Reputation Matters: A Guide to Managing Negative Reviews in the Financial Services Industry
In today’s digital age, online reviews have become an increasingly important factor in consumer decision-making. For financial institutions such as banks, credit unions, and other lenders, it is especially important to manage their online reputation and maintain a positive presence.
But what happens when a financial institution receives negative reviews? How much damage can these reviews cause to the business’s overall reputation? Explore below:
The Power of Positive Reviews
Positive online reviews are invaluable for any business—including financial institutions. A recent study found that 88% of consumers trust online reviews just as much as personal recommendations from friends and family members. Furthermore, 82% of customers read at least one review before making a purchase or using a service. These statistics indicate that positive reviews are essential for building customer trust and gaining new clients.
The Power of Negative Reviews
On the other side, negative reviews are just as powerful because they provide potential customers with an unfiltered perspective into what it is like to do business with a certain company or organisation. As such, they can have a considerable impact on the decision-making process for potential customers. For example, if someone is considering signing up for a home loan through a certain bank or credit union, they may be less inclined to do so if they see that there are numerous negative reviews about the organisation’s customer service or loan terms.
The Different Types of Negative Reviews that can Hurt a Business
Negative reviews can have an immense impact on a business’s reputation, not to mention its bottom line. They can hurt a business in myriad ways, ranging from decreased customer loyalty and sales to poor online presence and more. While some negative reviews are inevitable, understanding the different types of negative reviews – as well as how to respond appropriately – is the key to minimising their impact.
● Reviews that are fake or malicious: These fake reviews that give a product or service an unfairly positive rating may lead customers to purchase something they are not satisfied with, resulting in poor customer experiences and bad word-of-mouth. On the other hand, malicious reviews can damage businesses by giving them an undeservedly negative reputation.
● Reviews that are inaccurate or unfair: When customers leave inaccurate or unfair reviews, it can create an artificial perception of a business that isn’t true. This can lead to potential customers being turned off from giving the business a chance, as well as existing customers losing trust in the product or service.
● Reviews that are posted anonymously: Without knowing who posted them, it’s extremely unlikely that businesses would be able to take appropriate action if needed. Additionally, since many platforms allow customers to remain anonymous when leaving reviews, companies don’t have any way of communicating with customers who leave negative reviews and addressing their concerns. This leaves companies unable to learn from customer feedback and improve their products or services accordingly.
● Reviews that are posted by competitors: Competitor reviews can have a drastic effect on an organization’s credibility and reputation because it often creates doubt in potential customers. People rely heavily on online reviews when choosing which businesses to trust, so any negative review from a competitor can cause potential customers to lose faith in that business. And if the competitor can generate enough negative attention towards a business, it could lead to long-term damage to their brand image.
● Reviews that are inflammatory or offensive: One of the most significant risks posed by inflammatory or offensive reviews is that they can significantly decrease customer loyalty. This type of review creates an atmosphere of suspicion and mistrust between customers and companies because it suggests that the company doesn’t care about their opinions or feedback. Also, such sentiments can easily spread across social media platforms, leading to further reputational damage for the company.
● Reviews that contain personal information about the reviewer or the business: These can hurt the reputation of both parties, making them less likely to trust one another and engage in future business. And since it involves personal information, it can put a business in danger of receiving legal action from customers or other third parties if any confidential or private data was shared without permission or consent.
What Can it Do to Financial Institutions?
When a financial institution receives negative reviews, it can have a significant impact on the business and industry. It can damage brand trust and customer loyalty, which in turn can result in decreased revenue and profits. Negative reviews may also increase the cost of customer acquisition, as potential new customers may be put off from signing up due to bad reviews.
Negative reviews have been known to create a “vicious cycle” for businesses in the finance industry. This happens when customers who had bad experiences with one lender spread the word about it, leading potential customers away from that particular lender and even other lenders within the same industry. It is also possible for negative reviews to damage the public perception of an entire sector of finance, such as mortgage lending or loans. When in truth, these >investment home loans let borrowers borrow more than what they would be eligible for under normal loan products. In some cases, this could lead to fewer customers seeking services from any lenders within that sector.
What Can Financial Institutions Do Then?
Fortunately, there are steps financial institutions can take to mitigate the damage caused by negative reviews and protect their reputations. First, they can encourage satisfied customers to leave positive feedback on third-party websites like Google or Yelp — this will help offset any bad press their institution may receive from dissatisfied customers who post negative reviews.
Additionally, they can respond promptly and professionally to all customer complaints to demonstrate that they acknowledge the issue and are taking steps to resolve it quickly and efficiently. Finally, they can avail of review removal services that are now easily accessible. Specific services for various platforms like Glassdoor, Google, and Yelp can now be done well and professionally. These review removal services specialise in digital removal assignments to design removal strategies and submissions that lead to permanent removals.
Negative reviews can have a detrimental effect on financial institutions. They can damage brand trust and customer loyalty, leading to decreased revenue and profits as well as an increase in the cost of customer acquisition. Financial institutions need to take proactive steps such as encouraging satisfied customers to leave positive feedback and responding promptly and professionally to all complaints to mitigate any damage caused by negative reviews. Additionally, they should consider availing review removal services that specialise in digital removal assignments for various platforms like Glassdoor, Google, or Yelp. By taking these measures into account, financial institutions can ensure their reputation remains intact while continuing to provide quality service and products for their customers.