When conducting reputation research on a company, you are not searching for “perfect” companies – and there are no perfect companies. Rather, you are trying to discern a company’s behavior when things go bad for its customers, and the facade is stripped away.
Start with complaint patterns, not star ratings
Review others for this listing backwards. First look at the 5 star rating and then read the most recent negative review. Look at the pattern of complaints over time.
Guest comments with negative feedback often follow a pattern or theme. As opposed to a one-time fluke, several comments spread out over several months are unlikely to be the result of a problem that has gone away by the time you visit. Hence, feedback like “the company suffers from scheduling problems” from customers over several months means you will likely encounter scheduling problems. Likewise, feedback like “the service at this restaurant is so poor during rush” from several customers over months means you will encounter difficulties with the restaurant as a result of its volume. Yes, this is still negative feedback, but it is more predictive than typical negative feedback, and can be far more honest than just reading a glowing marketing pitch.
Weight the severity of your complaints against how frequently you are a customer of that department. While a dozen complaints about how slowly your service check arrived might weigh less than three complaints regarding irregularities in payments, a constant stream of gripes regarding relatively minor matters would indicate to management that they are unable to handle even basic problems or simply do not care.
Official consumer reviews, whether negative or glowing, can provide insight into a company or retailer’s reputation and overall shopping experience. However, unofficial negative reviews may outnumber positive reviews. Looking at official complaints filed with consumer protection agencies and reviews posted with the Better Business Bureau can help sift through the mix. Many databases, including regulatory and consumer complaint databases, track records of complaints and resulting actions as well as any lawsuits that have been filed against a company. Additionally, specialized business complaint records databases can provide more focused information about specific industries and their complaint patterns.
Evaluate response quality
We scored each company based on whether or not each individual customer service interaction ended positively for the customer. As part of our evaluation we also considered the industries and customers that each company serves – some have particularly challenging customers in certain industries, for example. We also considered how effectively each company resolved individual customer complaints.
Strong corporations are fast with substance. Weak corporations ignore your customer complaints, or go off track with generic apologies, and fight to explain why they weren’t responsible.
Timelines often expose true priorities. When a company responds to a positive review in a matter of hours yet fails to address a negative review over the course of weeks, the reason for this disparity is clear: positive feedback truly is their main priority.
Check operational transparency
A transparent company is visible for its clients. On the website you should be able to find the prices, policies and procedures. Information that should be easily accessible not need to be asked over the phone.
- Transparency – How Do They Handle A Change? Does the customer receive notification of changes to their policies (even temporarily)? Are mistakes admitted publicly?
Research leadership stability
We have learned of significant leadership turmoil at this retailer with a number of key leaders having moved on in recent months. Additionally, there seems to be some confusion regarding day to day leadership of the organization. This type of confusion can translate to inconsistent experiences for customers. This information can be found in business registration databases, on LinkedIn and in various industry publications.
Look at the tenure of the individuals who are key to your due diligence and their experience at past companies. For example, the CEO of the company we invested in had left the previous 3 companies under somewhat dubious circumstances.
Cross-reference multiple sources
Unfortunately, it is difficult to get a comprehensive look at any company by reviewing only one source of information. The Google reviews will differ from the information found on Yelp, and Yelp will differ from the information found in industry specific forums where actual practitioners of the service will discuss problems with their service that may have never surfaced in other reviewed sources of information. Additionally, it would be wise to look at the news archives of local sources of information for any negative articles written regarding the regulations that control the service provided by the company as well as articles regarding legal problems that the company or its employees may have been involved in.
Records of licensing violations, safety issues and other regulatory complaints against contractors can be found in government databases, in addition to reviews of a contractor from other sources. Some industry associations and trade groups provide online directories of certified members. Additionally, contractors often describe their company culture and how they interact with customers on their website through social media outlets, providing another source of information that formal reviews don’t provide.
Why should you have to spend years researching each product or service before you can make a good purchase? Instead, take 30 minutes to research an investment company, a lawyer, a contractor, or roofer before you sign a contract. Any reputable company or service provider will welcome your inquiry and answer your questions.