Rating customers: feedback or blowback?

Earlier this year the New York Times ran a story headlined "Ratings Now Cut Both Ways, So Don't Sass Your Uber Driver" which suggests that the tables are being turned in terms of reviews being the prerogative of the customer. The Times article says that "companies are rating their customers, shunning those who do not make the grade." The ability to create a mutually reinforcing feedback mechanism has been the hallmark of unregulated economy companies like Uber and Airbnb.  But as the Times piece points out, the pioneer in this field was eBay which introduced it over a decade ago only to cut it out a few years later in 2008.  eBay now allows sellers to make only positive comments about buyers. It is unclear what if any benefits there are from its now censored efforts.

If the thinking behind rating the customer is that it may enforce better conduct on the part of those customers who are normally inclined to treat assets outside their home with less than due respect, a spate of stories on things going awry in the misleadingly labeled sharing economy tends to give that notion the lie. The stories also include an orgy in an apartment that resulted in an Airbnb "victim" being rendered persona non grata to landlords and some Uber drivers who ran amok

Perhaps one reason for consumers' aberrant behavior is a subconscious devaluation of the asset by the consumer due to it being more freely accessible. That likely makes them, sometimes consciously, to inflict more than wear and tear on the "shared" item. Regardless, that approach to a customer has not thus far been tried out on a systemic basis in the regulated world of hotels and airlines. One UK based hotel made a ham-handed effort at getting back at customers who posted bad reviews on Tripadvisor by levying a "fine" of £100  only to find themselves rapidly making a refund after they found themselves in the news for all the wrong reasons.

A more sophisticated and subtle essay at rating customers was tried by the Australian luxury boutique group, Art Series hotels, a company "dedicated to Australian contemporary artists".  The company called the endeavor "reverse reviews" and "invited" prospective guests to be reviewed by the hotel if they stayed between April 17th and May 31st of this year. The website termed it as a "social experiment" while noting that it was an attempt at creating a two-way street for the feedback process. More importantly, they said they sought to find out who the "best guests" are. It is, as yet, unclear how far they succeeded in the venture but following the example of the unregulated economy is not likely to produce a better feedback system.  False and misleading reviews on user generated content are an occupational hazard for hotels but increasingly customers are able to tease these out while making their buying decisions.

More relevantly, minor imperfections may actually give the establishment better credibility particularly if attempts are made to remedy them. An industry that has thrived best with a motto that puts the customer, good and bad, first ought not to try and reinvent the wheel despite the threats from the unregulated operators.

 

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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