"Satisfied customers tell three friends, angry customers tell 3,000"

So asserts Pete Blackshaw, in his business book of that title[1]. Blackshaw warns that companies ignore dissatisfied customers in an online world at their peril, given "consumer-generated media" such as blogs and social networks enable just one unhappy customer to broadcast his or her complaints to many more. 

The book was published in 2008; an eternity ago in terms of internet and social media development. But the message remains as valid as ever – the numbers have just got bigger!

Reputation is a fragile thing

This is not a new problem for retailers; in the ‘bricks’ world, companies have traditionally devoted significant amounts of time and many millions to nurturing their brands; a brand that could be destroyed by a single ill-judged comment.

Think Gerald Ratner for an obvious example.

With a couple of flippant comments in a presentation in 1991, Gerald Ratner allegedly wiped £500 million from the value of the Ratners jewellery chain when he described one of his products as “total cr*p”. The company never recovered.

While the Press had a field day in 1991 – just imagine how many more opportunities there would be today for Ratners customers to comment on this own goal.

Your online reputation matters – a lot!

If you are among the many online retailers today operating without a well-known brand name or High Street visibility to rely on, you are effectively your brand. The way you handle customers at all stages in their dealings with you will determine whether or not they want to do business with you again; and crucially, whether they would recommend you to other people. You may not have the brand-building spend of the retail giants, but you must nurture your own reputation just as carefully.

Customer feedback is a key determinant of your reputation; and you need to manage it carefully. It’s a lot more difficult to restore a reputation after negative comments have appeared online than it is to prevent them appearing in the first place – or to be proactive and helpful in responding to them.

Most of the decisions we make today are driven by the feedback of others: where to eat, which hotel to stay at, where to go on holiday – right down to which hairdresser, dentist or doctor we use.

It’s all about reducing the risk; and it’s particularly important when we are about to make a purchase online. As we can’t see and feel the products we want to buy, the comments of those who have seen them in the flesh are the next best thing. And, if this is the first time we are buying from a particular retailer, it is also helpful to hear how they are rated by people who have already been through the purchase, delivery (and, if necessary, returns) cycle with them.

Feedback is important and must be encouraged across all the different channels where your customers are interacting: Amazon reviews, social media pages and your own website, for example.
 
But if you don’t manage it properly, it can turn into a monster.

 
How bad can it get?

Very bad indeed. Here are three reasons why:

1. The obvious one – you could be losing business: Buyers on marketplaces like Amazon rely on the seller ratings and are likely to pay a higher price for an online retailer with a higher rating score. That’s a potential missed sale for you
2. Your ‘bad news’ could be displacing you from the top slots in google searches; consumers are more likely to buy from sellers with 5-star ratings appearing – rather than from those referenced as unsatisfactory.
3. It could be messing up your Amazon performance metrics unnecessarily.

Amazon prides itself on offering great customer service; and your performance metrics must reflect this, based on your Order Defect Rate (ODR); percentage of cancellations; and percentage of late shipments.

In arriving at your ODR figure, Amazon calculates the percentage of your orders with negative feedback, an A-to-z Guarantee Claim or a service credit card chargeback. Note that in Amazon terms, a 3-star rating is considered ‘neutral’ and is lumped along with 2s and 1s under the ‘unsatisfactory’ umbrella – even though many consumers assume a 3 rating means ‘satisfied’. So you need to be getting feedback of 4 or 5. You should monitor your reviews carefully and address/resolve any unsatisfactory ratings where possible. Look out for recurring problems and address these promptly too.

You need an ODR of 1% or less; if it is higher, you automatically lose the Buy Box for all products, except those that are fulfilled by Amazon (FBA). Buy Box is available to only one seller per product listing and it is highly prized so its loss will impact your sales.

And ultimately, Amazon could suspend or terminate your account.

What can you do to manage negative feedback?

Obviously it would be good not to get any in the first place! As we are not operating in an ideal world, however, here are some things you can do to minimise the impact on your business.

1.  Remove Unwarranted Seller Feedback

Buyers don’t always realise that seller feedback shouldn’t be used for product reviews; but rather, as a means for customers to comment on their purchase experience with the seller.
NOTE: product-focused negative feedback left in this section will still affect your rating.

If the entire comment is a product review and doesn’t reference customer service or fulfilment at all, Amazon will remove it. You need to initiate this however – so monitor feedback closely.

Make sure that your customers are aware that the seller review should be used to comment on your performance in getting the product to them on time and as in the condition described and encourage them to use the product review facility to talk about the actual product features.

 
2.  Be realistic about your handling time

Amazon expects a ‘lead-time-to-ship’ of two days; within this time you have to receive and process the order, pack it and ship it. Be realistic about whether or not you can achieve this. Delivering orders late can have a negative impact on your Amazon seller rating – and can make buyers turn to your competitors who ship faster. Don’t promise a two-day ‘turnaround’ if you know you won’t achieve it.

3.  Respond to negative comments quickly

Customers appreciate a timely, honest response and even if they are still unwilling to change their comments, a prompt response will earn you brownie points with Amazon who keep track of all your email correspondence with customers.

 
4.  Remind customers how Amazon’s feedback ratings work

If you receive a seller review of 3, gently remind that customer that Amazon considers anything less than a 4 as a negative review – and this could ultimately impact on your ability to sell. Would they like to reconsider?

 
5.  Remind customers how easy it is to remove feedback once the issue is resolved

Only the buyer can remove his/her feedback.

If it doesn’t happen once you have resolved their problem, it may be worth reminding them that the process they go through to do this is very easy; even set it out for them, step by step.

 
6.  Contact Amazon

It’s not always your fault that shipping was late or the wrong product was sent. If the problem lies with the warehouse, but Amazon has not detected this, let them know and they will remove any associated negative ratings.

 
7.  Increase positive feedback

Be more proactive in generating positive feedback – for example by emailing customers immediately after a purchase. This will ensure that any negative comments will have less effect on your score.

8.  Make the process as painless as possible for the customer

Be courteous, positive and genuinely helpful in resolving customer complaints.

In conclusion, your online reputation is precious. The feedback you get can enhance your online reputation – or destroy it. Positive online reviews are key to customers finding you and buying from you.

Potential customers are trawling the web for the best place to spend their money. Make sure they find you!