Here’s another reason to offer an excellent customer experience: Customers are increasingly calling in the virtual torches and pitchforks when you don’t.

Whether it’s Angie’s List, Yelp, Amazon, Reddit, your own customer community website, or on social channels like Facebook or Twitter, there are plenty of places where people can complain about what they perceive to be bad treatment. Mishandle the negative reviews, or have an incident during a slow news week (like, say, the middle of summer), and it can go viral faster than you can say Barbra Streisand (more on her later).

Customers and potential customers are increasingly taking to user-review sites to check out vendors and products before they buy—as well as expressing their views afterward. This is great, right? All your customers are happy and they’ll only say nice things.

Maybe not. Just ask Comcast: Last month, an overzealous customer service representative didn’t want to let a customer cancel his Comcast service without finding out why. Maybe the company was only trying to learn  how it could improve its performance, but the customer in question was a former editor for an Internet site who Tweeted about it and included a link to the last several minutes of what became known as the Customer Service Call From Hell. Comcast was forced to issue a mea culpa with the promise that it would reinforce the notion of customer respect with its customer service representatives.

Unfortunately, any time a rating system is set up, people are inclined to find a way to game it. Customers have been known to decimate a company’s ratings for imagined slights, all in the hopes of getting a refund, a freebie, or just a bit of attention. On the flip side, some companies pay people to write good reviews about them—and/or bad reviews about their competition.

Be warned: user-review sites give the stinkeye to a sudden spate of five-star ratings from people who all joined the site on the same day to praise the same company, and Internet users are happy to publicize such platooning.

So what can businesses do to enhance or protect their online reputations? Earlier this week, we saw a great example of what not to do. The Union Street Guest House, in Hudson, N.Y., told guests it would charge an additional $500 for every negative online review. After a torrent of negative publicity, the hotel claimed the policy had been a joke and had never been enforced. Still, Internet vigilantes quickly found examples where people claimed the policy had been used against them. Meanwhile, the hotel garnered more than 500 one-star Yelp reviews as people posted their reactions to the news.

Are such fines even legal? Sure, writes attorney Eugene Volokh, but that’s not the point. “The main problem with the provision isn’t a legal problem; it’s a business problem, and a doozy of a problem at that,” he writes.

Some businesses are going so far as to file lawsuits over bad reviews. In one recent case, a French restaurant even won, although there have certainly been instances in which lawsuits have backfired on businesses. (Google “Yelp lawsuits” if you’ve got a few hours to kill.)

They also backfire on people:

In 2003, Barbara Streisand sued the California Coastal Records Project, which maintains an online photographic archive of almost the entire California coastline, because it included pictures of her Malibu house and invaded her privacy, writes The Economist. Ironically, her lawsuit called far more attention to the pictures than they ever would have received on their own—a phenomenon that is now known as the Streisand Effect.

So what is the best way to manage your online reputation?

  • Offer excellent customer service. (And, avoid “jokes” in your customer policies.)
  • Monitor customer reviews with tools such as Google Alerts and keep an eye on Facebook and Twitter posts. View a legitimate complaint as an opportunity to improve.
  • Look for fake complaints and unauthorized changes, such as the Washington, D.C., restaurant that believes a competitor hacked its Google Maps listing to say it was closed on weekends—when most people would want to go out to eat.
  • Be proactive by encouraging your customers to post about their experience—especially the happy ones. Don’t be only reactive, posting in response to single negative reviews.
  • Be honest. Skip trying to claim it was a joke or that you were hacked. Getting caught in a lie can be worse than the original offense.

Finally, think before you sue. Remember Barbra Streisand.


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