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When customers yelp, everyone can hear it

Online reviews play a key role in local businesses' reputations. Owners are taking note -- and often action.

February 26, 2010|By Robert Faturechi
  • More than two-thirds of Studio DNA's new clients find the salon through Yelp, a website where people post reviews of local businesses, Studio DNA's co-owner says. Above, the Santa Monica salon.
More than two-thirds of Studio DNA's new clients find the salon through… (Luis Sinco / Los Angeles…)

Hollywood transplant Caroline White figured a spa outing would be the perfect way to welcome her visiting mother to Los Angeles.

But to hear White tell it, their afternoon last summer at a Mid-Wilshire spa was anything but relaxing: The facialist was late, the staff was rude and the business refused to offer an immediate refund.

So the aspiring actress did what she always does when a business disappoints: She wrote a scathing review on Yelp, one of the many user-generated-review websites popularized in recent years.

In the past, the spa's owners might have ignored White's online rant or not even seen it. But these days, many owners are acutely concerned about their online reputations and are offering disgruntled customers freebies, do-overs and other incentives to reverse harsh critiques on websites such as Yelp and Citysearch, industry observers say.

White felt the effect of that concern firsthand.

"I get a call from my mom saying, 'You need to take your review down or they're not giving me my money back,' " she recalled.

White's experience, though relatively extreme, isn't unique.

"It's become a higher-stakes game in the last year as sites have become more popular," said Greg Sterling, an analyst who looks at the effect of digital media on consumer behavior. "Before, someone might have said, 'I'm never going to go there again,' but that was word of mouth. It wouldn't show up anywhere. But now it's all public."

"You can no longer, as a business owner, ignore criticism. You have to address it," said Sterling, founder of Sterling Market Intelligence.

No one publishes hard data on how often business owners offer perks to dissatisfied customers; many of the exchanges are proposed in private messages and fulfilled offline. But anecdotal evidence shows the practice is becoming increasingly common.

The literature on dealing with angry reviews is growing, Sterling said, and third-party companies are popping up with promises to generate positive reviews and suppress negative ones. One company, Seattle-based Marchex Inc., aggregates and analyzes user reviews for business owners in a process it calls "reputation management."

To many customers, user-review sites have become the go-to destination for determining the best nearby services, with ratings on dentists, cafes, bars, mechanics and other businesses.

The freebies many owners are offering to salvage their ratings include free meals, exchanges for faulty products and second tries on services such as botched haircuts, Sterling said.

"This ups the ante for businesses," he said. "You can't really hide anymore."

Danny Leclair, co-owner of the Studio DNA hair salons in Los Angeles' Fairfax district and Santa Monica, said he has no choice but to pay close attention to the responses he receives on Yelp. More than two-thirds of his new clients found the salon through the site.

He offers disgruntled clients a free consultation with the salon's co-owner and stylist, who assesses the problem, then re-cuts. If they refuse, he offers refunds. The online reviews have become so important at the salon that Leclair highlights a few, both good and bad, at each staff meeting.

"If someone provides a negative comment that is worth noting and is constructive, I'm all over it," Leclair said. "I'd much rather know and correct it and evolve as a business than be left in the dark and have people stop coming."

Floyd Ross, owner of a Thai restaurant in Redondo Beach called Siam I Am, said he became active on Yelp almost immediately after opening his business in 2008.

He's been particularly sensitive to negative reviews, especially in the months following the restaurant's launch.

"When you don't have that many reviews -- if you have, say, less than 20, and you get slammed by one, that's 5% of your average rating," he said.

Ross often sends private messages to unhappy customers, offering them gift certificates or free meals. He said he never explicitly requests a review change, worrying that the appearance of a quid pro quo exchange might make his outreach seem less than genuine. Still, he says, about half the customers will change or update their posts.

"It's just an extension of what we would have traditionally done in-house, someone flagging me down from their table and saying, 'I can't eat this,' " he said.

Yelp, considered the leader among user-generated reviews, refused to release data on how many business owners are active on the site.

But the number has increased considerably in the last couple of years as features were added allowing owners to publicly comment and add information to pages about their companies, said business outreach manager Luther Lowe.

Lowe said Yelp discourages business owners from offering freebies to reverse reviews, a practice he describes as "ex post facto bribery." But he acknowledged that it happens.

"It pollutes the spirit to go in there and say, 'Hey, thanks for the five stars, come back in and we'll hook you up,' " he said. "Yelp thrives and is trustworthy because the reviews are unsolicited. There's been examples of many shady business owners getting shredded in the talk threads."

The better approach, he said, is to simply apologize and promise to do better the next time.

As for White, she refused to take down her review. In fact, she posted a follow-up alerting fellow Yelpers that the spa tried to bully her into deleting that first critique.

Her mother is still waiting for her refund.


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