Saturday, September 11, 2010

Reduce Bias in Customer Reviews of Services

Why did Howard Johnson’s Restaurants take a spiraling dive into failure starting in the mid-1970’s. The oil embargo of 1974 curtailing the road travel that fueled their business? The loss of a quality image when, in response to the rise of McDonald’s, Howard Johnson’s Restaurants cut back on both staffing and food quality?
     At the time, some industry experts posited another reason: Howard Johnson’s Restaurants were placing too much importance on customer review cards filled out by people at the cashier station. As the restaurants suffered sales losses, they became increasingly insistent on asking customers for feedback and then repeatedly switching business strategy to take account of the comments.
     What the managers failed to acknowledge, said these industry experts, was that customer reviews have a negative bias. The anecdotal—perhaps overly cynical—rule of thumb is that a customer most likely to take the time to fill out a review card is somebody so upset that they’re one step short of suing the restaurant. The result is an unrepresentative sample of strong negative opinions.
     The anecdotal wisdom is that any glowing positive reviews are most likely to come from somebody who has a son or daughter working as a server or in the kitchen. Usually not enough to outweigh the negatives, although it sometimes does, which creates an unrealistic positive bias.
     In a three-nation study, researchers at Hebrew University of Jerusalem, Stanford University, and Korea University find that overall, there is indeed a negative bias in customer reviews of services. Based on those research findings and others, here are ways to reduce the bias:
  • Wait until after the service is delivered before asking for an evaluation. Being told in advance that you’ll be asked to evaluate a service leads to more negative evaluations.
  • Put the customer in a positive mood during the transaction. One of many ways to do this is to offer an unexpected discount.
  • When you see a common theme in a set of negative evaluations, address any shortcomings in ways that are profitable for you. Then publicize the changes. Continue to ask customers to evauate you after each service episode of that type.
Click below for more:
Ask The Customer for Their Opinions of Items
Ask for Specifics on Merchandise Returns
Profit from Shoppers’ Positive Moods
Have Unannounced Discounts on Common Purchases

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