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Online reputation now crucial for small businesses

On Yelp, a popular review site for everything from restaurants to gas stations, fans of Mari Luangrath's cupcake-delivery shop have noted the “hustle” of her operation and the “subtle” flavors of its products.

The same descriptors could apply to her dexterity in honing the online reputation of her 4-year-old bakery in Chicago, Foiled Cupcakes, which has earned a 4.5-star reputation. To stay on top of customer reviews, Luangrath logs on to ReviewTrackers.com, an online subscription service that aggregates and alerts her instantly of any reviews and online comments written about her business.

A recent alert informed her of a three-star Yelp review complaining that her cupcakes were dry. She immediately and privately emailed the customer who wrote the review to get more feedback. Luangrath baked another batch with a lower temperature to induce more moisture and redelivered the goods, prompting a positive follow-up from the customer on Yelp.

“If we hadn't been monitoring it, it would've been on our Yelp page for some time,” she says. “Being in the food industry, it's so difficult. Taste is so subjective. Too sweet. Not sweet enough. Too much frosting. Not enough frosting.”

Obsessive monitoring of online reviews has become a norm for tech-savvy small-business owners. The burdensome but necessary task has been made even more complex by the emergence of social-media channels, Twitter in particular, that empower opinionated customers.

But technology has emboldened business owners, too, engendering software tools that ease the process of tracking reviews on a multitude of channels and enable quick responses.

“I'm always on these sites, freaking out,” Luangrath says. “It can seem like a huge time-waster, but it's something we've got to take care of every day. Timing is everything.”

In recent years, “reputation management” services — Netvibes, Reputation.com, ReviewTrackers.com and Trackur.com — have opened shop to cater to small-business owners looking to outsource the time-consuming task of aggregating online reviews and comments.

While it may be tempting for small-business owners to shrug off a few lousy reviews, industry research shows benign neglect of a company's online reputation could quickly hurt sales — especially given the new normal behavior of customers consulting their smartphones for even the smallest of purchases.

A Harvard business school research says that a one-star increase on Yelp can lead to a 9-percent increase in sales. Four out of five consumers, or 80 percent, reverse their purchase decisions based on negative online reviews, up from 67 percent in 2010, according to the 2011 Online Influence Trend Tracker survey by Cone. “It has a really major impact on the bottom line,” says Brent Franson, vice president of sales for Reputation.com.

Review sites have exploded in recent years in number and types. Yelp is widely regarded as the most influential general review site, while Google Plus Local and Foursquare are often mentioned as rivals. TripAdvisor is the go-to spot for hotel owners but also lists a ton of reviews for restaurants and tour operators. Angie's List specializes in services.

Humble Beginnings to Digital Age

Review trackers trace their history to press-clipping services. And large companies migrated to digital solutions early on, spending a good chunk of their marketing budgets to gauge not only reviews but to learn more about influential writers, bloggers, product issues, complaints and compliments.

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This Aug. 21, 2011 photo provided by Big Bottom Market, shows from left, Crista Luedtke and Michael Volpatt, outside their store in Guerneville, California. The store, which sells local foods, had been open only two months when it received a bad review on Yelp. Technology has emboldened tech-savvy small-business owners to monitor online reviews and enables quick responses. (AP)

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