Is the customer always right?

two way rating

When an Uber driver can rate you as a passenger and an Airbnb host can leave feedback about you as a guest, are we moving away from the premise that the customer is always right?

Originally coined by Harry Gordon Selfridge in the 1900’s, the theory that ‘the customer is always right’ has been perpetuated by businesses as a way of persuading their employees to always give good service.

However, the growth of the sharing economy is changing all this as two-way rating becomes the norm within the peer-to-peer selling environment.

Typically, a peer-to-peer marketplace brings people and/or businesses together online to deal with each other directly without having to go through a middle man.  The origins can be traced back to websites like ebay, which has morphed into a $31 billion business with the ability to make or break a user’s reputation with its feedback system.

Just as ebayers with good feedback are seen as a safe bet, those with a poor rating are avoided like the plague and this feedback works equally for both buyers and sellers.

Changing Behaviours

Two-way rating has grown because it depends on an environment of mutual trust, which is a prerequisite of peer-to-peer selling.  It relies on both buyer and seller being honest with their feedback and how this feedback will in turn be used to the benefit of either party.

An observation levied at ebay in the early days was that the feedback was too positive to be believed, leading critics to suggest that users were too afraid of retaliatory feedback to post a negative comment against another user.  eBay view the consistently high ratings as a sign that their system is working well and that buyers and sellers are behaving honestly.

Regular users of Uber will know that anyone whose rating falls under 4.0 could find it difficult to get a ride home, but does this knowledge temper behaviour of Uber passengers?  Uber seem to think so, despite the fact that Uber don’t publish passenger ratings on the app for fear of reprisals against their drivers

Brand Advantage

Two-way rating is not just a growing trend for peer to peer selling, brands in many different sectors are looking at ways to rate their customers and use this to their advantage.

For example, insurance providers such as the AA and RAC use a black box, and Aviva has an app, which records how safe a driver is and leads to lower insurance premiums for the better drivers. Although this could work both ways and increase premiums for drivers who get a low safety score.

Why this matters

Just as it is now possible view aggregated customer reviews about brands, products, films, etc, it is predicted that within the next 5 years, the various customers’ ratings will also be able to be accessed as an aggregated score, similar to a credit rating.

This will allow brands to access a wide set of scores for any customer’s behaviour and target the best customers based on their activities.  Conversely, for the customer the appeal of being a 5 star customer will be heightened by the incentives offered to them by brands wishing to attract consumers who will potentially cause them the least problems

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