For this survey, I asked each respondent to rate 4 sources of consumer driven information on a scale of 1 (least reliable) to 10 (most reliable) in determining whether or not they would use a company for the first time. They were also asked to briefly explain their ratings. Here are the averaged ratings for each category:

Disclaimer about the survey method.

I did this survey on a small scale and used a rather informal distribution method (my email contacts). The results above are from about 40 email responses and although I would consider this survey sample small, I think the results still provide a relevant estimation of today’s consumer buying behavior. Using the data above in conjunction with the additional explanations provided and my personal knowledge of the survey respondents’ demographics, I made the following observations:

Observation #1: Online Reviews

Anonymous online reviews scored least reliable as many of the respondents noted the increasing trend of fake reviews and the belief that only a small portion of customers with extreme experiences (either good or bad) take the time to write reviews online. However, many respondents pointed out that online reviews are the most plentiful and easy to access of any of the above sources and therefore are used most frequently when evaluating businesses.

Observation #2 BBB

The Better Business Bureau easily attracted the most polar responses garnering trust from older respondents (40 and older) and being more or less ridiculed by the under 40 crowd. The older respondents used phrases such as “feel good”, “trust”, and “well known” when describing the BBB. The younger respondents had more verbose comments such as these:

“The BBB sticker on a business actually means nothing to me and I would even go so far as to say the sticker makes me wonder what the business is hiding from — are products and services of such poor quality that they need the sticker to encourage me to use their business?”

“I’m sure there are lot of good companies that aren’t members, and a lot of crappy companies who are members.”

“The BBB is just trying to make money like everyone else. I don’t know that they always have the consumers best interests at heart.”

Another factor that kept the BBB at the bottom of the pack was that many respondents simply did not know enough about their membership process or how a BBB membership correlates with trustworthiness.

Observation #3 Independent Survey

Most respondents considered a customer satisfaction survey to be a highly reliable source when evaluating a business as long as the survey wasn’t gamed and had a good sample size of respondents. In fact, a few respondents indicated that they would trust a survey even more highly than a referral due to the fact that a referral is based on one person’s experience where a survey is a broader sampling of experiences. The single common factor that held back customer surveys is that they are nearly impossible to find for local businesses. This is one source customers would like to see more of.

Observation #4 Referrals

It comes as no surprise that people generally trust referrals above any of the other sources mentioned. This source was mainly included as a base to measure against. Any business owner knows the biggest downside to utilizing this source is that you are limited by the willingness and availability of your satisfied customers to do this for you.

Takeaways for Business Owners

#1 Online Reviews Still Affect your Business

Just because online reviews have the lowest credibility does not discount the fact that most of your customers will view them and be influenced by what other people are saying about you online. In recent years, online reviews have become the primary source for customers looking to compare similar companies. Pay attention to the various review websites and actively encourage your satisfied customers to post their positive experiences online.

#2 Is BBB worth the Cost?

There are many forms of BBB membership to consider as well as your business type and target market. If you are in a business with high amounts of distrust and are targeting older customers, the BBB might make sense. Overall BBB usage by consumers seems to be on a downward trend and may soon become obsolete as review websites become better at filtering fake reviews and customers have more options for comparing businesses online.

#3 Utilize customer surveys in your marketing

Whether you serve 1 customer a month or 500, customer feedback collection can be incorporated cost effectively (thanks to the internet) with your customer service and marketing plans. We even offer a free trial of our professional survey service, Survey Local, so that you can see how easy and valuable feedback collection can be. Also, Survey Local gives you the option to publish your survey results right on your website (and on ours) so that potential customers can easily find and read them. Making this information available to potential customers will really help you stand out from your competitors.

#4 Promote Word of Mouth Marketing

As mentioned above, the best way to get more referrals from your customers is to first of all find out what you are doing right and where you need to improve. It doesn’t matter how good you think your business is because you’re not the one making the buying decision. Fortunately, the internet makes feedback collection more affordable and easier than ever.

The Domino Effect

All the sources measured in our survey are direct reflections of your customer service. By measuring and improving your customer service you can effectively improve your results in all 4 of these categories. Our survey tool is designed to easily integrate 3 of these sources by collecting customer feedback, screening the good from the bad, and helping you get noticed both online and off for the good things you are doing. Give us a call to get a free 30-day trial of Survey Local today.

Comment on this post if you agree or disagree with the survey results above so we can broaden the sample size!

According to the Federal Trade Commission (FTC) press release (5 Oct 2009):

“The post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.”

Given the core of social media is transparency and honest discussion, most bloggers and word of mouth marketers agree with this policy.   We have a published disclosure policy on this blog and have encouraged other bloggers and social media marketers to do the same in the past.  However, for social media marketing, the method for disclosure is not as straight forward.   We occasionally send tweets about our  (Seven Aspens’) clients and/or their products. How do you disclose in a 140 character Twitter message?

With potential hefty fines looming for violators, this is a good time to review your policies, ensure compliance and learn the best practices.  To assist in the education process, the Word of Mouth Marketers Association (WOMMA) is hosting a free webinar Thursday, October 8, to help explain what the new FTC regulations mean for marketers, advertisers and bloggers. Additionally, the Social Media Business Council provides a great Disclosure Best Practices Toolkit.