

  2. I’ve found sometimes that when there are a lot of reviews for a product or venue, I read a bunch of them and end up feeling confused because they are all conflicting and it’s hard to tell who to believe. Unless there is a general consensus (which often is not the case) reviews can be very confusing.

    Something that could be either positive or negative about reviews is that consumers can demand better service, either by threatening the business to write them a bad review or enticing them by promising to write a good review if they do such and such. Such tactics actually work, especially for not such well-known businesses. I have heard, however, about top Yelp raters identifying themselves as such and going into a restaurant making unreasonable demands (like a free meal) or else the reviewer will give the venue a scathing review. Reviews have definitely changed how people shop, both for the positive and negative. Good piece.

  3. The concern you express in this blog is valid to me and can even be taken a little further. I think that reviews on products or businesses can be misleading but also they can really hurt businesses in an unfair way. I’ve seen this when people post reviews about certain lawyers that I know personally. For the most part, the comments are positive and commend the lawyers for their good work. Then sometimes you get that one bad review that wrongly discredits all the others because that person was not happy with the results of their particular situation. I use this example with reviews on lawyers because they cannot control outside factors but are yet at many times held responsible for them. Anyways, these rare negative reviews prove to be enough sometimes to negatively effect their practice. To me that’s just simply not fair. My point in all of this is just that people should look for the reviews for some guidance like you suggest but not solely rely on them.

  4. I think peer reviews are necessary when making a decision to buy something or use a service. But it shouldn’t be the basis of the entire decision you make. As one saying goes, we may all have fingers that look the same but they are very different. Likewise, each individual’s taste and what they like or may not like are very different.

    Reviews should serve as a guide not dictate our entire decision making.

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