Today's case study shows how you can take negative reviews online and turn them into a massive boost to your business with a little strategic thinking.
If you don't see the value in improving your decision-making skill, I recommend unsubscribing. After three weeks, the value should already be clear; if not, you likely aren't a fit for this newsletter and our high-performing community.
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The Case
I was recently working with Sophia, a boutique owner.
She noticed several negative online reviews targeting her store, claiming poor customer service and low-quality products.
She suspected a disgruntled former employee might be behind the false reviews, attempting to tarnish her store's reputation.
What would you do? (Spoiler: our solution led to a 400% increase in sales)
Entrepreneur's Solution:
Sophia considered the following options:
- Ignore the negative reviews, hoping they would not impact her business.
- Respond to the negative reviews publicly, risking a heated online exchange.
- Launch a promotional campaign to counter the negative publicity.
Lawyer's Advice:
If Sophia consulted a lawyer, they would likely recommend the following:
- Investigate the source of the reviews to determine if defamation has occurred, costing $2,000-$5,000.
- Send cease and desist letters to the suspected individual, costing $500-$1,000 per letter.
- Consider legal action against the former employee if sufficient evidence is found, which could cost $10,000-$20,000.
LegalPreneur's Outcome:
Here is how we tackled the issue:
Step 1 - Consider The People Involved
A lawyer looks at the legal side, but this is a PR issue. We aren't dealing with someone who is being rational. We were dealing with someone motivated by revenge, which is irrational, and sending a cease and desist letter, for example, would make it worse.
Step 2 - Determine The Best Outcome for the Business
The lawyer wants to beat the other side. The business just wants to avoid damage to its reputation, sales, etc.; those are two very different objectives. So what is best for the business? We determined it was protecting the business reputation, customer loyalty and public relations.
Step 3 - What Resources Can We Deploy to Solve the Issue
Now understand the scope of the problem; what is in our toolbox that can be used to solve it?
- Loyal Customers - Sophia had customers who loved her business
- Strong Social Media - Sophia had been active and shared her journey on social media, so she had credibility and an audience
- Marketing Budget - Sophia already had money set aside for improving the company's marketing and growth.
Step 4 - The Solution
We implemented a 4 part solution:
- Sophia personally responded to each negative review offering refunds, credits, discounts, etc. This would immediately counteract the harm by showing a business that cares about its customers and rights its wrongs. Knowing the reviews were fake, this was a quick way to call the bluff.
- Emailing loyal customers to share their positive experiences only to improve ratings on Google and other review platforms.
- Implement a customer feedback system to mitigate future negative reviews by giving customers a way to have their problems solved immediately and to encourage future happy customers to leave positive reviews.
- Use the marketing budget to promote positive reviews from loyal customers in the local community so that there is positive word of mouth to counter any negative online reviews. People trust those they know in their community more than anonymous online posts.
Result- In the two weeks after she started to implement this solution, she had a 400% increase in sales!
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Vesting
Vesting is a process where someone earns something over time, rather than all at once. For example, imagine you get paid a little bit of money every week for working at a job instead of getting a big lump sum at the end of the year. In the case of startup companies, founders and employees earn their ownership or equity slowly over a period of several years, to make sure they stay committed to the company and work hard to make it successful.
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To understand concepts, you can't just read a newsletter; you need to engage with them. Here are some of my social media posts where you can learn about law and business and share your opinions in the comments.
1. Twitter Thread - My takeaways from the top 23 books on decision-making!
2. Single Tweet - As AI takes more jobs, what will survive?
3. Youtube Video - Top 10 Legal Mistakes Entrepreneurs Make!
4. Youtube Short - Biggest Mistake Founders Make!
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LegalPreneurship will help you make better business decisions and understand legal issues. Unfortunately, it doesn't replace the time-consuming and expensive legal grunt work like contract drafting. To help you with that, I am developing software that will help you avoid unnecessary legal fees.
Click Here to access a Google Drive file with 30+ legal templates I have written personally. No catch; they are 100% free to take, copy and adapt.
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This newsletter is not legal, financial, or tax advice. Please consult an attorney before making any legal decisions, a financial advisor before making investment decisions and a tax specialist for any tax matters. I make no representations and take no responsibility for the actions you take based on this information.
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© 2023 Gill Commerce Ltd.
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