Review sites and their risks: A start-up perspective

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Will the new site compete with Agnies List? If so, how will it handle the challenge of phony, self-serving, sabotage, or biased reviews?

The organizers of a new review/information site for renovators provided a brief presentation and sought input-gathering support at the Greater Ottawa Home Builders Association renovation council meeting yesterday. I won’t name or link to the site here yet because the project is very much still at beta stage — but the early-stage observations suggest the real challenges and problems of any consumer review sites.

Two reviews shot out for attention in the site’s early version. In one, a consumer dissed a well-recognized and successful local renovator, indicating that he didn’t think the company’s ?proposal was well-thought out while it was the most expensive of six he received (and he said that he believed this is because renovator spends money on marketing and legal costs). ?The renovator never had the opportunity to provide any services — yet (at least for now), has a ?one-star rating.

Meanwhile, I read another review that seemed to echo the sort of puffy self-promotional pieces businesses without much marketing sophistication would write about themselves. (I see lots of these things in my work — and then try to suggest better ways to communicate the marketing message.) The obvious indicator is that the company wrote its own review, or had a family member or friend do it for the business owners.

These sorts of abuses are common with review sites; which have an additional challenge of generating revenue. The conflicts are clearly apparent in controversies involving Angie’s List. In theory, crowd-sourcing review sites provide valuable consumer information and insights, draw traffic, and enhance the marketplace, but it is fascinating to see how early on in a new site we find potential problems in fairness and accuracy.

I’ll keep an open mind about the new site — the project appears to be well-capitalized — and will see how the developers overcome the forces that inherently distort and weaken review sites’ effectiveness.

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