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The cost of a bad review for brands

January 21, 2011

This article from Canada’s Financial Post was sent to me from a colleague.

It’s called “Is social media sabotaging your business

But it misses a much bigger story.

In the article, the author talks about visiting Staples.ca and finding a bad review for an oil-filled radiator/heater.

“I noticed there was one product review from a Staples customer, so I clicked to read it. …The review is a salesperson’s worst nightmare. It’s from a dissatisfied customer named “JJ” who bought a radiator and had it spring a leak within two months. When JJ tried to return it, Staples told them it offered only a one-month warranty for exchange; JJ would have to contact the manufacturer.”

He goes on to chastise Staples. He thinks Staples should offer a new product to JJ. He thinks Staples doesn’t care. And that does seem to be the case.

The problem is: Staples doesn’t make the product that JJ hated. Staples stocks and sells this oil heater.

You can imagine that Staples and many online retailers will begin to look at negative reviews and instead of dealing with the reviewer, deal instead with the brands. Or, they’ll do both.

But the fact is, if Staples stocks a product that people think is bad, the solution is stop selling the product and finding something better. I’ve heard that Walmart has a policy that says if a product gets a certain number of negative reviews it gets pulled from the site.

Retailers don’t want to be held responsible for the reviews of bad products. They don’t want articles like this one.

Eventually, it won’t fall to Staples to solve this, but on the brand that makes the product Staples shelves. They need that review to go away, or the product will go away from Staples/Target/Walmart, etc.

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9 Comments leave one →
  1. January 21, 2011 8:49 am

    I agree, social media is changing the landscape of who really owns the consumer and how much a retailer can control the conversation at the salesperson level. Also, trust is shifting more to the influencers in the social media realm.

    Spifs can no long weigh the actions of salesperson like it has in the past. Retailers that act on consumer feedback, like Walmart, must act on social media input because competition for store/site traffic will force them to keep the best product on the shelves/catalog.

    Great post.

    • January 21, 2011 11:59 am

      Thanks Tim. I think the point is, bad review is an emerging metric for retailers. What they do with it is what is most interesting to me. Since it’s interesting to some of our clients.

  2. Rod Gotty permalink
    January 21, 2011 8:55 am

    “the solution is stop selling the product and finding something better”

    “Eventually, it won’t fall to Staples to solve this, but on the brand that makes the product Staples shelves”

    Actually, I believe that the responsibility does fall on the retailer and not the manufacturer for a a couple of reasons.

    First, retailers such as Staples, Office Depot, Office Max, and others often stock and sell merchandise in such a way to give the impression that the product is their own brand. In many cases the model# for the item is specific to the retailer so that the retailer can advertise that they have the lowest price. The claim is based on you finding the item with the same model# elsewhere for a lower price. Since the model# is only for that retailer (Staples), nobody except for the retailer will be selling that model# and therefore you will never find it elsewhere for a lower price. However, if you have a problem with the item then the retailer (Staples) abdicates their responsibility and sends you to the manufacturer. The problem is, you didn’t purchase the item from the manufacturer – you purchased it from the retailer (Staples) thinking that since the retailer (Staples) is a well-known company, you should not have any problem in getting support from them for their own products.

    Second, the reason why it is not up to the manufacturers but up to the retailers is because there will always be manufacturers who produce and sell (to retailers) products of varying levels of quality for varying levels of cost – that is simply the nature of business. If the manufacturer can cut their costs for producing a product which results in an inferior quality product yet can still sell enough units to retailers to make a profit then they will continue to do so. It is up the to retailers to identify the best quality/price mix for the products they sell based on the image they want to project: lower prices for lower quality or higher prices for higher quality.

    -Rod

    • January 21, 2011 11:58 am

      Rod,

      Thanks for the in-depth comment. I think bad comments on a retailer website will always be the responsibility of the retailer. We just disagree on how they will take care of the reviews.

      I think retailers will begin to lean on manufacturers to respond to negative reviews in return for shelf space. I also think that negative reviews can be a tool for retailers to learn about products they should have on the shelf. You wrote:

      “It is up the to retailers to identify the best quality/price mix for the products they sell based on the image they want to project: lower prices for lower quality or higher prices for higher quality.”

      They can do this through reviews, right? Get x negative reviews and the retailer will consider pulling the product.

      Like I said, I think negative reviews will eventually be a metric by which retailers determine shelf space. It won’t be the only one, but it will matter.

      Again, thanks for the comment.

  3. January 21, 2011 9:24 am

    Lots of very helpful info.

  4. January 21, 2011 3:49 pm

    Well said Rod. Perhaps retailers will wake up and realise there is a difference between “good value” and “cheap crap”. No one wants to buy something that breaks the minute you get it home, no matter how low the price.

    • January 21, 2011 4:28 pm

      Hi Amanda, thanks for commenting. Long time no talk. Anyway, I agree with the sentiment of your comment, but tend to disagree. People seem to buy based on cost, without considering the longevity of something that costs more. It’s an effort to get people to think value over price.

      Matt.

  5. January 22, 2011 8:59 pm

    Hi Matt, Hope you are well. I agree cost usually wins the day. I want to add I think there is a tipping point. “Longevity” suggests the purchase might work even if it is a bit more prone to breakage. Low price, for a low quality good is okay if it sort of does what it is supposed to do. Unfortunately, some purchases simply don’t work. This is damn annoying and makes me think twice before purchasing again from a retailer.

    I remember when I was doing up my house and I bought some light fittings and lamps from Home Depot. I bought them based on cost, foolishly thinking they were cheap because they were not exactly the finest looking things. I thought, “They’ll do until I find some lights I really like.” I really wanted to believe they would be functional. Every single one was faulty and had to be returned immediately. Why do they sell things that don’t work? They might as well have sold me a bag of carrots to light my house. They wasted my time. I rarely shop there now.
    Best, Amanda

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