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The importance of (active) online reputation management

Companies that mainly operate in the B2C sector are increasingly dependent on their customers forming and communicating their opinions on the Internet. Who doesn’t check HolidayCheck or TripAdvisor before booking a hotel or read Google reviews of a garage before taking their car in for repair? How important is online reputation management, in other words, the management of reviews and opinions, for companies? How can large companies keep the upper hand and stay in control of their online reputation as well as actively manage it? And which tools and systems are used?

What is online reputation management?

Online reputation management (ORM) describes the method-based and structured procedure for improving the perception of a company on the Internet. It is a marketing discipline and is also closely related to customer relationship management (CRM). ORM includes a number of methods and procedures, such as automatically scanning forums and blogs or moderating and responding to comments in social networks.

In my blog post, I mainly refer to the management of review portals such as TripAdvisor, HolidayCheck and of course reviews on Google. These reviews have a direct impact on the ranking of the service on these sites. I’ll explain which key performance indicators (KPIs) play a role in this later on.

Reviews and opinions from users and customers benefit businesses in two main ways: marketing and feedback. Good ratings and reviews can convince potential customers to use the product, especially if it’s a service. Reviews from customers play a very special role in the case of services because the service is consumed at the exact moment it is delivered. Products can usually be returned if you aren’t happy with them. You can’t do this with services, so many rely on the reviews and experiences of previous customers. If a service receives a negative review, companies can also use this feedback – provided the review gives a reason.

Relevant key performance indicators

Companies should manage their ORM actively and purposefully. It’s important to pay attention to the relevant KPIs and to influence them directly or indirectly.

KPIs that can be directly influenced:

  • Response rate: Number of reviews answered / total number of reviews
  • Response time: Average time taken to respond to a review

Employees should respond to negative reviews in particular in a quick, friendly and solution-oriented manner. Most review portals allow businesses to respond directly so that other users can see them. In addition, companies should offer a critical customer a solution to the problem or a private meeting.

KPIs that can be indirectly influenced:

  • Number of reviews
  • Review rate: Mostly a star rating or score
  • Net promoter score (NPS): KPI for measuring customer satisfaction
  • Sentiment score: Percentage KPI, how positively a certain aspect is written about in a review

To increase their number of reviews, many companies rely on e-mail campaigns sent after the service has been provided that include a request to leave a review. Hotels in particular rely on these post-stay e-mails. The results of the surveys can often be integrated directly into the e-mail and are published on the linked review portal after they have been answered. This enables companies to encourage their clientele to review their services, as negative experiences are published more often than positive or average experiences.

The net promoter score (NPS) is a KPI that determines customer satisfaction via a question. The question is usually about how likely the customer is to recommend the product or service, but other questions that gauge satisfaction can be asked as well. The calculation is based on a scale from 0 to 10 on which customers are asked to rate how likely they are to recommend the product or service. Based on this, customers are divided into three categories:

Detractors (0–6): They will not recommend the company to others and will probably recommend friends and acquaintances not to use it. This group writes negatively about the company and its services.

Indifferent (7–8): This group is not particularly dissatisfied, but would not recommend the company to others. They are to be regarded as neutral and can therefore be ignored in the NPS calculation.

9–10: Promoters: Promoters view the company in a very positive light and will most likely recommend it to their friends and family.

The NPS results from the calculation NPS = promoters (%) – detractors (%) and can be between -100 and +100.

First of all, the NPS says nothing more than that the company has a more loyal or more dissatisfied customer base – depending on the question. Important information can only be gained by comparing the results with other companies over a longer period of time. For example, Amazon or Harley Davidson have the highest NPS scores in the world, with scores between 70 and 80. However, blindly chasing the highest value isn’t beneficial. It is much more important to increase the NPS value steadily.

A sentiment analysis is an AI-based method that can be used to automatically identify the emotional tone in texts – for instance, in customer reviews – and to gain quick insights from large amounts of customer data in real time. Sentiment analysis automatically detects emotions and opinions by classifying a given text as positive, negative or neutral. But how does it work? Basically, it combines two subfields of AI: natural language processing (NLP) and machine learning. A score can then be determined based on the classification of the sentiment towards a particular product or industry-specific keyword. Sentiment analysis is an integral part of many ORM systems. But what else can the systems do?

Tools and systems

If you take a look at the ORM systems on the market now, you can see that there are stand-alone (in other words, independent) systems and modules of CRM systems. Stand-alone tools often offer an interface to popular CRM systems. Integration into the review platforms is particularly important. That’s because all of the reviews – whether they’re on Google or an industry-specific review platform – are pooled together in the ORM system to make reporting easier for the company, but more importantly, to make it easier for the company to respond to reviews. The integration into the CRM system becomes interesting when a customer’s reviews can be stored in the customer profile in the CRM. In this way, these reviews can be factored into the next interaction with the customer and, in the best case scenario, the company increases its chance of retaining the customer. The major general CRM systems have long since integrated ORM. Salesforce offers several modules through the AppExchange. But Microsoft also offers some integration options through its AppSource. In November, SAP acquired the American company Qualtrics, expanding its portfolio in experience management, which also includes ORM.

ORM helps consumers to make purchasing decisions and is also a benchmark for companies. All touchpoints along the customer journey can be addressed with well-designed ORM. The company’s authentic appearance attracts new customers and the increased sense of loyalty to the company retains existing customers. There is more of a chance of developing existing customers into regular customers or even promoters.

Would you like to learn more about exciting topics from the world of adesso? Then check out our latest blog posts.

Picture Marty   Kostmann

Author Marty Kostmann

Marty Kostmann has been working for adesso as an Associate Consultant since October 2020. Her work focuses on CRM and project management. Previously, she worked as a consultant in the hotel industry.

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