The Online Review Culture – What It Means For Franchising

Online Review Culture

One of the most fantastic things about the internet is the opportunity for people to self-publish and share their experiences and opinions. For businesses this means online reviews about their products, Tweets about queues in their stores or even a blog dedicated to their bad service. This review culture and greater transparency has changed the decision making process for many consumers.

Here, I will explain what this fundamental shift means for franchise companies, particularly when they are looking to recruit new franchise owners.

A Mega Phone For Bad Experiences

Online reviews directly influence buying decisions
In the digital age, online reviews have magnified the consequences of a consumer having a good or bad experience. Rather than telling ten of their closest friends, a customer can reach tens of thousands people through their blog. In fact, some have even led to the resignation of CEOs.

Take the story of Canadian musician Dave Carroll. When travelling on United Airlines, his prized guitar was broken while in United Airlines’ custody. Upset with United Airlines’ indifference and lack of care, he recorded a spoof song called “United Breaks Guitars” and posted it on You Tube. It received 150,000 hits on the same day! Within 4 days of the video being posted online, United Airlines’ stock price fell 10%, costing shareholders about $180 million in value and leading to the eventual resignation of United Airlines CEO. The video has now racked up over 13 million hits!

The Importance Of Customer Reviews

One of the biggest changes in consumer behaviour during the last decade is linked to the growth of online reviews, whether left on dedicated review websites, auction sites like ebay or retailers like Amazon. In the digital age, online reviews have largely taken the place of word-of-mouth referrals. After all, it’s easy to search for and read reviews of a specific product, rather than ask around all your friends in the hope that some may happen to have purchased that product so can offer advice.

Online reviews directly influence buying decisions – reviews written by actual consumers are trusted much more than traditional advertising messages. According to a survey conducted by Dimensional Research, an overwhelming 90 percent of respondents who recalled reading online reviews claimed that positive online reviews influenced buying decisions, while 86 percent said buying decisions were influenced by negative online reviews.

What Does This Mean For Franchise Companies?

Prospective franchise owners are conducting record levels of research about a franchise opportunity
Like all businesses, franchisors are being affected as their end customers have changed their decision making process. However, this shift in psychology has massive implications for franchise owner recruitment. Prospective franchise owners are conducting record levels of research about a franchise opportunity before even contacting the franchisor. In such a competitive and crowded marketplace, this creates challenges for how franchisors built trust with prospective franchise owners and differentiate their franchise opportunity.

Franchisors must be prepared to share much more information through their website and online franchise recruitment directories. Including recent case studies, details of company awards and breaking down exactly what the franchise owner receives in return for the franchise fee can help to build trust.