Editor’s note: Aimee Millwood covers e-commerce marketing, growth and engagement for the Yotpo blog.
Reviews impact everything: what brands we trust, what we purchase, what we eat, and even how we travel. Online reviews have factored into my purchasing decisions as a millennial. I was barely a teenager when Yelp was founded, and today, over a decade later, reviews have transformed the online consumer landscape. Yet what does the future hold as we enter an age when even the customer – the restaurant diner, cab rider, and home guest – is up for review?
Trust as the currency of the sharing economy
The practice of two-way reviewing recently gained attention when news washed up that Uber was reviewing riders without their knowledge. Uber, of course, is not alone in the practice: bilateral reviews have been integral to building trust on Lyft and Airbnb’s platforms.
The rise of two-way reviews and the rise of the sharing economy have gone hand in hand. Sharing with strangers relies on trust. Online, trust is built through reviews of past behavior and actions. In this way, trust is the currency of the sharing economy, and reviews the basis for earning it.
Reviewing both sides has its benefits: it builds transparency and keeps people accountable while improving conditions all around. A Lyft rider deserves to know if a driver is safe before getting in their car, just as a driver who is asked to go out of their way to pick someone up deserves to know if the passenger has a history of cancelling rides. An Airbnb guest deserves to know if the homestay meets their needs, just as a host has a right to know if someone has a reputation for leaving a home in disarray.
When the Uber news broke, many riders were upset because they had no idea they were being reviewed or what the criteria for rating was. The subjectivity of reviews is a dangerous, slippery slope. How can people be measured when there isn’t an accepted criteria for rating? We don’t give grades in school without an understanding of what gets an A, so why do we dole out five stars when there isn’t a set understanding of what five stars really means?
As “five stars” becomes the new accepted average, the value of stars is distorted.
The sharing economy may very well need bilateral reviews to create a basis of trust, but this system isn’t necessarily ideal in every business sector. Take a look at eBay, which used bilateral reviews until 2008. The failure of bilateral reviews for eBay identified a major issue: Paying customers don’t necessarily jump at the idea of being reviewed.
It’s in line with the “customer’s always right” mantra. On eBay, if a customer is forking over $20, they’re paying for a product: in this transaction, they’re giving money to get something in return. While the standard economy has clear lines of what constitutes buyer and seller; in the sharing economy, the lines are blurred. In a sharing economy, drivers are paying for Uber’s service, riders are paying for a taxi, and everyone is potentially subject to review.
Boston University researchers, interested in the impact bilateral reviews had on overall ratings, studied the same properties on TripAdvisor, which does not have bilateral reviews, and Airbnb, which does. The research found that on Airbnb, ratings for the same property were 14 percent higher than on TripAdvisor.
This is a big difference when you consider that sales across industries nosedive by slight differences in star ratings. Customers are 3x less likely to book hotel rooms with a three-star rating than those with five stars, and for e-commerce stores, products with a four-star rating get 11.6x more orders than those with three.
What’s causing the discrepancy? It may be due to simple social pressure. In an open, bilateral review systems, many give good reviews to get good reviews or to look good. Consider the guest who gives a 5-star review for an Airbnb stay, despite the broken air conditioner and moldy fridge, because he didn’t want to receive a bad review in return.
Aware of this issue, Airbnb changed from publishing reviews as they were collected to revealing reviews once both parties had submitted (or 14 days after the trip ended). Yet this doesn’t account for a second social factor: People want to look good. In social settings in which people’s identities are not anonymous, people tend to shy away from saying bad things because they don’t want to be the one who seems like a constant complainer or never-ending nagger.
Not everyone is 5 stars
You’ll never see a driver with less than a 3-star rating on Uber, but that doesn’t mean Uber doesn’t have 3-star drivers. The majority of people are mediocre. As “five stars” becomes the new accepted average, the value of stars is distorted.
Looking for issues in perfect reviews may seem counterintuitive, but doing so has revealed valuable insight into customer feedback.
Businesses and service providers are turning to begging for effortless ratings rather than working hard with the knowledge their rating will accurately reflect what they provide. The overwhelming problem today is that, in the sharing economy among services like Airbnb, Uber, and Lyft, reviews can’t necessarily be trusted. When “5 stars” is subjective, and service providers need high ratings to keep their job, and customers need high ratings to get service, everyone’s fighting dirty to keep their reviews high.
Reduce the stigma of negative reviews
There are three main things that must be established so bilateral reviews can work. First of all, there must be clear-cut standards, understood by the people on both sides, of the rating criteria. Secondly, businesses must follow in Airbnb’s steps to ensure reviews are not retaliatory and offer anonymity if reviewers would prefer to backlash. Last, but definitely not least, we must reduce the stigma of negative reviews.
The fear of negative reviews is the No. 1 issue, yet negative reviews are not all bad. Negative reviews can have positive impact. In the future, the hopes would be that brands would look beyond the star rating. Nordstrom sets an incredible example of this, analyzing even five-star reviews to understand the underlying sentiment and find holes they can fix. Looking for issues in perfect reviews may seem counterintuitive, but doing so has revealed valuable insight into customer feedback.
In order for reviews to work in the long-term, we need to make efforts to move beyond the stars and set a system that is both verified and standardized, as well as free from social pressure.