We used to live in simpler times, where a small business survived and thrived based upon word-of-mouth marketing . . . neighbors and friends sharing stories, both positive and negative, about local businesses.   Of course, this is still a big part of how local marketing works — sharing stories.  The only difference is that in addition to passing along stories to their friends and associates, people now share stories with thousands of strangers online.

The problem with this new online sharing method is that the people who share their opinions are usually anonymous or unknown.   In a real life situation, most people can detect when there is a customer who has unreasonable expectations and cannot be satisfied — and they also tend to be sympathetic and understanding when a business makes a mistake, especially when there is an apology.   But online, when a negative experience is shared, no one really knows if this is a former disgruntled employee, an unreasonable customer, a competitor looking to slander a business, or a legitimate complaint.   And when searching for a business, a singular scathing review can hugely impact your business.

Many small businesses feel they don’t have the time or know-how to manage their reputation online.  But if you don’t do it, or have someone do it for you — you could be hurting your business in serious ways.  Just consider the restaurant business as an example — or any home services business.  How many people do you personally know who google a new restaurant before they visit?  You may even do this yourself, and ditto for home services professionals (there are even services like Angie’s List where people will pay to get reviews on local businesses).   A few negative reviews about customer service, the products, the food, etc. and you stand to lose that potential customer forever.  Imagine this happening every time someone Googles your business!  You just never know who is going to go and complain about a singular negative experience online these days.

There are a few simple keys to managing your reputation online:

1. First of all, you need to be aware of what people are saying about you.    Knowledge is power — and you need this knowledge on an ongoing basis.

2. Two, on forums where responses from a business are allowed — you need to respond to customer complaints.  I have seen this many times when evaluating lodging options — if there are negative complaints with no responses, I naturally feel inclined to cross a hotel off the list.  But if there is a negative complaint and a polite, reasonable response from a hotel manager — I start to question whether the negative experience was really all that bad.

3.  Third, you need to encourage your existing customers to talk positively about you online.  When someone has a great experience, you might encourage them to share their experience with others.  You can even add this to business materials — give them an email address where they can send a testimonial, share your Google Places link on your Website, and your Facebook link, of course.  The more positive reviews that you have, the less impact the negative ones will have on your business.

4. It is important to make sure that your business has great customer service policies in place, and that your employees are trained to handle difficult customers, even if you need to offer them training, or require certain reading materials as part of the job.   An ounce of prevention is still worth a pound of cure.

There is much more to managing your reputation online — and there is a great book out that Shashi Bellamkonda just shared: Online Reputation Management for Dummies.  Also, you  may want to check out our ReputationAlerts product to help you stay on top of what people are saying about your business on a regular basis.

Investing in this process will take a little bit of time and effort — but the rewards can be immense for your business.   Knowing what people are saying also gives you the added benefit of insight into where your business can improve, which is key to managing a prosperous business in the years to come.