Editor’s note: Tim Handorf is president and co-founder of G2 Crowd.
In 2008 I was working at BigMachines, a B2B software company in the sales automation space. That year we made the controversial decision to invite prospective clients to our annual user conference. Traditionally, we didn’t invite prospects. We knew some of our customers weren’t 100 percent happy with the product, and we were afraid they would scare away business.
But we decided to invite a handful of prospects. Of course, our customers told them negative things about our product and asked us some very critical questions in a very public forum. But believe it or not, every single prospect that attended became a customer.
We were thrilled with the results of our experiment, but also very surprised. We noticed how review sites like TripAdvisor, Yelp and Amazon were impacting B2C companies, and data backs that up. As Harvard Business School’s Michael Luca found in 2011, a one-star increase on Yelp can lead to a 5 percent to 9 percent increase in revenue. Recognizing the power that reviews hold, some business owners have resorted to falsifying reviews for themselves and their competitors; as many as 16 percent of restaurant reviews are fraudulent, according to follow-up research that Luca and Boston University’s Georgios Zervas published in 2013.
Understandably, most B2B companies fear rather than embrace negative reviews and press. From inside their companies and from investors, there is immense pressure to keep the public image strictly positive. Though researchers haven’t explored the effects of negative reviews specifically on B2B software companies, they have uncovered evidence that negative reviews can be powerful assets under the right conditions. Like the customers who criticized BigMachines, your negative reviews may actually build the trust and awareness you need to convert prospective clients.
1. Negative reviews help if you ‘re relatively unknown
In a study of New York Times book reviews, the Wharton School’s Jonah Berger and associates found an interesting discrepancy: Positive reviews always increased sales, but the “effect of negative reviews depended on whether the authors were new or well established.”
Berger and his team analyzed sales patterns of nearly 250 works of fiction and discovered that for relatively unknown authors, a negative review boosted sales by an average of 45 percent. On the other hand, negative reviews of well-known authors hurt sales by an average of 15 percent. For lesser-known authors (or brands), the increase in public awareness appears to more than offset the negative impressions.
In other words, for a small, relatively unknown software company, getting a high volume of reviews is almost a guaranteed win. The good reviews and bad reviews alike have the potential to bump sales.
2. Polite language can give a negative review a positive impact
The language of bad reviews can affect whether they increase or hurt sales. In an article titled, “We’ll Be Honest, This Won’t Be the Best Article You’ll Ever Read: The Use of Dispreferred Markers in Word-of-Mouth Communication,” researchers found that the politeness of language in a consumer review can drastically affect a reader’s perception of the reviewed product.
With “dispreferred markers” such as, “I’ll be honest”, “Don’t get me wrong,” or “I don’t want to be mean, but…” preceding a negative review, people find the reviewer to be more likable and credible. The researchers also found that these positive feelings spill over to the product or service itself, leading readers to find the brands more sincere. In fact, test subjects who read reviews about a luxury watch were willing to pay an average of $135.58 when the critical review contained a dispreferred marker. When the reviews did not have one, subjects were willing to pay only $94.67.
So the tone of conversation on a review site can be a huge factor. On sites where consumers tend to make nasty, unqualified remarks, negative reviews have more potential to hurt than help. On the other hand, review sites with a more professional, informed and polite tone might generate reviews that benefit you whether they are positive or negative.
3. Bad reviews have other benefits
As a co-founder of G2 Crowd, a review site for B2B software vendors, I know visitors to our site are more interested in reading negative reviews. I know this because we see three times as many clicks on negative reviews than on positive reviews. In addition, vendors that have a significant number of reviews with a healthy distribution of negative reviews tend to get the most leads. We can’t determine the reason for this from our own data (yet), but research from Revoo, a rating and reviews service, might hold the answer.
In surveys conducted in 2013, Revoo found that 68 percent of consumers trusted reviews more when they saw both good and bad scores, and 95 percent of consumers suspected that the reviews are fraudulent or censored when they didn’t see bad scores.
Accordingly, Revoo found that consumers seeking negative reviews spent roughly five times as long on the site (26.1 minutes versus 4.6), and they were 85 percent more likely to convert (4.35 percent versus 2.35 percent). Revoo suggests that the extra time visitors spent on the website might be the key factor in increasing conversions, but it’s hard to say. We’re just scratching the surface of this issue. What we know is just how much we don’t know about the influence of negative reviews.
So according to the scholars, your popularity and the type of language in a negative review heavily influences the impact. If you’re young and unknown, don’t fear a negative review. In fact, consider “hacking” your growth by generating lots of reviews on highly public and reputable platforms. The awareness brought to your brand is more valuable than the positivity or negativity of the review, at least in the short run.
If the reviewers are polite and authentic with their feedback, the reviews can strengthen perceptions of your brand even if you’re just starting out. Therefore, finding a polite, professional review platform is crucial. At the very least, Revoo’s research suggests that negative reviews will grip consumers’ attention, and likely lead them to spend more time browsing your website or reading your other reviews.
Don’t be afraid of negative reviews, and don’t try to hide them. Part of being a company, and part of engaging on the social web, is being vulnerable. The best thing you can do is take care of your customers, and if they do write a negative review, reach out. Consider it an opportunity to learn and improve rather than be embarrassed by it. And who knows – your most critical customers might help you close a few deals at this year’s user conference.