Landmark Case with TripAdvisor, Makes Businesses Think Twice About Reviews

It was announced on Wednesday, September 13th of 2018 that an Italian man would be jailed for nine months for running a business tied to fake TripAdvisor reviews.

Reviews, especially for consumer-based businesses, mean everything… and unfortunately there are too many businesses that are more than willing to circumvent systems to provide fake reviews for products and services. We always highly recommended against using these services, as at the end of the day, it will negatively affect your business. Not only do real customers eventually catch on, but organizations such as TripAdvisor, Facebook, Amazon, Google, and Yelp are all working on solutions to combat such practices. This means that those reviews will eventually fall off, and there could be other ramifications such as fines or banning from platforms completely.

Reviews are increasingly becoming a primary tool for consumers to make daily decisions on what to buy and eat, naturally leading to increased business for businesses with a plethora of positive reviews. Instead of risking long-term gains for short-term with providers offing fake reviews, 3SixtySMB recommends developing a strategy to interact with your customers and work towards getting real, credible customer reviews for the various platforms out there. Strategies can be anything from simply asking customers to post reviews, or offering incentives such as discounts for their honest take on your business.

Real reviews are also an insight into the soul of your business. We find that many disregard reviews with the belief that the customer doesn’t know what they are talking about, or that they as a “business owner” know what is best for the business. However, real reviews are the consumer’s perception of your business (good or bad), and insights like reviews can truly help you understand the strengths and weaknesses of the business in the eyes of your customers. Making adjustments to your business model as you learn about them through your reviews will help increase your overall customer experience and lead to increased revenue over time. We wrote a related article about this not too long ago (There’s A Problem, Stop What You Are Doing).

Finally, ensuring that you are monitoring these reviews in real time also gives a clear line of communication directly to your consumers. As an example, if a consumer had an issue with your business and you did not respond, you could lose a customer for life. Furthermore, they will tell their friends, and their review is now visible for the world to see. This means that one bad review left unaddressed can lead to multiple lost customers down the road. If you have a few bad reviews, you are now taking a significant hit to your business. Addressing issues in a professional and courteous manner can not only change the perception of a customer with a bad experience, but it also shows the world that you take your customer experiences seriously. Furthermore, positive reviews are not to be ignored. Take the time to thank someone that posted a positive review for their business, possibly even offer them a discount on their next trip in. Actions like this create loyal customers, and again, show the workers what type of business you run.

Reviews are truly an inside view to the soul of your business, both for your customers and your organization. Treat customers horribly, and everyone will know! Treat customers well, and everyone will know! Which do you think is better for your business? And when it comes to “paid reviews”, steer clear of them; they could be a path to short-term gains, however they will catch up to you in the long run… Finally, there are many platforms out there (TripAdvisor, Facebook, Amazon, Google, and Yelp), so do not make the mistake of only focusing on one. Where your customers are, you should be there as well!

 

Dine Brands / IHOP Announces Name Change to IHOb

Dine Brands / IHOP recently announced that they will be changing their name to IHOb, and we have two theories for this recent announcement. The first being that this could all be a marketing gimmick that will be followed by a change in their menu or business model which, depending on the change, might be beneficial to the brand. The other could be more serious—where they are actually moving forward with the name change. IHOP, owned by Dine Brands which also owns Applebee’s, has been relatively flat from a revenue perspective over the past years…. Recently, Dine Brands attempted a bold marketing strategy with Millennials, and ended up failing greatly due to their misunderstanding of the age group. The name change could be a very similar attempt by Dine to break from the struggling numbers they have been seeing over the past few years to satisfy investors.

Unfortunately, if Dine moves forward with a permanent name change of IHOP to IHOb, we believe it will be a truly wasted effort on their part. Anyone that has been to either establishment owned by Dine lately has noticed a drop in overall quality of the restaurants—a direct result of focusing more on cost cutting metrics instead of finding ways to truly be innovative to increase revenue.  Regardless of what you call IHOP, at the end of the day, they are still going to have an overall brand perception issue with the general public, and they will continue to see flat or declining numbers in the upcoming years. For their sake, let’s hope it is just a marketing gimmick. Again, this all sums up another educational lesson at someone else’s expense: to not rely on gimmicks, such as name changes, without a true fundamental change to the business model. A name change is just that—a name change—and it doesn’t fix a true underlying issue.

Target Uses Local Retail Stores As Virtual Warehouses

Over the past few years, Target has become increasingly more innovative to compete against other local brick and mortar stores and Amazon alike… As an example, back in December, they announced a new mobile payments system called “Wallet” that allows customers to quickly pay for items via the mobile application, skipping lines and speeding up the checkout process. Yesterday, Target announced Restock, a nationwide next-day delivery service targeted directly at Amazon Prime Pantry—this is pretty interesting, but not innovative in itself (more of a copycat). What is innovative is that they are essentially using their local stores as a warehouse, and choosing to ship items directly from the store vs. a main warehouse… This method should allow for faster and more cost-effective shipping to consumers, along with taking advantage of millions of dollars of inventory sitting on retail store shelves. As consumers are increasingly shifting to online and more convenient shopping, this shift from Target will allow them to continue to maintain and open new local retail settings while not worrying as much about the impact of in-store food traffic that is causing major retailers such as Sears and JC Penney to close doors at an alarming rate.

This also poses an opportunity for small businesses to think about the way they conduct business as well. Many small businesses struggle with keeping warehouses and retail stores open, as they both typically come with high overhead cost. A strategy similar to what Target has launched, shifting ecommerce delivery from your traditional warehouses to retail shops, may be a more cost-effective path for small businesses that are struggling to keep warehouses open and costs down.

Bertucci’s Files For Bankruptcy

The restaurant industry has faced another blow with Bertucci’s filing for bankruptcy, citing changing climate along with cheaper and faster alternatives as the main reasons for the failing business. But is that really the case? We recently published on strategic innovation and the changing retail environments as organizations focus more on cost reduction vs innovation; this, unfortunately, is another case to add to the long list of failures. Bertucci’s has self-identified faster and less expensive competition as the primary drivers of revenue loss; however, their only noted attempt at remedying the situation was to add a 15-minute lunch option. Is that really innovation, or is it just adding a band aid to cover up the root issue? Both retail and the restaurant industries have been crying foul and claiming new competition and millennial behaviors as the primary drivers of revenue loss. 3SixtySMB believes that it really comes down to true lack of strategic innovation, cost-cutting, and mismanagement at an executive level as the true drivers of revenue loss for both of these industries… With all of this said, it presents a clear advantage for smaller and more nimble startup organizations to break into markets where, for once, giants are failing to serve consumers. However, it has become apparent that it cannot be business as usual, and once a core value proposition is defined, strategic innovation needs a top strategy in order to continuously move the business forward.

https://www.pymnts.com/news/retail/2018/bertuccis-brick-and-mortar-bankruptcy/

The Importance Of Strategic Innovation

Why are icons of yesteryear failing at alarming rates? Some say that it is the introduction of Amazon and Netflix, or Millennial’s becoming more predominant consumers; others say it’s old leadership or old business models. Sure, you can easily point to those as a cause for the decline, but is that really the reason? We believe that there is a fundamental underlying reason these organizations are failing: Strategic Innovations. We wrote not too long ago about how the retail organization has become so calculator driven, and cutting as much cost as possible while completely losing sight of innovation. Looking across some of the most successful organizations today such as, Amazon, Google, Apple, Tesla and others, what they all have in common is that they are all constantly innovating and pushing the ball forward.

Tony Robbins says it best in this great Podcast on strategic innovation: https://open.spotify.com/episode/71sqZXDJQF2C8Wjz7Ec2rN?si=nOCB3pHOS_C9vuKoxzKTWw