My latest guest post has just been published on GigaOM. The big idea is that online review sites are undermining brands by making it easier for consumers to know the quality of specific locations and individual service professionals.
Here’s an excerpt:
Take this Google search for Super 8 Motels, for example. On the front page, you’ll see ratings that hotel guests have written about particular Super 8s on TripAdvisor, Yahoo Travel and Yelp. Importantly, the reviews vary widely. When I checked, a New Mexico location was rated 4.5 stars, while a Los Angeles location was at 3.5 stars and one in British Columbia had only 2 stars. Such location-specific information undermines brands’ ability to affect consumers’ purchasing decisions with 30-second TV spots and gives TripAdvisor a powerful position.
TripAdvisor is ahead of other travel sites thanks in part to their use of Facebook-connected recommendations, which help websites make sales by establishing instant trust with visitors. As a potential hotel guest, I am interested in the consensus among previous guests, but I am especially interested in what my friends have said. Reviews can be intensely personal — for example, here’s my TripAdvisor review of a beach resort in Mexico — and if you know the author, it makes a huge difference in how reliable you consider the review.
For the Super 8 brand, the end game could be scary: as TripAdvisor accumulates more and more trusted reviews, the best-performing Super 8s, all of which are independent franchises, may eventually realize that their business is suffering from their association with lesser motels. At that point, we might see a “brand run,” wherein the best locations leave the chain, lowering the brand’s value and ultimately leading to its collapse.
See the post itself for a few recommendations for brand managers.
I didn’t have space to discuss which sorts of brands are more or less threatened by reviews sites, but it’s worth pointing out that consumer product brands like Coca-Cola, Gillette, and Doritos are safe. Online review sites don’t make sense for such items, as everybody already knows the taste of Coca-Cola.
Franchise brands like hotel chains and national insurance agent networks (think Farmers, State Farm, Allstate) – will face the biggest challenges as consumers gain access to location- and employee-level reviews.