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Love It Or Leave It—Growing Power Of Customer Reviews

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The next time you're about to write a customer review, think about how far your words could go. From the retailer's website… to Facebook… to a blog… to maybe even the c-suite.

Customer reviews are carrying more clout than ever before—and a growing number of retailers are tracking every word that's said about them in cyberspace.

"Many companies now have dedicated employees who do nothing but troll the Internet for corporate references, monitor chat rooms and online forums where there could be a discussion of the brand," said Tod Marks, Consumer Reports Senior Editor. Companies will even follow what's said on marketplaces like Amazon about their products, he said. It can be imperative to intercept a potentially negative discussion and rectify a problem before it goes viral.

"They have to take these things seriously. There are more avenues for consumers to go negative on a company and be heard by a variety of people," said Marks. "Things tend to snowball."

He adds that the effects can be instantaneous—especially when you add the ease of smartphones into the equation. Bad service at a store? A customer could quickly vent about it on Twitter. The next thing you know a few friends re-tweet it and it spreads like wildfire.

Best Buy is an example of a big box retailer putting a larger emphasis on its customer reviews. The company, which is in the midst of a turnaround effort, said it shares feedback with vendors and has taken a range of actions based on the reviews. In fact, it rewards some customers with special points to use towards future purchases for completing reviews.

Down the line, the retailer plans to institute changes that will give customers new ways to be heard through social media.

"We will offer a range of reviews: crowdsourced reviews from the entire community of Best Buy customers; expert reviews of products; and reviews written by friends in the social graph of the customer," said Scott Durchslag, Best Buy's E-Commerce & Marketing president, in a statement. "Twitter is becoming an increasingly important partner in aggregating customers feedback on relevant products and services."

Best Buy is a client of Bazaarvoice, a company that works to connect many of the most well-known retailers and brands with consumers to give them more ways for them to freely interact on the Internet. The increasing exchange of customer reviews has led to companies to make changes to their product lines.

An example is Oriental Trading, another Bazaarvoice client. The company, which is known for party supplies and novelties, made changes to more than 700 products in the first eight months of using Bazaarvoice intelligence to respond to consumer feedback.

The number of companies taking customer feedback more seriously is surging, especially as a growing number of millennials come into the marketplace and use social media to make decisions on what to buy, according to Scott Anderson, vice president of Customer Communications at Bazaarvoice.

"They're (the millennials) are all about transparency and they will have more spending power than any other generation in 2017," added Anderson.

Tara Cushing knows a thing or two about the power of social media. The 37-year-old mother of young twins operates a reality TV website called TBBReality.com and it occasionally reviews products that are backed by reality stars. She also depends heavily on customer reviews before she personally buys items or services—particularly when it comes to clothing

"Things can vary so much from online and catalog. You often don't get a true idea of color of fabric quality," said Cushing.

It's consumers like Cushing that can make or break a product. Specialty apparel retailers could be among the most vulnerable to negative customer reviews.

"If a company sells one brand like American Eagle or Aeropostale, there is nothing to offset that weakness," said Brian Sozzi, chief equities strategist at Belus Capital Advisors.

He cites Lululemon, a retailer of yoga apparel that has customer blogs devoted to the brand, as an example. In March, the company recalled its Luon yoga pants after store managers voiced a concern that they were too sheer. To apologize for the mishap, the company used the community section of its website.

In this case, Lululemon was lucky. The retailer went on the offensive and caught the issue before a threat of negative reviews could surface. Now the product is back on the shelf and the retailer's stock price is actually higher than it was before the recall.


-By CNBC's Stephanie Landsman. Follow her on Twitter @StephLandsman.

Questions? Comments? Email us atconsumernation@cnbc.com.

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