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Will removing the gag endanger your company’s reputation?

Social & Digital

Will removing the gag endanger your company’s reputation?


Proposed legislation in the US to limit the ability of businesses to prevent consumers from providing negative reviews on social media would no doubt have knock-on effects elsewhere, including Australia. Jaci Burns discusses the effects removal of ‘gag clauses’ would have, and how businesses can deal with online reviews.

Gag clauses were originally incorporated into employment contracts to prevent employees from publicly disclosing information about their employer, workplace or work. In other words, to gag potential whistleblowers.

(Here in Australia, gag clauses appear to be mostly used to conceal gender pay inequity but that’s a whole other blog post!)

More recently, gag clauses have become popular inclusions in commercial terms and conditions, and contractual agreements, to block consumers from posting negative online reviews. In a ‘seller beware’ marketplace, businesses are using these clauses as a heavy-handed means of online reputation management.

There’s compelling evidence to show gag clauses disempower consumers. The threat of litigation works wonders.

Change may be imminent. In the United States, if passed by Congress, the proposed Consumer Review Freedom Act will limit the ability of businesses to retaliate against customers who express a negative opinion, or to obstruct consumers from sharing their viewpoint.

Yelp and TripAdvisor, among others, advocate the legislation will preserve freedom of speech. Positive, negative or neutral, consumers have the right to have their say without repercussion.

Or do they?

Word of mouth is the most powerful form of marketing and the proliferation of social media and user-generated websites (like Yelp and TripAdvisor) means both the risks and the rewards have increased exponentially.

The American legislation, and the knock on effect it would inevitably have elsewhere, would challenge many businesses.

Most companies will have mechanisms in place to control what is posted to their own accounts – their website and social media sites will be carefully monitored, censored and sanitised. In most cases, feedback will be moderated.

In contrast, many user-generated sites allow consumers to post reviews without proof of purchase or validation, and anonymously. That’s akin to laying out a welcome mat for internet trolls and cyber bullies.

A 2015 study by online reputation management firm Igniyte, found bad reviews cost one in five UK companies up to £30,000 (AU$57,000 or US$42,000) to correct. Moreover, half the respondents said they had experienced unfair reviews, or been the victims of malicious reviews or trolls.

Companies can’t cry foul every time a dissatisfied consumer airs their opinion. There’s a whole spectrum of online reviews (see below) which begs the question: is the consumer being inflammatory, justifiably critical or something in between?

One thing is for sure: giving a voice to consumers will sustain a whole new generation of reputation managers and defamation lawyers.

10 tips for handling online reviews

  1.       Make sure your overarching customer service strategy is best practice, as this will mitigate the risk of customers resorting to online forums to vent their frustration or dissatisfaction,
  2.       Whenever you can, resolve a complaint quickly and positively. Negative reviews can remain online indefinitely so the long-term damage can far outweigh the cost of any remedy,
  3.       Take it offline. As soon as you identify a negative complaint take the conversation offline. There’s no need to air your dirty laundry,
  4.       Take a breath. When responding to negative feedback, stay level-headed and don’t get emotional or defensive,
  5.       Close it out. When you do resolve an issue, make sure you close out the public thread as the customer probably won’t do this. That way, even if the negative review remains visible, it’s future impact will be diminished,
  6.       On the occasions when you are unable to resolve an issue, post an appropriate, fact-based statement as to why,
  7.       Consider all feedback and apply it as part of your continuous improvement procedures. Customers have great ideas – ideas which will grow your business,
  8.       Accentuate the positive. Make it easy for your satisfied and loyal customers to leave positive feedback,
  9.       Allocate budget to deal with online reputation management, and
  10.   Make sure the channels you control are moderated (approve all comments before they go live) and be rigorous about monitoring and responding to feedback left on other user-generated websites.
Jacqueline Burns

Jacqueline (Jaci) Burns is managing director of Market Expertise, a B2B agency which specialises in the marketing of services, solutions and intangible products. Based in Sydney, Market Expertise works with ‘smart companies’, both Australian and international, from the financial services, professional services, technology and knowledge sectors.

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