While in Venice for a marketing conference, I spotted a very strange sticker on a restaurant’s door. It said basically “no to tripadvisor” and to dictatorship of consumers’ reviews. It made me think about how the business of restaurants’ reviews has dramatically changed in the last 10 years. One negative review is evaluated to a loss of 10000€ revenue by Pierre & Vacances, a tourism and leisure group generating 1.5bn € yearly revenues.
A business model that has changed
Until recently there was a monopoly on restaurants reviews. If you wanted to be advised in choosing a restaurant, you had no choice but to get a guide (Michelin, Gault&Millau, Zagat). Those guides employed professional reviewers to visit restaurants anonymously and to rate them. You were buying professional advices based on 3-4 visits a year. From a statistical point of view it was not really the most trustful source but those guides also allowed customers to report abnormalities, incidents that may trigger a new visit. Yet, the mechanics of those reviews remained largely secret which led to much fantasies on the part of consumers.
Within 10 years all that changed …
From a qualitative model to a quantitative one
Websites like Tripadvisor have empowered the customers. The basic principle of such a website is that the quantity of reviews will be be enough to balance the obvious lack of quality. Reviewers on Tripadvisor are people like you and me, with no professional background in the field of cooking. They judge according to their own criteria. This may be reassuring at first (because word-of-mouth works on the same principle), but it’s not. Like word-of-mouth, reviews are mainly triggered by emotions; positive and negative ones. You are more likely to give a review of a restaurant if you have been very dissatisfied or very satisfied. Those comments will lack objectivity.
We are in a consumer reviewing economy
From a broader viewpoint, we are now living in a world where the critics’ job has been largely taken over by customers. This started with Ebay, where buyers rated sellers; it continued with hotels, restaurants on Tripadvisor and Booking.com… and today you’re even rating your taxi driver (in the Uber application), any kind of business or shop (in Google business), teachers, the person who answered the phone when you called a service center.
This has unexpected consequences. It puts individuals under pressure, especially in business models which rely largely upon freelancers (like UberPop). In those cases drivers fear to have bad reviews because it might affect their employability, inducing counterproductive behaviors. For instance the interview of an UberPop drivers revealed that by fear of a bad rating he preferred cancelling a drive when seeing he couldn’t be on time.
Let me take first a scientific view on the phenomenon of customers’ reviews.
Some years ago I wrote a paper on co-creation and showed that we had been passing more and more tasks onto the customer since the 1970’s. A that time co-creation was still called “co-production”, hence depicting the underlying “productive” nature of the tasks taken over by customers. Customers were asked to assemble a piece of furniture in exchange of a better price; today collaboration is of a different nature. You may not expect a better price in exchange ofyour writing of reviews; at best you’ll get an online status that will be a testimony of your dedication to the platform.
Why are some people so motivated to do the job? Because of the power they feel they have. And yes, they do have power. The business that emerged with writing false reviews and the introduction on Tripadvisor of an “risky” status, shows the kind of pressure that can be put onto businesses. This is eventually bad because businesses have fallen into a dependent relationship to Tripadvisor and the like. Their revenues depend on reviews managed by the platform to which they pay a commission. Doesn’t it look like an insane situation? If you use the 5-Firces porter matrix, you may well tell restaurants have lost most of their bargaining power.
Posted in Marketing.