Note: This was originally posted on ClickZ.

Customer-generated product reviews are a critical component of a successful social commerce program – 74 percent of consumers are influenced by the opinions of others in their decision to buy products online, according to recent research from Manage Smarter. Yet many retailers are still wary of “negative” reviews, fearing “bad” feedback on their products and services will hurt sales.

Fearing negative reviews is a mistake, however. There are many case studies that show negative reviews, at least when mixed with positive ones, are a clear driver of sales. If all of your product reviews are glowing, people will be suspicious of their authenticity. What’s more, any customer-generated information about a product, whether it’s entirely positive or slightly negative, helps increase sales; even products with three-star ratings convert better than products with no reviews. If your site provides a mix of positive and negative reviews, that shows two things: that you are willing to give your customers the space to share their authentic opinions, and that you value their feedback. The mere presence of negative feedback on your site builds transparency in your brand.

What’s more, with a mix of both positive and negative reviews, customers are better informed about the features of your products or services – and informed customers make more purchases.

Embracing negative reviews means creating a proactive program to listen and respond to dissatisfied customers. Each negative review is a chance to make an unhappy customer happy, and to identify why certain products are falling short of expectations. Retailers such as Land of Nod, QVC, Rubbermaid, and Oriental Trading Company have embraced negative reviews as a way to analyze their customers’ authentic feedback to improve customer service, fine-tune merchandising, and even improve product manufacturing. These retailers, and many others, realize that negative customer feedback is as important – if not much more important – than positive feedback, because it allows them to better understand their customers and deliver the products and services they want. (Disclosure: The companies listed above are customers of Bazaarvoice.)

QVC, for example, uses negative reviews to take action on customer service and delivery issues, often by reaching out directly to dissatisfied customers. For example, when the company recently discovered that a product had issues with quality and delivery, they contacted 900 customers with an offer to replace the product. They also worked with the vendor to return the remaining product inventory and improve future versions. Internally, QVC executives hold monthly meetings to discuss all aspects of customer feedback to determine areas the company should emphasize and improve.

Even if you allow negative reviews to surface on your site (and you should), you still have to carefully moderate all posts to eliminate inflammatory or rude remarks, as well as other reviews that violate rules of moderation, such as those mentioning price, service, or litigation issues. For these rejected reviews, it’s still important to reach out to the people who wrote them, however, because when a customer uses profanity or goes off on a tangent, they are angry. You should communicate with angry customers to uncover and solve their legitimate problems so they will be less likely to spread their rancor to blogs, forums, and other places where you are unable to see, control, or address their comments. (See the #amazonFAIL Twitter-storm fiasco as an extreme illustration of what can happen when your customers feel your brand isn’t listening to their legitimate complaints.)

Here are a few concrete tips for getting the most out of negative reviews:

  • Trust your customers, and they will trust you: Let your customers share their real opinions – taking the good with the bad.
  • Moderate out “flames” and illegal postings: Just because you’re embracing negative reviews doesn’t mean you should leave up inflammatory or legally-questionable reviews. Your rules of moderation still apply.
  • Respond quickly to complaints: The faster you respond to dissatisfied customers, the better. Address concerns in both published and rejected reviews right away, and fix what’s broken in terms of products, service, or process.
  • See negative feedback in a positive light: Negative customer reviews are a goldmine of critical information about your products and services, as well as a window into how customers view your brand. Learn from negative reviews to improve every aspect of your business.

Pretending that everything about your products or services is perfect can be disastrous to your bottom-line sales. Embrace negative feedback as a gift to improve your products, build trust in your brand, and create a lasting relationship with your customers. You can turn every negative into a positive for your company.

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