Joininh the Better Business community

Becoming accredited by the BBB offers big benefits to small businesses. The key term is “accredited” rather than join”. A company must apply to become accredited with a local BBB. Not all companies are accepted, and those that do must operate with integrity to keep their accreditation. Because not every company can be accredited, a BBB accreditation is meaningful to potential customers. Consumers turn to the BBB’s website 130 million times per year to look up businesses. The BBB website provides basic information on businesses, their BBB rating, as well as detailed information about customer complaints.

In January 2014, Mary E. Power became the President and CEO of the Council of Better Business Bureaus. Fit Small Business had a chance to interview Mary E. Power by email. Our basic question was, “Is BBB accreditation still meaningful in a world where consumers turn to Yelp, Angie’s List and TripAdvisor for business reviews?” You can see her words below, but I think the answer boils down to the following point:

The BBB is an organization aimed at protecting the public from unscrupulous businesses and business practices. It’s fundamentally different than an online review service which places an emphasis on if reviewers “like” a business.

Why should a business join their local BBB?

BBB has been around for more than 100 years… since the days of snake oil salesmen, when advertising was a bit of a “wild, wild west.” No one was looking out for consumers who were being misled by deceptive ads until BBB was created. With today’s online, interconnected, global economy, we’re right back to that “wild, wild west.” People need to know who they can trust, and BBB Accreditation helps a company stand out. If a business is accepted for accreditation, they become part of one of the most widely recognized benchmarks for trustworthy businesses.

The strength of BBB is that we are governed by standards that are set at the international level, but services are provided at the local level… so it’s really the best of both worlds. Each BBB is an independent, local non-profit corporation governed by a board of directors that is made up of local business leaders. The BBBs are out in the community, working with Chambers of Commerce, Attorneys General, law enforcement, and others to promote ethical businesses and to protect consumers from unethical ones.

What does it take to become a member? What are basic standards that members agree to meet?

Becoming accredited gives a business the opportunity to show its level of commitment to being a company that customers can trust.

For starters, businesses must have a B or higher rating with BBB in order to be accredited. They apply for accreditation with their local BBB and must be approved by its board of directors, which is made up of other local business leaders. BBB will look at a range of factors when making the decision, including how long the company has been in business, whether they have any complaints on file, how well they have handled those complaints, the reputation of the owners or principals, etc. They will also look at the company’s website, its advertising and its marketing materials to make sure it is truthful in its dealings with the public. If the business is in an industry that must be licensed, BBB will require proof of that, as well.

Businesses must pledge to adhere to the BBB Standards for Trust, the eight principles that sum up the important elements for maintaining a trustworthy business: build trust, advertise honestly, tell the truth, be transparent, honor promises, be responsive, safeguard privacy, and embody integrity. The eight principles are the foundation for the BBB Code of Business Practices and the BBB Code of Advertising, which all Accredited Businesses must follow.

What is the cost of “membership”? What are the benefits?

The cost of accreditation is set by the local BBB where the business is based, and it varies depending on the size of the business and the number of employees. For small businesses, the range is roughly $400-1,000 per year.

The primary benefit to businesses is being associated with an organization that has stood for trust in the marketplace for more than 100 years. Each BBB provides its Accredited Businesses with the BBB seal in a variety of forms that can be displayed in stores and offices, on company vehicles, on websites and in advertising. The seal shows customers and potential customers that the business is committed to ethical standards.

What happens when a consumer files a complaint?

One thing that really sets us apart from most services that provide reviews; we verify that the consumer is actually a customer of the business and we give the business a chance to respond before we publish anything.

The first thing we do, usually the day the complaint is received, is acknowledge the complaint to the consumer so they know we are working on it. Then we contact the business, share the complaint with them, and ask them to respond within 14 days. We really encourage the business to work the problem out with their customer, and we give the customer the opportunity to let us know if they are satisfied with the business’s response. This helps reestablish trust between the business and their customer, and a significant portion of our complaints are resolved at this level. If we feel the company has been responsive and reasonable, their handling of the dispute is reflected positively in their BBB rating.

If we don’t hear back from the business within the 14 days, we send them a second notice and give them another two weeks to respond. If we still don’t hear back from them, we close the case and their lack of action is negatively reflected in their BBB rating. It’s not possible to ignore complaints and keep a good grade, so businesses that don’t respond will see their grade drop…as far down as an F if they keep ignoring their customers’ complaints.

If a business and a customer can’t work out the dispute we try to help them, first informally and then through mediation or arbitration. We have hundreds of trained arbitrators to assist with this process.

Sometimes a business tries hard to settle a complaint but the customer still isn’t satisfied. If we feel the business made a good faith effort but the customer is being unreasonable, we will note that on the file and close the case in the business’s favor. With dispute resolution, not everyone will always be happy with the results! The goal is to be fair.

How popular is the BBB website?

Our website – bbb.org – is very popular! It’s one of the top 350 websites in the United States, according to Alexa. Only a couple of nonprofits rank higher than us (Wikipedia and NPR, for example). We get between 10-12 million visitors every month to our website, and consumers look up businesses more than 130 million times every year. bbb.org also has what is called a Domain Authority of 96 out of 100, which means it is highly trusted by users, other web sites and search engines.

Because of these two factors, being listed on BBB’s website adds to the search engine optimization (SEO) of the business’s website and helps them rank higher in consumer searches. Many customers also find businesses they can trust by searching on bbb.org, so there is the referral factor. And of course, displaying the seal online and at the place of business helps consumers recognize the company’s commitment to trust in the marketplace. All these have helped BBB maintain one of the highest trust factors of any review or ratings service (we tie with Consumer Reports in most surveys and we outrank all of the for-profit review services).

How has the value proposition of the BBB changes for businesses due to advent of review sites like Yelp, Angie’s list, Google Reviews?

While BBB is often lumped together with online review sites, we don’t really see them as “competitors” because we offer more in-depth information. We suggest that consumers check BBB first, but other sites can be helpful in addition to BBB.

I should point out that Angie’s List is a BBB Accredited Business with an A+ rating, so clearly they understand the value of BBB to a business. Although Yelp is not accredited, they respond promptly to complaints and work hard to maintain their A+ rating. Google currently has a B rating due to a government action, but they handle all of their BBB complaints promptly. We are also working with Google and the National Cyber Security Alliance on a series of events this summer and fall to promote two-step verification, which will help consumers be safer online. These are all companies that offer meaningful services to consumers and that value their relationship with BBB.

That said, we also offer more services to both consumers and businesses than most online review sites. For starters, we have locations in every major market in North America, with local elected business leaders. In each location, some staffers are dedicated to accrediting good businesses, while others are dedicated to exposing bad businesses and scams. Because we verify that all complaints and reviews come from actual customers, it is not possible to trick our system into an artificially high or low grade. Thanks to the Accredited Businesses that pay dues to their local BBBs, we are able to offer our services for free to all consumers.

I should also add that some so-called review sites publish negative reviews and then charge businesses to take them down. We consider that substandard marketplace behavior and we absolutely do not condone that. In fact, many of those review sites have F ratings with us.

When I think about the BBB, I think about checking out complaints, but the BBB also has an oppty for reviews? What is the ratio of compliant to reviews?

Some BBBs now offer customer reviews on their websites, but not all of them. Because BBB is a federation of locally run organizations, we have some programs that are considered core services all BBBs must offer – reporting, ratings, dispute resolution, advertising review, investigations – and some that are optional, such as customer reviews, charity reviews, and BBB Military Line. We can’t really compare a core service against a non-core service.

What determines a companies rating?

A: There are 16 factors that go into determining the BBB rating and we explain them on our website. The letter grade (from A+ to F) represents BBB’s opinion of the business based on the information we have from the business itself, from its customers and from our experience with them. On each Business Review, we explain the significant factors that both raised and lowered the grade, how many complaints we’ve received in the past three years, and how the business has done in responding to those complaints. We also publish details of the complaints, minus personal information, so consumers can read for themselves the experiences of other customers and see how the business responded.

What should small business know about the BBB?

A: Ethical businesses should know that BBB is here to help them succeed. Business owners who understand the value of a trusted relationship with their customers will be very much at home with BBB, and we would love to talk to them and show them how BBB accreditation can help their business.