Strategy in the News: Fake Review Scams

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RISKY RELIANCE         

Sneaker Selection

Here we are online, looking for a pair of sneakers.  We’re at the site of a major online retailer.  [sorry – ignore this interruption: BYB6NREXZYJG]  So many sneakers to choose from.  A dazzling array of makes, models and colors.  How to choose?  After going down the search tree, we find several candidates that look pretty good.  Time to check out their customer reviews.

Wow – so many 5-star customer ratings!  Funny.  As we read along, some reviews emerge as rather odd.  Maybe it’s the way the reviewer slipped into “marketing speak” – which we wouldn’t expect a real consumer to do.  Maybe the praise was too effusive (they’re just sneakers, after all).  Maybe because the review was overly about the brand and not about the shoe.  Maybe a combination of these things.  And there are a few negative reviews, too, but some come across as superfluous; way out of scale for what seems like a negligible fault.

Something just doesn’t seem right.  What’s going on here?  Articles have been showing up lately, that make what’s going on quite clear:  many companies are using a strategy of manipulating online reviews to increase sales.

“You’ve been living in a dream-world, people”

It turns out that a significant number of “customer” reviews out on the web are bogus.  Many companies seeking an advantage in online sales are using fake reviews to get customers to buy their products/services.

A bogus review industry has sprung up support this strategy.  It started with companies having employees secretly write and place positive reviews about their own company, and negative reviews about their competitors.  The next, and obvious, evolutionary step was the advent of companies with skilled writers, that would do this for other companies for a price (the perfect outsourcing opportunity!).

Another branch in the evolutionary tree was to offer rebates to customers who actually bought a product – if they wrote a positive review of the product (“In return for writing the review, we will refund your order so you will have received the product for free”).  At the time of a recent NY Times article, a company making the above offer had received 4,945 company reviews on Amazon.   The rating?  4.9 out of 5.  Who wouldn’t want to do business with such a well-loved company?  Where do I sign up?

But evolution moves inexorably on.  There are now companies that produce Web Content Management (WCM) software, that client companies use to build profiles of customers visiting their site.  This is so that the companies can more effectively target their customers – which is normal.  But many then use the profiles to generate and place (computer aided, of course) unique, demographically appropriate, credible-sounding positive reviews of their products.

An anonymous commenter to the Times article, who works for a company that makes and sells this WCM software, estimates that approximately 60% of reviews and recommendations seen on most websites are software-generated, and says to us purchasers who rely on online reviews:  “You’ve been living in a dream-world, people”.

The number sounds high to me, but there is an active and increasingly sophisticated industry producing phony reviews and placing them on online retail sites.  And we’ve been relying on them in making our buying decisions.  A serious Caveat emptor situation.

What’s their strategy?  What’s driving it?

The driver is the desire to make more profit.  They use any of several variants of the same basic strategy for accomplishing this.  Here’s one (remember, right to left):

Scammer Strategy

For companies selling products or services online, variations on this strategy come in selecting and exploiting advantages in available resources:  buyers willing to write favorable reviews in exchange for compensation, and employees willing to write the reviews (instead of hiring a service to do the job); software available to to profile customers and write attractive favorable reviews to induce us to buy their products/services.

Whatever the variation, it all comes to the same:  companies that engage in this practice pay for and deliver false testimony to mislead us into buying what they offer.

What’s our strategy?

Various options are available to us for dealing with false testimony about products and services.  One promising avenue is to simply avoid relying on reviews.  It’s called “buy local”.  See for yourself, try before you buy, and if it doesn’t work well or if you just don’t like the thing, take it back for a refund.

It also supports local businesses & jobs, tends to keep the money local, and tends to keep the availability of more products/services local.  Good for the community; good for you.  A preferred approach.

But let’s face it.  Even if you live in a big urban environment, you can’t always get what you want locally.  So in many cases we’re back to buying from a distance, most probably on line.  And that means we have to engage in a bit of strategy recognition to detect fake reviews.  These days a lot of thought is being put into how to weed out the bogus customer reviews from the real ones.

Professor Bing Liu, an expert in data mining at Univ. of Illinois, Chicago, runs a project for computer detection of fake reviews.  And consumer advocate/protection groups  have published advice on how to personally detect phony reviews (without special technology):  e.g. Consumerist, Consumersearch, and Lifehacker.

These tips can work in conjunction with a buyer’s intuition.  Basically we need to switch on our bullshit detector before starting to read reviews, and then just get an initial impression of them.  Once we have an impression, we can take a closer look in terms of the tips.

Have you read Malcom Gladwell’s book, Blink?  It opens with an introduction that describes the reactions of a few art historians to their first view of a “6^th century BC sculpture” the Getty Museum was about to buy for $9.5M:  it just didn’t look quite right.  And it turns out that that was because it wasn’t quite right.  It was a fake.

The art historians immediately knew it was a fake, but couldn’t at first identify exactly why they sensed it was bogus.  After some reflection, they could eventually identify cues that had made them feel sure it wasn’t real.

For both the sculpture and our reviews, professionals have gone to great lengths to convince us that they aren’t fakes.  Like the art historians approaching the sculpture, when we approach the reviews we need to first bring to bear intuitive, and then critical thinking.

We want to keep it simple.  We just want to select a good pair of sneakers and get on with life, right?  So our strategy looks like this (right to left):

Our Strategy

Just remember:  when it comes to buying on line, we have to keep our guard up.  The good news is that when we find a fake review it saves us the trouble of buying that company’s products or services in the future.

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Photo credit: Sneaker Selection, by Fredrik Lindstrom. See his photo stream at www.flickr.com/photos/frli/3679098478/