Why Do Customers Write Reviews?

Online reviews can have a big impact on shops, restaurants, hotels, service providers, and other businesses. According to recent studies of consumer habits, 9 out of 10 customers won’t enter an establishment without looking at internet ratings. Most people believe the information in these reviews. Consequently, it’s important to understand why customers write them. This posts details some of the motivating factors behind online reviews and also discusses some of the incentives that customers have when leaving a review.

Revenge

Some reviewers have ulterior motives for writing negative reviews online. They can be competitors, disgruntled employees, social activists or people who have received compensation from interested parties. Fake reviews violate U.S. law, but it’s not easy to prosecute offenders. Businesses can counteract misinformation by reporting rule violations and vulgar material to review websites while encouraging patrons to post honest feedback. The drawback is that some review sites, like Yelp and Google Places, are not quick to remove negative reviews and sometimes will not remove them at all.

If a business owner or sales representative regularly have conversations with appreciative customers, he or she might benefit from telling them about suspicious negative ratings. These individuals could learn about the potentially harmful effects of the reviews and the business owner’s reasons to doubt their authenticity. Some companies have found that loyal patrons will react by going online and posting positive feedback.

Sharing Experiences Good and Bad

The majority of ratings and comments come from legitimate customers. Survey data indicates that people usually write reviews when they have surprisingly good or bad experiences. Many express negative opinions to provide feedback and warn fellow shoppers. However, around one-fifth of reviewers admit to posting critical words in an effort to take revenge.

People tend to rate businesses harshly when they encounter poor customer service or an unpleasant atmosphere. Low-quality products can also provoke negative feedback. Most clients will only complain about prices if the expense increases rapidly or they face unexpectedly large bills. For instance, some unfavorable reviews focus on inaccurate quotes or costly products with no price tags.

Nostalgic Reviews

When they write about older companies, people often accuse these establishments of “going downhill.” Customers compare stores and restaurants with the businesses that they visited 10, 20 or 30 years ago. Many of these statements reflect reality, but nostalgia distorts some memories. Nonetheless, proprietors may benefit from thinking twice before they change popular products or policies.

Backlash Against Monopolies

One of the reasons for negative reviews is that people feel they don’t have any viable alternatives to a business. Customers can’t switch providers, so they post harsh comments instead. Gas, power and telecom companies frequently suffer from low ratings. If a firm doesn’t face any major competitors, it mustn’t take clients for granted or use marketing language that highlights the lack of alternatives.

Supporters

Almost one of out 10 reviews come from people who seek to help a company, its owner or the surrounding neighborhood. They might also try to defend favorite establishments from false or unfair remarks. Small firms are more likely to receive this type of positive review. Business owners can benefit from developing friendly relationships with customers who want to see them succeed.

In Summary

To sum it up, people have a wide range of reasons for writing reviews. Many individuals simply want to help others. At the same time, some reviewers have vengeful aims or hope to profit from their comments. Companies that understand these motives can wisely optimize their practices in an effort to gain higher ratings.

Related posts from the GTS Blog

Top Sites for Translation Company Reviews

Clutch Names GTS Translation a Global Leader!

Selling your translation business. Is it worth it?

The Mergers and Acquisition (M&A) space in the translation industry is hot. It seems like every other day, a large LSP (Language Service Provider) is buying another translation or localization company. Here is an interesting page from Slator, a translation industry website, which lists M&A activity in the translation industry.  Indeed, from perusing this page one can see that there is a merger nearly every week.

Why does M&A happen in the translation industry?

Profit margins are high in the translation industry. Which means that some LSPs have cash on hand which they can use to fuel purchases of other companies. And even if they don’t have cash, they can get funding from equity firms who are attracted by high fees for the M&A transaction.  Buying an LSP makes sense as it serves as a quick path to growth and increasing market share. Vertical leaps can also be made if an LSP does not have a presence in a certain vertical, for example in the space of patent translation. So instead of creating a new department, hiring personnel, establishing accounts and and learning about the business, the LSP simply buys a suitable company for an instant foothold. M&A in the translation industry is by no means limited to acquisition of a translation company. LSPs have been known to buy technology companies (like machine translation companies or CAT tool developers) or digital marketing companies as a way of diversifying their business.

How much is your translation company worth?

PrepareACompanyForSale.com has created a tool to give translation business owners an idea if their business would attract significant interest or if they need to make some adjustments before selling. Click here to get your score and start the process of estimating the worth of your business.

Of course, M&A is a long process with lots of due diligence required before the merger is made. But a price of 5 to 6 times the EBITDA seem to be the range in which translation companies are valued. Here is a web page that lists EBITDA multiples by industry.

Can you get rich by selling your translation business?

The short answer is: yes. If you are already rich to start with. The exits in the translation business are nowhere near the crazy levels that can be seen in the world of hi-tech. In the tech sector, a startup company valuation can be independent of the revenues or EBITDA. Anything goes and that’s why people like Mark Zuckerberg and Jeff Bezos are filthy rich. For example, Amazon was losing money for years before it started making a profit. But that didn’t stop if from having huge valuations on Wall Street-the market saw the potential and priced that into the stock.

But there is no translation industry “Facebook” that has the promise of changing the future.  If you have an LSP that is not turning a handsome profit. forget about selling it. Buying a translation business has no dream factored into the price; it is a cut-and-dry business valuation which is handled by M&A professionals.

So. If you have a translation business that is selling a lot and making a lot of money, you can get a great price for selling your business. But then the question should be asked: if you are already making a bunch of money, then why sell your business?

How to sell your translation business?

If your business has been around for a number of years and is maintaining a reasonably high industry profile, you don’t have to do anything. You will get frequent emails or phone calls asking you if you are interested in selling your business. Or you will be approached at an industry conference. Here is an example of one such email:

David,
I am trying to contact the ownership on behalf of our well-capitalized client who would be interested in talking with you on a confidential basis about the possible acquisition of your company. They are keenly interested in acquiring companies that would complement their existing strategy and from the public information we could find, we think that this is a good fit.  They are ideally looking for opportunities between 2MM and 15MM in EBITDA but can go higher than this range depending on the opportunity.

So the answer to how to sell your translation business? is this: do nothing and wait for someone to contact you. That will give you better leverage and posturing for your potential sale.

Why do people sell their translation business?

Well we have already established that you can’t make a fortune by selling an translation business unless your business is a cash cow already (unlike in the tech startup sector). So what are other motivations? Retirement is one. If you have a translation business and your children are not involved, why not cash in and retire. Not everybody loves working and sometimes there are health issues involved. Or maybe you just want to stop working for whatever reason.

Another reason to consider selling a business is hitting the wall. Your business may have plateaued out and teaming up with another, larger company  will move your business onward and upward. True you won’t be the owner anymore but you will enjoy seeing your company advance and may enjoy your job more. You may make more money if the company that acquired your company does very well and you become part of the senior management team. And you may enjoy a shared vision with the new ownership which will give you purpose in your new position.

What happens to the employees of an acquired LSP?

The rank-and-file usually just keep their job and continue working as usual. Company owners of the acquired firm either retire (after transitioning with the new ownership) or get a new position in the merged company.

What is a boutique translation company?

Here is an answer I found on Quora.

Boutique translation agencies are generally distinguished by their small size, specialised focus and flexibility. They work to a totally different business model than large multinational translation agencies, aiming to provide a superlative level of quality rather than endless quantity, and because of this they are highly focused on doing a great job and building their reputation by word-of-mouth.

Boutique translation agencies are usually the targets of translation industry M&A.

The bottom line

Selling your translation business can be a good option if it fits your career goals or retirement plans. If you like your business and are making good money, perhaps check this option again when you are ready to call it a day.