Jonathan & Erik Bernstein, January 17, 2014
Could false reviews be hurting your business?
A new study is shedding light on the shady world of Yelp review fraud, a topic that’s coming up more and more frequently as the importance of online reputation works its way into mainstream thinking. Harvard Business School’s Michael Luca and Boston University School of Management’s Georgios Zervas found that at least 16% of all published Yelp reviews are fake, as determined by the site’s own filtering algorithm. Of course, as any Yelp regular would probably testify, it’s pretty obvious to the human eye that quite a few unfiltered reviews reek of fake as well, meaning the real percentage is likely even higher.
In addition, researchers confirmed that false reviews were often either misguided attempts at crisis management meant to combat poor reviews left by real customers, or aimed at establishing a strong initial reputation for new or unreviewed businesses.
The study also confirmed a suspicion held by many business owners – namely that competitors do sometimes post fake negative reviews to boost their own business. Luca and Zervas report that, for the average business, being in direct competition for the same niche results in a sustained 3% increase in one-star reviews each month, causing what they call a “statistically significant, economically substantive impact.”
Is this going to crush your organization if it’s otherwise raking in the five-star ratings? Probably not. However, a buildup of one-star reviews can hurt your online reputation management efforts if left unchecked. Because of how difficult it is to prove, you typically have to turn to a private online forensics expert to determine who the culprit is, but if you’re losing enough money, or risking a deeper crisis, as a result of what you believe to be false reviews, it can often be worth the cost.
Simply put, the sudden, intense spike in competition for online reputation has led some organizations to employ unethical tactics. While those who choose this route can produce some short-term benefits, in the long run they’re only setting up for a crisis management catastrophe as users learn to spot fakers on their own and review sites, immersed in their own battle to hold the title of “most credible,” up punishments for those who break the rules.