On Monday, Attorney General Eric Schneiderman published a press release about an investigation that was conducted by New York State around the solicitation of fake online reviews. Online reviews are a great way to provide customers with reassurance and confidence in your products and services, but some companies were buying fake online reviews to provide a boost of positivity to their business. The FTC has already considered this illegal, and has recently been taking immediate action on companies that are found buying these fake online reviews. Watch today's video to learn more about the investigation, the impact online reviews can have on your business, and how to implement them the right way.
Hello, and welcome to our video where we’re going to be talking about how New York State has recently been cracking down on fake reviews. I’m Chad Hill and I have Adam Stetzer with me.
Good afternoon, Chad. The FTC has always considered fake reviews to be illegal (a lot of people call that astro-turfing), but they haven’t done a whole lot on enforcement at the federal level. So, the news today is that New York State, in what they’re calling “Operation Clean Turf” has been really targeting companies that are soliciting fake reviews online as well as the companies that are buying them.
This has been a year-long investigation, and seven companies have apparently been caught taking advantage of these services. In New York State, they’re levying fines, and there were nineteen companies total that were penalized after the investigation. Penalties ranged from $2500 up to $100,000 totalling in about $350,000 worth of fines for companies that were engaged in astro-turfing, or fake reviews. So what’s going on here, Chad? Why is this such a big business?
Well, the numbers are pretty staggering when we look at how these reviews actually influence behavior and the choices people make about businesses they want to work with. I have some stats here:
- 70% of people consult review ratings before making a purchase decision
- 63% are more likely to purchase a product from a site if it has product ratings or reviews
- 71% say that customer reviews make them feel comfortable about buying the right product or service
So these are really critical in online marketing, and your decision about a company you’re going to work with has to be based on more than just the website you see. You want to get opinions from others who have been working with them. So, what’s happened is that businesses out there, more than ever, are looking to show positive customer reviews, and in some cases like this, they may be crossing the line about how far they should actually go to get those positive reviews.
Right, and the internet has sort of been like the wild west with so much anonymity. It’s been fairly easy to do this, and it’s not surprising that businesses have cropped up to try and take advantage, organize, and monetize the work process behind soliciting these. New York State has a long history of taking on issues such as this with other major investigations into Wall Street and insurance industry problems throughout its history. So, it’s not a surprise to see New York be the first mover ahead of the federal government.
But what does this mean for small business marketers? Does this mean that small businesses shouldn’t be soliciting reviews? Those numbers you stated made it sound like it should absolutely be part of your marketing strategy. But, just like everything else we talk about, whether it’s how you do PPC, how you do SEO, or how you do social media, there are good and not-so-good ways to fold this into your strategy.
Right. This is one where you do the initial gut-check on it, and it just doesn’t sound good. It turns out it’s not good at all. The right way to do it is to figure out places where you have contact with your customer base, and you suggest to them that you get a lot of business from referrals and that reviews help your business. So, “If you’d like to help me out, I’d really appreciate a review.” One way that we recommend for people to do this is, for example, having a section in your monthly newsletter that says “Reviews are important. Click here to write a review about our business,” or, a lot of people will put that on the website itself. So, there are the right ways to actually request reviews, but as you can see, it takes more effort to get reviews the right way than it does the wrong way. But, in the long run, it’s the best thing to do.
And the “Freedom of Speech” folks will probably rise up in opposition to some of what’s going on here, but I do think the FTC has been quite clear in their truth-in-advertising bylaws and guidelines. If you accept any kind of endorsement or sponsorship, it needs to be very conspicuously disclosed, and that’s where you run into hot water with soliciting reviews. If you even include some sort of incentive, you’ve crossed the line there, and the FTC has rules about that that make it illegal.