When consumers get bad reviews on peer-to-peer sharing economy platforms, they spread negative word of mouth about the platform even though the provider is responsible for the review. They do this because they feel the platform violated their psychological contract. To avoid such a damaging response, sharing economy platforms can keep reviews private, allow consumers to reply to reviews, avoid using misleading language in their communication, and clarify expectations to prevent contention.
While we are not in the age where our social media ratings determine our credit scores, as depicted in the Black Mirror episode, Nosedive (S03E01), customers get rated on services like AirBnB, Uber and others (the sharing economy).
More formally, the sharing economy is a peer-to-peer economic model where individuals
share underutilised resources with other individuals for money. It is convenient, economical, and environmentally sustainable. Platforms like those mentioned above and others like Bla Bla Cabs and Poshmark facilitate these exchanges and offer reviewing opportunities to both providers and consumers. While there is substantial research on the impact of consumers’ reviews, there is none on the effects of consumers being reviewed. Therefore, a set of studies investigates the questions: How do consumers react when they get negative reviews from providers? And what can the platforms do to reduce any negative impact of consumers’ responses?
The studies found that negative reviews from peer providers lead consumers to engage in
negative word of mouth about the platform. Negative word of mouth can harm the platform's reputation and revenue. This behaviour by consumers is unexpected since the platform and the peer provider are completely separate entities, and consumers actually recognise this difference. Yet their retaliation is directed at the platform, not just the provider giving the negative review. This unusual behaviour results from consumers’ perceived betrayal of their psychological contract by the platform.
A psychological contract refers to an unwritten and intangible set of mutual beliefs,
perceptions, and expectations that two parties bring to a relationship. Consumers’ psychological contracts include the commitment that they will not be unfairly reviewed, and they perceive any negative review as unfair since they aren’t likely to acknowledge their own wrongdoing. Therefore, any negative review leads consumers to believe that their psychological contract has been violated, and they resort to negative word of mouth about the platform because of such perceived betrayal.
Word-of-mouth affects many aspects of businesses, including new product launches. This post talks about promotion planning for product launches keeping this in mind.
Platform policies regarding the review can affect the severity of consumers’ reactions. When
the review is public, consumers’ sense of harm is high. Conversely, a private review reduces the sense of harm and, by extension, consumers’ desire to badmouth the platform. Further, getting opportunities for justice restoration through response to the bad review, revenge by posting an equally bad review for the provider, and raising a dispute reduces consumers’ sense of betrayal and also their intensity of negative word of mouth. However, of these three options, only the first can also encourage a continuation of honest feedback by providers.
The findings of this set of studies have significant implications for sharing economy
platforms. In the matter of reviews, they need to maintain a balance between sharing relevant information with exchange partners and protecting consumers from unfair treatment. To that end, they can use private reviews while keeping track of negative reviews to ensure that repeat or serious offenders can be tackled without a public reprimand. Similarly, providing a redressal mechanism through the opportunity to respond to a bad review can also reduce a potential sense of betrayal while also encouraging honest feedback.
Sharing economy platforms can also frame their communications using language that
reduces incongruence between what consumers expect and what they actually offer. For example, a tagline like “Always trust us!” can be misleading as it signals a higher level of protection than the platform actually offers. They can also reduce unwarranted negative reviews by clarifying guidelines to align expectations between providers and consumers. For example, they can clarify what behaviours of consumers can be judged as offending. They can also provide solutions such as quiet mode in ride-shares to avoid unnecessary contention.
Writers of negative reviews often exaggerate, especially on online platforms. Here’s how you can deal with this issue.
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