truRating is a remarkable piece of payment terminal software. It allows customers to review their service experience at the touch of a button, while they’re making their payment.
It’s changed the online review sphere in the UK for the better. And now it’s coming to Australia. The local team aims to have it up and running for Aussie businesses by early next year.
Their tagline is ‘the Ratings Revolution’. And it’s easy to get caught up in the hype. There are features and benefits for both users and businesses. Users can review a business just by pressing a button the EFTPOS keypad. They can win prizes by random chance; a code appears at the bottom of their receipt, which is then entered online to redeem. Users can also look up ratings on each business’s profile page.
Businesses benefit from rich stats on customer opinions, average spend, spending habits, and most importantly opportunities for improvement. Importantly, it’s a better representation of real opinions than online reviews. Because the system captures a greater sample of customers — even if it’s just the one question — the business manager gets a more complete picture. truRating has run a cursory survey in Australia, and 95% of respondents said they would enter a review response on a payment terminal. That’s obviously a lot higher than the number of people who’d take the time to do a detailed survey or post a thorough review online.
But where truRating is really remarkable is its potential to help combat the problem of fake reviews.
The problem with fake reviews
Fake online reviews are a real problem. Not just in Australia, but around the world. If you’ve ever researched a business online, chances are you’ve seen a suspiciously fake review. Signs of a dodgy post include a reviewer who’s only done one review on the platform (Yelp, WOMO, Urbanspoon, and so on).
The same goes for reviews that are dramatically unbalanced; ranting or raving. Shockingly (or perhaps not), some businesses attack their competitors by leaving false negative reviews on their online profiles.
Consumer authorities in Australia are starting to crack down. Since 2013, the ACCC has published guidance for businesses on how to manage reviews. They’ve also published information online to help educate the general public about the rules on fake reviews.
False reviews are illegal under the Competition and Consumer Act 2010. Leaving a false review is a form of misleading consumers. Even if the review would seem glaringly, obviously fake to you or I. In their resources for businesses, the ACCC warns managers that:
‘Businesses and review platforms that do not remove reviews that they know to be fake risk breaching the Competition and Consumer Act 2010.
Reviews may mislead consumers if they are presented as impartial, but were written by:
- the reviewed business
- a competitor
- someone paid to write the review who has not used the product
- someone who has used the product but written an inflated review to receive a financial or non-financial benefit.’
This makes it pretty clear that it’s not OK to manipulate review systems in any way. Including offering freebies in return for reviews. Yet plenty of businesses are still doing it.
Last week, removalist company CityMove paid $30,600 for three infringement notices issued by the ACCC. It was the second time they’ve been fined in the last five years. This time, they were busted when they used the same testimonial on different sites, simply changing the customer name on each one. The ACCC has also taken carpet cleaning franchise Electrodry to the Federal Court over allegations that it and its franchisees posted fake testimonials.
For small and medium sized businesses (SMEs), it can be particularly hard to keep track of all the fake reviews and attack reviews online. There are just so many different platforms on which a client or customer can post their thoughts. Usually, the only ‘validation’ that’s required is a screen name and email address.
The idea with truRating is that, because only actual customers can put in reviews at the point of sale, truRating profiles will become a trusted source of information. If a business’s truRating profile doesn’t match up with the sentiment of longer reviews posted elsewhere, users will know which source of information to trust.
How does truRating work?
When the customer or client is putting their payment through, they are asked a simple question. They’re asked to rate an aspect of their experience — service, range, price etc. — on a scale of 0 to 9. It’s all anonymous; the business owner doesn’t get to find out who submitted what rating. What they do find out, within 24 hours, is all the responses to all the questions being asked. Through a simple interface, they can work out things like whether ratings drop on particular days or at particular times. Or whether there are consistently poor (or good) ratings for a particular question.
Users can also view the information, in a different form, on the company’s mobile website profile.
How truRating has changed UK businesses
truRating hasn’t been available in the UK for long. But to date, it’s had a remarkable impact, on small and large businesses alike. CEO and co-founder of truRating Georgia Nelson explained how it’s changed many businesses already.
‘The response has been absolutely fantastic. In the UK we are seeing an average consumer participation rate of 88 percent – that’s nearly 9 out of 10 customers at live venues leaving a rating. That’s not big data, that’s what I’d call huge data, [as] usual feedback methodologies that typically deliver less than one in a 1000 customer response rates …
‘We have over 130 outlets collecting ratings after just a few months in BAU activity, and we’ve captured over 400,000 ratings … [We’ve found that] A customer who rates 1 ‘point’ higher using truRating will spend an extra £0.80 [$1.69] on average – i.e. rating 1 instead of 0, or 2 instead of 1 etc. So for each extra point the business makes an additional £0.80 [$1.69].
‘If businesses can push sentiment up by a very small percentage, the financial benefits are compelling and ROIs are easily delivered on customer satisfaction initiatives.’
It sounds great, but the company hasn’t released any case studies yet. And they’re not naming names when it comes to their big brand clients. Personally, I think it would be a bit more compelling if they could name a business and state clearly how truRating data has boosted their bottom line.
What could it do for local retailers and food outlets?
An extra $1.69 per point per transaction might not sound like a lot. But even a small bump in spending could deliver a significant boost to a company’s bottom line.
For example, Myer [ASX:MYR] does about five million transactions over the month in which they have their end of year sales. Including the notorious Boxing Day sales. If they could use review data from throughout the year to implement initiatives even just in that month, they could make an extra $8.45 million.
And that’s just with a one point bump. If they could boost ratings by three points, they could make an extra $25.35 million. That’s just for one month of sales. Not bad, considering their last full year report said they did $3.14 billion of sales for the whole year.
Of course, there’s an implementation cost. In Australia, truRating will charge monthly rates. Rates will start at $25 per month per outlet, for payment terminals doing fewer than 50 transactions per day. That’s as little as under two cents per review. Customers would literally be giving their two cents. Presumably, rates would scale up to be even more affordable for major retailers and fast food chains.
How investors can cash in too
It will be a while until investors will be able to see the impact of truRating on major retailers. In the meantime, it may be a good idea to keep an eye out for retail stocks with plenty of room for improvement — on both customer service in stores, and stock price. They’re the most likely to benefit from this new tech.
In ‘The Three Best Investments in Australia for 2015 and Beyond’ — available here for free — Money Morning editor Kris Sayce introduces five retail stocks that he believes are worth looking at. He also explains why he believes conditions are ripe in Australia for a ‘retail revival’ — and how you could profit. It’s a must read if you want to be prepared to make money from rising consumer spending levels.
Contributor, Money Morning