Should Your Business Become BBB Accredited?
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Mary E. Power believes that 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.
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 theBBB 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 theBBB Code of Business Practices and theBBB 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.
Mary E. Power, President and CEO of the Council of Better Business Bureaus
Mary E. Power, CAE, ASAE Fellow, is the president and
CEO of the Council of Better Business Bureaus, the umbrella organization for 112 local, independent BBBs across North America, as well as home to its national programs on dispute resolution, advertising review, and industry self-regulation.
Power has a strong background in both association management and corporate management. She is both a Certified Association Executive and a Fellow with the American Society of Association Executives, as well as a Certified Meeting Planner with the Convention Industry Council. She graduated from Michigan State University with a degree in Hospitality Business, and worked for more than 20 years for two major hotel chains – Sheraton and Intercontinental.
In 2001, she left the corporate world to become president and CEO of the Convention Industry Council, a federation of 34 associations serving the hospitality industry. Among her many accomplishments in her five years heading that association: she brought the organization out of debt, exceeded revenue goals, built up reserves to an impressive level, and significantly expanded the Certified Meeting Planner program. When she took over CIC, there were 2,000 Certified Meeting Planners in three countries; six years later there were more than 12 thousand CMPs in 33 countries. In her position as CEO, she served as the international spokesperson, and led major PR campaigns after 9/11 to promote the meetings industry. She also created an Accepted Practices Exchange, which is a “best practices” discipline for the profession, and raised $2.3 million to fund it.
In 2007, Power became Executive Director of the HR Certification Institute, an association with 126,000 certificate holders and a $16 million budget. During her tenure, she increased certifications by 15% and increased the recertification rate from 60% to 88% in over 100 countries. She served as international spokesperson, implemented a rebranding campaign, launched two new global certification programs in 49 countries, led a strategic planning initiative, spearheaded aggressive investment in IT systems, and cultivated a strategic partnership with the Society for Human Resource Management and other national and international HR associations.
Power has numerous awards to her credit, including: “Outstanding Female Executive of the Year” by the American Society of Association Executives, “Hall of Leaders” by the Michigan State University School of Hospitality Business, and one of the “Top Five Outstanding Women Industry Executives” by the New York Society of Association Executives. She was also named one of the “25 Most Influential People in the Meeting Industry” by Meeting News Magazine and one of the “Most Influential Women in the Meetings Industry” by Tradeshow Week Magazine .
Power is an active person who swims, runs and plays golf (or, as she says, to be more accurate, flails with a club). She’s an avid reader, in one longstanding book club and now in the CBBB staff book club, as well. In the past, she’s been a reader for Lighthouse for the Blind, and she also volunteers for breast cancer prevention causes. She and her husband are the proud puppy parents of a Springer Spaniel who they hope will settle down enough to be a volunteer therapy dog for wounded warriors.
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Marc Prosser has been involved in many businesses as an executive, advisor, and investor. Prior to starting his own company, Marc Prosser was the first employee and Chief Marketing Officer of FXCM. During his ten years at FXCM, the company grew from a small business to over 700 employees.
Joe said on
An interesting interview. Thanks.
Marc Prosser said on
Hi Joe, I agree with you! Nobody wants to be scammed. However, I want to business with a great firm and not just one that isn’t a scam. I think the BBB rating should be one of several points of data in evaluating a potential business. Best, Marc
Heady Shoe said on
Marc Prosser said on
Hi Heady, The article is an interesting read although, it is over a year old. Even great organizations have occasional problems. I think that BBB provides a very important service which no one else is doing on the same scale or level of care. Basically, I am willing to give them the benefit of doubt that it was an isolated incident. Best, Marc
Nick said on
In my experience the BBB really doesn’t do anything for consumers. They are a 501(c)(6) organization. That means their main goal and purpose is to do for their members. If you file a complaint against a company that is not a member of the BBB they will contact the company and that’s about it. Even if the company violated the law or completely ripped the consumer off. As long as the company responds the BBB will consider the company to have made a reasonable effort to resolve the matter.
With members of the BBB it’s even worse. The ratings for BBB members are slanted in favor of the BBB member. In the past I’ve had issues with two BBB members where almost nothing was done. Back around 2007 or so a member of the BBB kept ignoring my letters. Filed complaint with local BBB. Local BBB said they tried writing the company but received no response. There was nothing more they could do. I was floored!
I can understand nonmembers that they can’t do much about. But you mean to tell me that members of the BBB can ignore the BBB and there’s nothing that can be done? What’s the purpose of putting trust in a member if the member isn’t bound by any rules?
Recently I had a collection agency, The Phoenix Recovery Group, attempt to extort money out of my. Claimed if I didn’t pay in two weeks they were going to report it to all the credit bureaus. Two weeks came and gone. Then I got a letter saying if I didn’t pay in seven days they would report it to all of the credit bureaus. Seems to me like they were making empty threats, which was a violation of the Fair Debt Collections Practices Act. The Phoenix Recovery Group is also a member of the BBB.
I filed a complaint with the BBB against the Phoenix Recovery Group. Phoenix Recovery Group responded and claimed they followed the law. BBB said the company made a reasonable effort to resolve the matter. How. All the company did was say they didn’t break the law. What is amazing is the NUMEROUS complaints on the BBB site against the Phoenix Recovery Group on the BBB website yet they still hold an A+ rating.
I wrote the CEO of the BBB by first class postal mail, Mary Power. She basically considered it a complaint against the local BBB that handled it. She didn’t have the professional tact to contact me personally. I received some canned response from their “complaint center” that was a canned response that basically said they’re a third-party company that have no control over companies. Also stated they were neutral in disputes. This is a lie!
First and foremost, they do have some control. If a company is a member of the BBB and acts in an unethical manner and the consumer provides proof of the act then the BBB should take action against their member. Secondly, they are not neutral. BBB members can assist in committing fraud, have numerous complaints against them with the BBB, and violate federal law and still have an A+ rating.
The BBB is nothing but a money sham. They get businesses to pay them money while providing no service to the public. They lie to the public by claiming they try to help prevent people from being ripped off all the while collecting dues from members that actively rip off the public and the BBB knows about it but does nothing.
Marc Prosser said on
Hi Nick, I am sorry that you had really bad experiences with the BBB. As you note, complaints to the BBB are handled by local chapters. Some chapters may rubber stamp the actions of their members and some may strive for the highest level of integrity. My guess is that most chapters do a good overall job of handling complaints but, may be protective of long standing or active members which is perfectly understandable in organization run by members. Thanks for contributing, Marc
Elaine said on
I got almost the same thing happen to me. A company demanded money to come out and fix a well pump they installed wrong. I paid $1,100 for it and in a few days, wasn’t working. They came out to fix their mistake but charged me a $85. I should have put a stop payment on the check but didn’t want to ruin my credit, but next time I will. The company refused to refund my money, not even a partial refund. The BBB said that the company made a “good faith effort” to do so when in fact they made a “bad faith effort/no effort whatsoever”. That is like getting money stolen from you and then saying they made a “good faith effort” to return it. I’ve asked them what the “good faith effort” was and got no reply. The BBB was a reputable company at one time but is no longer. They are basically franchises and operate only for the companies who pay them money.
Gene Livingston said on
As Elaine above said “The BBB was a reputable company at one time but is no longer. They are basically franchises and operate only for the companies who pay them money. ” That’s a polite way of saying that the BBB is really just a protection racket…a much more accurate statement than anything in the above article. BBB is not what it appears to be. In fact, if a company is a member of the BBB, I would treat them with MORE suspicion than a company that was a non-member. Companies know the game…if a company is the type that generates a lot of complaints, they are MORE LIKELY to join the BBB, in order to provide themselves cover for their bad business practices. For me, that’s enough for me to avoid doing business with BBB members. BBB memberships can give you very good information on who not to do business with…BBB members.
Marc Prosser said on
To go counttrend here, Fit SMall Business (Marc Waring Ventures) just joined the BBB. They asked many good questions and did a thorough review of our marketing materials before approving us. Your criticism is focused on their complaint review process. Can you suggest an alternative that is not super-expensive for the business or the client with the complaint? Thanks, Marc Prosser
ramesh ramaiah said on
Awesome post, I never thought in this way… i have seen many reviews online that told me BBB accredited certification is must and should in order to conclude any business sites online.
However, my question…is there any possibility to get listed under BBB certification just by paying $400-$1000 bucks!
As Gene said, there are many online businesses that operating just to conceal their bad business practices…So for me…BBB is good but not that great deal to believe.
Marc Prosser said on
Even if the BBB works in the interest of its members, the reason being BBB accredited is meaningful is because they are selective about who they bring in and try to keep bad elements out.