Embracing Negative Reviews - Peter Mühlmann, 2 of 3

Peter Mühlmann: It’s ok to get negative reviews. A Actually negative reviews can be more valuable for you than positive reviews.

Stephen Cummins: Sure.

Peter Muhlmann: So for two reasons, first of all, we… we did an AB split test where we’re… we’re showing consumers a page with one negative review.

Stephen Cummins: Yeah.

Peter Muhlmann: And the other page has zero reviews. And then we do a split test that says “so which one are people more likely to buy from?”

Stephen Cummins: Okay.

Peter Muhlmann: And people are far, far more likely to buy from the one with one negative review.

Stephen Cummins: Okay. That’s interesting,

Peter Muhlmann: Right? And because it is better to know… Everybody knows that people aren’t perfect. Everybody knows that sometimes people make mistakes.

Stephen Cummins: Yeah.

Peter Muhlmann: The… the notion that… that, oh, you have to be perfect is actually not believed by your customers.

Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups! This is episode 121 of 14 Minutes of SaaS, the second of 3 episodes where I chat with Peter Muhlmann, CEO & Founder of Trustpilot.

And then we have such a multitude of emerging markets. So people say, “Hey, I have a doctor on the iPhone, people want to know, Does it actually work?”

Stephen Cummins: Yes.

Peter Muhlmann: People saying, “I have this self storage company for you, people will want to know, does it actually work?” And all though we… we try in our go to market approach to be rather disciplined about which industries or sub-sectors we’re… we’re… we’re approaching…

Stephen Cummins: Yeah.

Peter Muhlmann: Because… because  the dynamic. So that… that if you have most… content that most companies within that industry becomes more relevant for the consumers and for the businesses. So there’s a self reinforcing effect there.

Stephen Cummins: Absolutely.

Peter Muhlmann: But sometimes we just see whole industries  just self select to go on. So for example… just some… some oddity, the mobile phone recycling industry at… at some point, all the companies at once decided

Stephen Cummins: They hit some tipping point.

Peter Muhlmann: Yeah, exactly. That they needed to use us; that was the leading company in… in the category that started to use us and then five or six others wanted to… just went on board.

Stephen Cummins: So, is that a strategy? Where you can get one major company in one industry to get in and then this kind of fomo for the rest of them.

Peter Muhlmann: That can certainly help.

Stephen Cummins: Okay.

Peter Muhlmann: That can certainly help.

Stephen Cummins: And how do you… you know, because obviously brand equity is built around trust,

Peter Muhlmann: Yes.

Stephen Cummins: Not just the name but the nature of reviews. What are the things you do to try to protect that? Because nothing is 100% watertight but what are the things you do to try and protect that at the moment in terms of…

Peter Muhlmann: Yeah, so we… we invest enormously into ensuring the integrity of the content on the site.

Stephen Cummins: Yeah.

Peter Muhlmann: So, there are many dimensions and so the first of all is just ensuring that people are as unsuccessful as entirely possible in manipulating the system. Because since consumers care so much about this, of course, sometimes people will also try to have more sinister motives and try to write fake reviews of them. So the way you should think about this is very much like a bank is preventing credit card fraud. So, you may go to a supermarket and use your credit card there and then your bank says, like, “we blocked it because five minutes later it was used in China, there’s no way you can have traveled to China in five minutes.”

Stephen Cummins: Yeah. Yeah.

Peter Muhlmann: So, so that’s weird. So what… what they, the banks are doing is they’re looking at data of what typical behavior looks like and then they have statistical patterns that are catching anomalies.

Stephen Cummins: Yes.

Peter Muhlmann: And so we do the same. So, let’s say that there is a company in London and usually they have a UK based audience or a company in Paris that usually has French customers. Then suddenly, they’re getting a ton of reviews written on the other side of the world. That’s weird.

Stephen Cummins: Yes.

Peter Muhlmann: And now that’s just one data point. And then we have hundreds of these data points that we look at and so what that means is that it can be virtually impossible for us to detect if your friend goes in and writes a glowing review off your podcast but if you want to have hundreds of good reviews, so that it actually matters, it’s very hard not to trigger the data points.

Stephen Cummins: Absolutely.

Peter Muhlmann: The other one we’re… we’re… we’re trying to do is we’re actually telling the businesses it’s very much a mind… that it’s okay to get negative reviews. Actually negative reviews can be more valuable for you than positive reviews.

Stephen Cummins: Sure.

Peter Muhlmann: So for two reasons, first of all, we… we did an AB split test where we’re… we’re showing consumers a page with one negative review.

Stephen Cummins: Yeah.

Peter Muhlmann: And the other page has zero reviews. And then we do a split test that says “so which one are people more likely to buy from?”

Stephen Cummins: Okay.

Peter Muhlmann: And people are far, far more likely to buy from the one with one negative review.

Stephen Cummins: Okay. That’s interesting,

Peter Muhlmann: Right? And because it is better to know… Everybody knows that people aren’t perfect. Everybody knows that sometimes people make mistakes.

Stephen Cummins: Yeah.

Peter Muhlmann: The… the notion that… that, oh, you have to be perfect is actually not believed by your customers.

Stephen Cummins: Yes.

Peter Muhlmann: They… they know you’re just a human and sometimes you’re a little…you may…but not knowing everything. That’s really what… what scares people. So, it’s a little bit, like, think of yourself as if you’re buying a digital camera and it’s a really cheap one.

Stephen Cummins: Yeah.

Peter Muhlmann: You probably know, maybe the battery life isn’t so good. Maybe the camera isn’t so good either, but you’re okay with that because it’s really… really cheap. And you just like to know where it’s not as good and then be okay with that decision. And… and the other reason that negative reviews are really valuable is that … it can signify a mindset in how you respond..

Stephen Cummins: Yes

Peter Muhlmann: And… and so we find that responses to negative reviews can be more powerful than 10 positive reviews.

Stephen Cummins:Yes.

Peter Muhlmann:  Again, because people always know that things go wrong. So it’s not about they want things to never go wrong, but it’s how does the company react.

Stephen Cummins: Okay. Will, the company go to war with… with you as a customer and say, “Yeah, but you forgot to read page 17 of the terms and conditions where it clearly says that you have no right to complain about this.”

Stephen Cummins: Okay. Okay.

Peter Muhlmann: Or are they the kind of company that says, “Really sorry that you had a bad experience; let’s fix it and here’s a bottle of wine and some flowers” that… that… that is much more powerful than ten good experiences.

Stephen Cummins: Absolutely. And, you know, I did notice something pretty powerful and positive that you did. Which was an obvious thing a company is going to do, of course, is come in and start flagging every negative review and I saw you built something into the platform this year. I think, to actually combat that which is obviously very strong… a strong thing to… to do as well.

Peter Muhlmann:  Yeah, because again, I think… I think what… what consumers… it’s really important that they realize is that how a company is using the online media will really say a lot about how, what… what its’ mindset is.

Stephen Cummins: Okay.

Peter Muhlmann: And so in this case, for us, the… the thing is that so everybody can go in and write a review on Trustpilot. And of course, it has to be like that because it should be up to you if you want to write a review of the business, not if the business wants you to write a review of a business.

Stephen Cummins: Yeah.