The Power of On-Line User Reviews

Recently social media strategist Brent Robinson wrote a blog on the benefits to your brand of addressing on-line customer reviews. His blog states not surprising statistics that 84% of consumers research product on-line prior to making a purchase and 70% of consumers read on-line reviews before they buy a product as well.  Clearly consumers have become more savvy and have more information available to them to make informed buying decisions.  I give a lot of credence to peer reviews, especially when you know the person who has used said product.  There is a personal quotient here and greater trust.  By reading a review presumably written by a fellow consumer, you already have the common bond of like interest in a specific thing.

Metacritic review screen shot

When I am looking into buying music, I use  Metacritic aggregates reviews written by respected publications for movies, shows, video games and new album releases and quantifies (in as much as you can quantify the quality and appreciation for something as subjective as art), provides an average rating and then allows for site viewers to submit their own scoring.  I can read any specific reviews if I like, or if scoring is so disparate that I need to examine publications whom I respect more than others, I can do further research.  I always like to see how average listeners like myself rate an album versus Pitchfork or Rolling Stone.  So I think putting user reviews out on your site can be a powerful testimonial to the quality of your brand and can build trust with your target consumer.

The peril with allowing users forums on your site is that negative reviews can turn away new customers and tarnish your brand.  However, the way in which you respond to legitimate criticism can be a major positive.  Tara De Marco makes salient points in her blog from earlier this year offering lessons on how to respond meaningfully to poor reviews.  Responding to negative reviews can also address potential product misuse as the culprit of a negative user experience and help direct future customers.  This should be a no brainer.  I am a stickler for customer service.  I don’t remember bad experiences in retail or at a restaurant as much as the way in which the issue was handled.  I can usually tell if the response is a product of hiring or institutional policy.  Either way, I will always patronize businesses that own their mistakes and rectify them.  I wrote a scathing on-line review for a local restaurant after my family had to walk out after not getting served for over an hour and barely acknowledged by staff during the nightmarish wait.  (I realize this is a first world concern).  When we left, we had to wait longer for our waiter to ring up the one beer and three Cokes that we had long since finished.  Had he put the drinks on the house and asked us to try them again, I would not have taken the time to submit the damning review.  I have a feeling the owners would have cringed but I legitimately wanted to save someone else the misery and let the restaurant know they had an issue.

Dr. M. Joy Hayes of Daily Finance writes about the issue of fake user reviews in her piece found on  However, these reviews tend to be endorsements.  Businesses obviously should not pad their numbers and encourage or employ false reviews, but the negative ones need to be addressed post haste.  Consumers give credit for businesses that want to clarify, educate, rectify and listen.  I had a manager who offered ideas frequently.  After being met by the sound of crickets to his ideas, he finally said, “I’ll assume that your silence means enthusiastic support.”  Usually that is the opposite of what the silence met but it makes a point… Silence to a negative review makes it look like the company agrees with the reviewer and has little to add or, doesn’t care.

Do your due diligence

We have recently learned a great deal about the world of franchising.  Our mobile site review application Action Card will launch early next year and is in a productive beta test currently.  I have several years of experience recruiting, setting up and managing franchises and it has been fun working with our beta testers and networking with others who work in the franchise industry.  In business, communication is fundamental to running a successful operation and it was nice to see the International Franchise Association launch a historic initiative to facilitate relationships between franchisees and corporate franchises.

The IFA Board of Directors recently adopted recommendations by the IFA Franchise Relations Best Practices Task Force to increase meaningful communication and franchise relations.  I am encouraged by this effort and hope that over time it results in fewer frustrated business owners and greater cohesion in the IFA so that they can effectively lobby and advocate on behalf of franchises.  In my experience it was always surprising to see how many owners were not clear on the franchise agreements they signed.  Unnecessarily adversarial relationships between us and our franchise owners was not uncommon in the infancy of our model.  As we talk to many in the franchise industry today, much of that still exists.  I think a big part of the reason for this disconnect between two parties who should have more in common has to do with a lack of due diligence on both sides.  I recently asked several franchises how they recruited and screened owners for locations that wanted to sell or open in new territories.  Many have good processes in place to ensure that, like hiring a new employee, they are well screened and consensus among the executive staff is obtained when making the decision to pass or approve an owner.

Mature franchises know how costly it can be when you get the wrong owner in a store or territory.  Not only do you lose market share, inevitably you spend a lot of time putting out fires and spending resources trying to prop up underperforming owners.  It benefits everyone when prospective franchise owners are crystal clear on what they are signing up for, how the model works and what the rules are.  Disclosure and transparency in the selling process are critical to the relationship and success of the franchise owner moving forward.

Franchising can be extremely rewarding.  I personally worked with many owners from the time they first looked into investing in a business through their first year or two as an owner.  I developed personal relationships with these people, their spouses and often their kids as well who inevitably contributed or worked in the business. It was rewarding to watch somebody transition from lifelong employee to owner.  When you find a person who wants to run their own business and you match them up with a business that plays well to their personal strengths, you have a recipe for success.  Franchises have an obligation and an economic interest in having the discipline to walk from prospective owners with red flags.  People shopping for a franchise need to do their due diligence.  Talking to other owners, and I don’t mean two or three, studying their local market, hiring an attorney to review the franchise agreement, understanding the economics of the model and having enough working capital are all critical prerequisite activities when researching franchise models.  Any prospect who can’t speak to these issues intelligently in front of a franchise committee should not be considered for ownership.

Straight Shot Demo Day popcorn

Volano has kept a busy schedule recently and slowing down is not an option.  We wanted to share some of the things that we do when we’re not writing gang-buster code for clients and designing dynamic mobile applications.

This week Volano Solutions attended the Nebraska Broadband Conference sponsored by the AIM Institute in Kearney Nebraska.  The two day conference offered ample networking and perspective on the vitality of broadband internet access, especially in rural parts of the state.  The conference kicked off with key note speaker Tim Kiene, founder of venture cap fund Nebraska Global and also featured author and speaker Jack Uldrich, a “futurist” who discussed the seismic changes coming in business due to the advent of nano-technology.  Kiene gave straightforward advice to aspiring software entrepreneurs on the rigors and rewards of starting a business.  Volano’s own Rod Smith and Kelly Grace spoke in break-out sessions where we discussed how software can bring efficiency, transparency, accuracy, and accountability to businesses.

On Wednesday October 23rd Volano is hosting an Open House from 5-7 PM at our headquarters.  For those of you who have not visited before, we’re located at 1905 Harney St. on the 8th floor of the Exchange Building.  Free tickets are available via Eventbrite.  The open house offer opportunities to make new contacts, learn something new about software and forget all of that information during cocktails.  All are welcome to attend.

Straight Shot Demo night

Volano wrapped up an exciting 90 days working with Dundee VC and their start-up accelerator program Straightshot as well October 3.rd The relationships built during this time were valuable and it was genuinely exciting to be involved with extremely bright people on both sides of the entrepreneurial spectrum.   The culmination of this rigorous support program took place at the Aksarben Cinema where each of the seven companies ran through tier respective pitches in an effort to create visibility and hopefully spark interest from potential investors.

After the Holidays Volano will be launching its next mobile application, Action Card at the International Franchise Convention in New Orleans. Since going into beta-test mode, we have signed up 15 franchisors and should have an additional 10 by the end of the month.   We also continue to sign new users onto Steelwool and have enjoyed the opportunity to demo Steelwool to a diverse set of industries here in the Midwest.  We’re excited to take our show on the road and head to The Big Easy to meet many of our Action Card beta testers and sign up new clients as we launch it for 2014.

Action Card Home Screen

Volano is preparing to launch a new mobile app for franchise companies in February at the International Franchise Association Convention in New Orleans. We’re busy signing up beta-testers now and are encouraged by the early success.  Our mobile franchise location review app Action Card went live in beta two weeks ago and one of the things we hope to accomplish by signing franchise owners up is how much value this review tool is providing them.  We’ve done some research on SaaS pricing and hope to find a profitable price point that our clients won’t flinch at paying.  This has proven to be one of the harder challenges of successfully bringing software product to market.

In any business, your pricing can define the perception of your product.  Underprice your product and you’ve diminished its perceived value as well as your return on investment.  Overprice it and you risk low sales conversion.  I came across this blog by the Harvard Business Review (we’re wicked smart and read such publications as the Harvard Business Review) on mobile app pricing and the trend in “in-app” purchases.  According to author Colin Raney, the crowded app space and race to zero pricing have forced to developers to create products that create real value and enjoyment and get the users to pay during the use of the application and at precisely the sweet spot point when they are most fully realizing the benefit of the app.  In fact, 75% of total revenue from the Apple and Android app market is coming from in-app purchases.

We are wearing our pricing approach on our sleeve.  With Action Card, an in-app strategy probably doesn’t make sense so we are relying on signing up as many beta-testers as we can this fall and more importantly, monitoring usage.  We’ll try to quantify time/cost savings that our clients are seeing by using an automated review tool as well as the feedback they’re getting from their field managers.  We know what our development time has been creating and improving the tool as well as the expense of launching and maintaining customer service and sales teams.  Listening to our customers and incorporating their suggested changes will allow us to land on what we hope will be the best, monthly subscription pricing, be it tiered based on functionality or client size.

“Ah but something is happening here and you don’t know what it is, do you, Mr. Jones?” – Bob Dylan, Ballad of a Thin Man

Twitter bullhorn

I was recently explaining Twitter to my baby-boomer father in-law.  I am a perennial late adopter of technology so it’s always a challenge to find people whom I can play myself off as a subject matter expert and expound on the virtues of technology.  Whereas his generation only ushered in a social and cultural revolution and did it to the greatest rock and roll soundtrack of all time, my generation tweets pithy thoughts about jalapeño cream cheese and Breaking Bad.  Interestingly, I had a hard time explaining the utility of Twitter to him with an economy of words and realized the great situational irony.  A platform that limits its users to 140 characters per message was hard to explain as a concept in as few words.  Given that that Twitter is about to go public, by some insider estimation within 4-5 weeks of this blog posting, I thought it was time to write about the much copied social media phenomenon of Twitter.

This week Jenna Wortham and Vindu Goel from the New York Times wrote about Twitter on the eve of there IPO and their place in the social media ecosystem.  It will be interesting to see how Twitter fares given the intense competition it faces from similar social platforms such as LinkedIn, Snapchat, WhatsApp, Tumblr, Instagram, Pinterest, Kakao and Reddit.  Twitter is posting 500 million messages a day but has not been able to make money.  One of the great challenges for innovative social technology is figuring out how to monetize their product.  Omaha’s own Matthew Hansen wrote about this recently.  His subject, Alex Epstein, had built an enviable Twitter following but to date has not gotten his hands around how to turn a profit from his ongoing efforts.  Twitter faces an exceptional challenge.  With this many users, Twitter theoretically should not have trouble finding advertisers.  However, unlike Facebook or LinkedIn, Twitter does not have critical user demographical information that might better inform marketers on how to sell to its public.

Twitter has other obstacles.  Although innovative in 2006, Twitter has fallen behind in video and picture content to companies like WhatsApp who have, according to the NY Times, surpassed Twitter in subscribers.  Twitter is working hard to close that video content gap with the recent purchase of Vine.  They are also focusing on international markets as another profitable revenue opportunity.  Twitter owns the texting space for now, so the finding additional markets and understanding other technologies in which integration makes the most sense will be key over the next several months.

This brings me back to the conversation I had with my father in law.  He was not impressed that one might have the ability to blast out a random thought to their followers.  But he did like that reputable publications, companies and people were also using this tool to inform their followers, and as a follower you could pick and choose whom you wanted  to hear from and conceded that there might be something there.  This is why I like Twitter.  I can honestly say that I am at least better informed of my options as to which articles, headlines, journals, jokes and updates I’d like to explore.  There is a weird comfort there.  My wife calls it “Missaphobia,” the fear that somewhere, someone is doing something interesting and I am in the dark.  Twitter can at least ensure that if something is happening here, you will know what it is, won’t you Mr. Jones.