We’ve come a long way since lengthy customer feedback paper surveys were introduced, and technological developments have transformed retailer and consumer communications.

We’ve come a long way since lengthy paper surveys were first introduced to gather customer feedback. Technological developments over the decades have transformed the way that retailers interact with, and learn from, consumers into the sophisticated tools we see today.

We have also seen explosive growth in customer reviews over the past few years and the power of such customer reviews is undeniable. A recent study from the Nielsen Company found that 84% of people trust online recommendations from friends and 68% trust consumer opinions posted online, which rank #1 and #3 respectively in terms of trusted advertising sources. And not only do people trust these recommendations, but they are also using them to make purchasing decisions - three quarters of people say they use Facebook to make decisions about where to shop or eat, and half have tried a new restaurant based on a recommendation they saw on social media.

So, are we witnessing the latest feedback evolution - are social media reviews the new customer surveys?

For retailers, the emergence of review sites is a double-edged sword. Amateur critics tend to write about either great or terrible experiences, and leave reviews full of glowing praise or angry complaints. And these online comments can have the power to either make or break a business’ reputation.

There are four main challenges with review sites:

Quality of reviews As some recent media coverage and legal cases highlight, because it has been suggested by some that on occasion certain online reviews may or may not be from real customers, their quality could have the potential to be questionable. The largest review sites apply sophisticated algorithms and other safeguards, screening reviews for authenticity. But even for the reviews that make it through this process and are ultimately recommended, it can be impossible to guarantee that the reviewer actually had an experience with the brand.

Quantity of reviews With typically only a handful of customers posting an online review, there just aren’t enough reviews for a consumer to make a well-informed decision.

Recency of reviews Reviews can often be old and not a fair representation of what is actually happening now at the location.

Focus of reviews Because consumers are commenting on whatever they choose (rather than being directed with specific survey questions to service elements that are most important to drive brand loyalty), there is no way to know if the comments will actually help retailers to improve. A reviewer saying the ‘service was poor’, for example, gives the store manager nothing to go on to know which element of the service was poor - was it the lack of knowledgeable shopfloor staff, delays at the tills, the changing room experience, or all of the above?

While we can acknowledge that reviews are definitely a new type of survey, they’re unlikely to displace all other types. Reviews do provide a good indicator of overall performance and how a location measures up against a few basic key drivers. But retailers also need to delve deeper by asking specific questions to enable managers to understand which elements are most important to a great brand experience, and also help drive the right front line actions to ensure those key elements are consistently delivered.

So, how can retailers uncover the needles of actionable insights in the ever-growing haystack of customer feedback in all its diverse forms? And, in particular, how do they best leverage the growing phenomenon of online reviews?

The good news is that since those days of paper surveys, we’ve gained decades of experience figuring out what data has to say and how to make use of it. Through today’s enhanced text analytic tools, businesses can now gather any unstructured text feedback, such as online reviews, and view it alongside structured survey feedback to give enhanced customer insight to drive operational improvements.

Transparency has become of paramount importance for brands wanting consumers’ trust and custom. Products such as OpenTell have been developed to overcome the current challenges brands face with review sites, collecting authentic reviews in high volume and only allowing verified customers to publish reviews to avoid fraudulent activity from skewing customer ratings and influencing public perception.

If social media has taught us one thing, it’s this: power is now in the hands of individuals and every customer counts. Brands must learn to leverage their feedback to gain insight and harness the power of online reviews. In this data-driven age, using the right tools will help retailers to stay ahead of the competition by empowering them to turn insight into the right operational actions that drive business improvement.

  • Gary Topiol is managing director, international at InMoment