How to keep your online reputation pristine

Online review sites like Yelp can build your business or sink it - one bad review can scare off a stampede of potential customers.

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The Chancellor Hotel's aggressive TripAdvisor monitoring campaign has helped it cultivate a top-10 ranking in the guide.
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(FORTUNE Small Business) -- It's a well-known customer service maxim that happy clients tell three people about their experience. Unhappy customers tell nine. Factor in searchable online review sites like Yelp, AOL's Yellow Pages and Angie's List, and those nine become thousands.

Cranky customers who post negative reviews can spell big trouble for businesses that depend on positive word-of mouth - even a single bad review can pull down rankings and scare away customers. But savvy business owners have come up with a few defenses of their own. It all boils down to plain vanilla marketing and customer service, with an online twist.

When property manager Wes Tyler first began monitoring TripAdvisor for reviews written about his Chancellor Hotel in San Francisco, he found that most were positive. But a few were excoriating, which he says "scared me to death."

One guest complained that the front desk refused a bribe for a room upgrade. Another swore that a single shoe was stolen from his room. Each reviewer assigned the Chancellor the lowest rating possible.

"The damage that one-dot rating does to us is really unfair," Tyler says. "It pulls down our overall ranking. You pull us down - you hurt us. Because that's just untold numbers of people looking at that site and making a decision to go elsewhere."

Instead of getting mad, Tyler took action. For every negative review, he began publicly posting the hotel's side of the story, using TripAdvisor's management response tool. If a complaint turned out to be legitimate, he set about making it right for future guests.

Some negative reviews focused on things the hotel couldn't change, such as room size or cable car bells ringing outside the window. So Tyler began using management postings to educate potential customers. Seeking intimate European-style rooms in the heart of downtown San Francisco? Come over to the Chancellor. Looking for large air-conditioned rooms at a chain hotel? Book somewhere else.

Tyler's view is that the days are long gone that a business should want a one-time sale if a customer is a poor fit and will leave dissatisfied.

"It's about managing expectations," he says. "I'd rather have happy guests than take someone's money and have them think, 'I never want to go back there again - I'm going to post about it.'"

Tyler also launched a campaign with TripAdvisor to take down bad reviews - and their damaging one-dot ratings - that had no basis in reality. In each case, Tyler instigated a series of e-mail exchanges with TripAdvisor administrators, explaining why a particular review was unfounded. In one instance, a guest insisted that the hotel was located next to a tenement housing building. In reality, the hotel is two steps away from Saks Fifth Avenue.

In four years, TripAdvisor has obliged Tyler by removing both of the reviews he contested. Tyler's strategies have paid off: The Chancellor now ranks in TripAdvisor's Top 10 in the San Francisco market.

"For an independent business that's not brand-affiliated, it's very, very important to be well-represented on a site where your potential customers are making decisions," Tyler says.

Silicon Valley wellness spa Preston Wynne Spas treats every negative complaint as an opportunity to create a deeper relationship with a client - and potentially turn them into a word-of-mouth marketing force .

"People who complain are already more emotionally engaged in my business than someone who hasn't written anything," says Peggy Wynne Borgman, owner of the business.

When Borgman first surveyed her spa's ratings on Yelp last year, four of five reviews were negative. She says she nearly passed out. Borgman regained her composure and quickly launched an online marketing campaign. First, she asked her loyal clients to hop on Yelp and write about the spa. "I told them we need a little love," she says.

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