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How Trustworthy are TrustPilot and TripAdvisor for Analyzing Customer Reviews and Ratings?

How Trustworthy are TrustPilot and TripAdvisor
Written by Andy

Trustpilot is a popular online platform that allows businesses to collect and showcase customer reviews and ratings. There are several other services that offer similar functionalities and can be used by businesses to manage and display their customer feedback.  But as an investor analysing a business/stock can it be relied on?

In practice I hate the likes of Trust Pilot and the culture of star-based reviews as I think it encourages the wrong behaviour. In my experience a customer that doesn’t get their way over something (irrespective of whether they are right) will leave a 1* scathing review as revenge / anger management. Anyone that is generally satisfied won’t bother and the 5* reviews are often left by brand disciples so are equally unrealistic.

At a personal level I never believe a word that comes out of Trustpilot and have now stopped even looking at the reviews. As I understand it the “review” model generally works like this…most people don’t leave reviews unprompted – so you will find even quite large brands with low Trustpilot ratings, but also very few reviews (absolute numbers relative to sales). Why? Because only people with something to vent will go online unprompted and put 1*. Sales then ring the company up and say they can get you more reviews and help ‘manage’ the rating up – for a nice fee of course. You refuse and the negative reviews remain. You pay up and suddenly your rating becomes much better because they then actively target your customers for reviews and help you remove the detractors. So basically I have come to the conclusion that low ratings mean the company in question hasn’t paid and high ratings mean they have. Does that give me unbiased and relevant information on a service/product or is it just paid for marketing!? That is, as a consumer can I really “trust” the ratings at all? From a personal perspective I have decided I can’t.

How Trustworthy are TrustPilot and TripAdvisor for Evaluating Customer Satisfaction with Companies?

What is little known is the mafia style tactics they employ to “persuade you to join”, extortion and blackmail is a great business model and this company is the worst I ever dealt with in 30 years

Goes on something like this

Non trustpilot company

– any customer can leave a review,  but in reality only pissed off customer leave a review in this case , so you have 99% happy customers 1% pissed off .

– so your company ends up with an average of 1 or 2 stars.

Trustpilot then can you up and say “we can help you improve your rating “ – just pay us some money…

Sign up to trust pilot. Then, every customer receives a nice message post sale “review us on trust pilot” and they click through and the 99% of happy customers do the job of leaving nice reviews.
Meanwhile you call them asking for negative reviews to be removed.

Same company by 5/5 rating.

As a founder of a company I told them to get stuffed for years and our trustpilot was only ever poor , when I sold new management succumbed to the extortion and  paid the fee and px are now trust pilot 5/5. Superstars.  It’s extortion

And as for companies that insist on employees getting 5* reviews or risk being fired…well don’t get me started on that…appalling corporate culture behaviour based on, and designed to mislead!!!!

The holiday ones like TripAdvisor are just as bad.  Yelp is also bad.

From an investor’s perspective it not really that useful looking at them.

From a consumer perspective I will ignore 1 & 5* and only look at 2-4* as the rest is a waste of time.

From a business owners’ perspective looks and feels a lot like legalised extortion.

From an employees’ perspective – horrible.

Value to society? Frankly in my opinion it has negative value and should be taxed out of business.

I see Sosandar (LON:SOS) has received 9 bad reviews in April. Unwelcome, but for a business doing £40m revenues, so say 400k customers p.a., 9 bad reviews in a month isn’t a trend. It’s similar to what you see for any retailer – people are only motivated to go on TrustPilot to complain, and not many happy customers leave a review. So Sosandar’s overall ratings look similar to what I would expect – nearly all 5-star or 1-star, as it’s only the extremes who do reviews. The ultimate reviews are the revenue & profit numbers!

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Andy

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