Reputation Is The New Currency: How To Build And Protect Yours
Although the sharing economy emphasizes access over ownership, you will still need to own your reputation. Trust and accountability are the linchpins of the new sharing economy. Within the regulatory vacuum that the sharing economy operates, reputation is the new regulation.
How do sharing economy platforms achieve trust and accountability? By managing the reputation of their users through ratings and reviews. Without reputation management, the sharing economy would be the wild west.
Reputation capital is what convinces complete strangers to share assets. The most important aspect of sharing is accountability through ratings.
Rachel Botsman, one of the sharing economy pioneers, is the first to fully unpack the concept of reputation capital (see her fantastic TED Talk here). Here, she describes how your reputation dictates how many customers you get, and how much you can charge. Dr. Botsman pictures a world where your online reputation crosses platforms and is the new form of currency in the digital age. We agree.
Your online reputation is a tangible asset that you need to manage and build. If you have poor reviews on Airbnb, no one will book you. If your Uber rating is lower than a 4, you will have trouble getting riders. Uber may even ban you from driving. If your ratings on TaskRabbit aren’t stellar, you won’t be picked to build Ikea furniture. Reputation comes first, and then income.
Here at the Casual Capitalist we have argued for a long time that reputation is the new currency of the 21st century. Every single sharing economy platform has a feedback mechanism. Your ability to earn income online depends on your knowledge of these systems, and the management of your reputation. So start managing.
The 6 Commandments of Building Reputation Capital
1. Don’t be a pushover or spineless, but always be respectful and accommodating.
You will come across many tough customers in the sharing economy. Do your best to understand their wants and motivations. Provide these to the best of your ability. If you can’t accommodate, tell them how you tried, and the options they have to achieve their desired outcome.
2. Bad ratings aren’t the end of the world.
Bad ratings will happen. We are all human and make mistakes. We all know that no one is really perfect.
It’s like the Smith family down the road. They are so perfect that I often wonder if they are secretly drug dealers. Or, despite Mrs. Smith’s fantastic tuna casserole, the secret ingredient is really the remains of people who have wronged her. You get the point right? There is no need to be 100% perfect all the time. Making mistakes leads to learning. Mistakes are your tuition.
Bad ratings are unavoidable in your sharing economy journey. The point here is to learn and respond accordingly. The best action steps are as follows:
– Always respond to a bad rating;
– Be courteous in your response;
– Never insult, be arrogant, or sarcastic;
– Describe why you did what you did;
– Tell them how you tried to correct the problem;
– Apologize for the perceived injustice or inconvenience; and,
– Emphasize previous good ratings as evidence of your commitment to a positive experience.
These action steps will minimize the damage of a bad rating. Future customers will read bad rating exchanges. Wouldn’t you? Customers will have both sides of the story. They will note that you were respectful. And, they will be left with your emphasis on your stellar track record.
3. Malicious or unfounded negative ratings need to be resolved.
If you have a nasty or unfounded bad rating then take it to the next level. Consult the platform, as most have a dispute resolution option. You can describe why the rating is unfounded and possibly have it removed.
4. Respond to good reviews if you had positive experience as well.
You can respond to a positive review just as you would to a negative one. If you had a positive experience with a particular customer then tell them. “Hey Sally! You guys were so clean and fantastic to deal with, please come back any time.” Or “John you were a driver’s dream, you made my day with your jokes, I would love to get a beer with you sometime.” You get the point.
5. Don’t respond to negative reviews immediately.
Often, our blood gets boiling and we want to unleash a verbal barrage to jerky stupid heads. Don’t do this. Take some time, think about their concerns, and draft your response at least 24 hours after you read their review. This will give you time to calm down, and reflect on their grievances no matter how idiotic they may seem.
6. Be as real as possible.
People are much more likely to engage in a transaction with someone the more they know about them. In the online world, this means being as real-world as possible. To do this you need to confirm who you are. You should upload government ID, provide your phone number, email address, and link your social media accounts.
Also include a picture of yourself in your profile whenever possible. A recent study of Airbnb data found that a seller’s perceived trustworthiness is linked to their profile photo. Trustworthiness is also linked to higher profitability and increased bookings on Airbnb.
Glenn’s Bad Rating Experience
We had a difficult customer on Airbnb that I would like to share. Although this person was hard to deal with, our management company did do a poor job of serving them. We received a negative rating and review on Airbnb as a result. Instead of blaming or getting defensive, this was our response:
Always remain committed to getting to the bottom of the problems that a customer raises. If the person is being a genuine jerk, don’t respond by being negative or sarcastic. People reading the reviews will see their nasty review and then your measured response. This will build your reputation.
The point isn’t to be perfect online, it’s to be sincere and accommodating. That’s all. The internet is forever, so be sure to always protect your reputation the same way you would at work, at home, or with your friends. Own and control your reputation capital, it is the most valuable asset you have in the sharing economy.