On today’s Business Beat, Jeff discusses a newly released study from CHEQ and the University of Baltimore, which found that fake reviews in the e-commerce market have resulted in a $152 billion problem.
Tune in to the Business Beat, below, to learn about these fake reviews on e-commerce sites and how to mitigate the costly problem:
“So, here’s the bottom line: if you’re an entrepreneur selling on your own website or selling on marketplace platforms like Amazon, you need to police your own reviews, and whatever you do, never provide an incentive to your buyers to post a positive review.”
– Jeff Sloan
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Good morning, Paul!
With all of the retail purchasing action online these days, consumer reviews have become an ever-more important driver in the purchase journey online but, unfortunately, waters are muddied by an onslaught of fake reviews these days. How big a problem is fake reviews? Well, how about a $152 billion problem, according to a new economic study by CHEQ and the University of Baltimore.
To frame it another way: in the United States, of the $791 billion generated in e-commerce revenue, a full $28 billion of it is consumer spend influenced by fake reviews. Multiple studies reveal at least 89% of consumers globally check reviews online before making purchases. Now, online behemoths like Amazon have policies, of course, against this kind of thing, but it’s frankly hard to police. Even so, Amazon is taking action to the degree that it can, claiming that it analyzes about 10 million reviews a month and purges many of the fake reviews. What sectors are getting hit the hardest? Well, the travel sector suffers the most from fake reviews, followed by electronics, furniture, fashion and entertainment. So, here’s the bottom line: if you’re an entrepreneur selling on your own website or selling on marketplace platforms like Amazon, you need to police your own reviews, and whatever you do, never provide an incentive to your buyers to post a positive review.
Instead, provide the highest level of customer service you can, and if you get a negative review, address it promptly, and fix the issue. One of the most powerful things you can do is to be transparent and to earn your customer’s trust by responding to those reviews online — most of all, if they’re negative. By doing so, you’ll turn a negative review into a positive one and, more importantly, you’ll earn that customer’s business long into the future.
I’m Jeff Sloan, founder and CEO of StartupNation.com, and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR.