The Better Business Bureau – How relevant is it today?

Store FrontsEven if you haven’t had a claim settled by the BBB, you’ve probably been approached to be a member. The Better Business Bureau historically was the business watchdog before Angie’s List and other user-defined opinion-rating systems sprang up and proliferated. There wasn’t an owner or shareholder’s group – or even a ma-and-pa business enterprise — who didn’t fear showing up on a bad report issued by the BBB. However, in truth, the agency has always been comprised of business “members” who pay annual fees for listings and for use of the BBB seal that implies, in consumer’s minds at least, an accreditation or endorsement of sorts.

Today, there are 113 Better Business Bureau’s across the country and in Canada, all connected by a unified database, common reporting practices, and monthly audits. The firm also collects information on not-for-profit charities. I asked Kimberly Hazen, Regional Director of Southwest Wisconsin Region BBB, how relevant the organization is today, and what exactly the agency does do for its paying members.

When asked how the BBB walks that fine line between its perceived role as a consumer advocacy agency, and its actual purpose of being a membership organization for businesses, Hazen replied, “Ah yes, the toughest question of all. I’ll have to take you back to 1912 when the BBB began as a self-regulatory group for businesses. We are not, contrary to popular opinion, a consumer advocacy group. Our mission is to act as a mutually trusted intermediary to resolve disputes and provide information to assist consumers in making wise buying decisions. To accomplish this, we are guided by standards applied consistently to all businesses — whether they provide financial support or not — and all consumers in the complaint and review process. These standards are monitored and audited monthly by the Council of Better Business Bureaus. This enables the entire BBB system to act uniformly.”

What is the BBB doing differently today than 10 years ago?

“First and foremost, we serve two distinct groups — consumers and businesses,” Hazen answers. “For consumers, our main ‘product’ is the information we offer to help make informed purchase decisions. Ten years ago, BBB’s operated more separately. Now, if you check BBB.ORG for a file on a company, you will be seamlessly presented information from the BBB that services the area where the company is located. Years ago, you would have had to figure out the location of the company and which BBB to call directly. In addition, the BBB now offers ratings for companies (from A+ to F) rather than the ‘unsatisfactory’ or ‘satisfactory’ description of years ago. Also, we will launch a newly-designed search engine in July. This will make searching for information on a company easier and more intuitive. We’ll also be able to provide ‘industry tips’; for example, if you search for a payday loan store, your search will return an article on high-interest loans and what you need to know to make a good decision.

“For businesses who support us, we have added “Request-a-Quote”, which is a direct link to our Accredited Businesses section, where customers can request a contact from them. We also have Consumer Reviews (like Yelp) which serve a different purpose from our reports, which are third-party and completely objective. The Consumer Reviews serve the need when a website visitor is looking for an opinion. As you know, the BBB does not offer advice or recommendations on specifics companies, products, or services.”

What industry generates the most inquiries and/or complaints?

Hazen replied, “Believe it or not, the top industry for inquiries is Roofing while the top industry for complaints is Department Stores.” The top group, roofing contractors, generated 61,963 inquires in the past year, with construction and remodeling a close second at 61,367. Auto Repair & Service was the subject of an inquiry 43,556 times (and the category Used Auto Dealers was investigated 33,303 times). Plumbers were at the bottom of the “Top 10” list with 28,674 searches.

As for complaints, 646 were filed against department stores, with mail order and catalogue shopping coming in second on the Top 10 Complaint List with 539. Auto Dealers (new cars) showed up third with 434 complaints, followed by the Auto Repair & Service category at 233. Collection Agencies made the list with 192 complaints, followed by Restaurants (184) and Insurance Companies (150).

And what does the BBB arbitrate most?

The answer was sobering. Hiring a company to do a customer-point-of-contact review might be a good idea if you want to avoid the hassle of arbitration by the BBB, since customer service complaints are the most prevalent problem. I conducted one for a utility company, and we identified at least a dozen training opportunities to avoid potential customer conflict, as an example of how such assessments work. Where to start? The most irritating situation, according to consumers, is differences of opinion over billing or collection issues (1,722 complaints) with general customer service annoyance a close second (1,624 in the past year, Hazen reported). General (poor) service issues accounted for another 1,330 complaints, or 13% of the contacts with the BBB. By far, service-after-sale issues raised a lot more red flags than advertising or sales practice issues, but either way, if reps are overpromising or customer service is underperforming, you might get a call.

Is the BBB still relevant? I believe so, after talking to Hazen, from a risk management standpoint. It’s one thing for a consumer to post a hateful remark on an internet site and another for a company to be made aware that a customer is dissatisfied, and then have the opportunity to improve the customer experience through fair arbitration. The new linking system to member businesses may prove to be a fruitful lead generator for some business types as well. So if you get the call to join, consider it; a pound of prevention by helping to sustain an arbitration group could be worth a pound of flesh in a court system for the consumer who wants redress or recourse at any cost.

About Jody Glynn Patrick

Jody is President of Glynn Patrick & Associates, which provides management consulting, executive coaching and strategic planning services. She is Publisher Emeritus of In Business magazine, which she published for 17 years. Selected as the “U.S. Business Journalist of the Year” in 2007 in Washington, DC, by the U.S. Small Business Administration, Jody has been a business reporter, editor, radio talk show host , and has won other state and national journalism awards. At the same time, she has helped corporate clients grow their businesses -- the basis for her practical coaching advice here. She also was the 2005 Athena Award recipient for her leadership role in mentoring other professional women. Jody will be talking with you weekly on TDS’ blog to share her insights and tips from the C-Suite perspective. Follow on G+.



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