Episode 20
· 20:42
For twenty years, every business on Earth has been chasing the same thing. Five stars, the perfect score, the flawless little row of gold that's supposed to tell a customer, trust us because everybody loves us. Nothing ever goes wrong here. And it turns out the customer doesn't believe a word of it. Researchers at Northwestern University have been watching how people actually shop and the rating that makes someone most likely to buy, according to their research, isn't five stars.
Joe:It's lower. There's a sweet spot, and once you cross it, heading up toward perfect, people start to back away because somewhere along the line, we all learned that perfect doesn't mean good. Perfect means somebody might be hiding something. So today, The Great Review Reversal. I'll tell you about the company that paid $4,200,000 to bury the very thing that would have sold some more clothes.
Joe:I'll also show you the number Northwestern put on perfection, and I'll make the case that the worst reviews you've got might be the most valuable thing you own. That's all coming up on Marginally Better.
Announcer:From the global headquarters of Johns and Taylor in beautiful New Jersey, it's marginally better. Here's your host, Joe Taylor Junior. We have built an entire economy on the star rating.
Joe:We check it before we book a hotel. We buy a drill, pick a taco place, hire a plumber. That little number does an enormous amount of work. It stands in for trust that we used to get from knowing our neighbors or local salespeople. And because it carries that much weight, a lot of companies decided that the smart move was to make their number as close to perfect as possible by whatever means necessary.
Joe:And that instinct is about to get a lot of those companies in trouble. Let's start with the research. Northwestern University's Spiegel Research Center studied how online ratings actually move buyers, drawing on a large pool of real review data. And they found that the likelihood someone buys a product peaks when its average rating sits between about four and four point seven stars, not five. After that peak, as the score climbs toward a perfect five, purchases start to slide back down.
Joe:Now the researchers gave this a blunt phrase. A five star rating is to the shopper too good to be true. The presence of a few less than glowing reviews doesn't scare people off. It reassures them. So the thing companies have been chasing the hardest may be the thing quietly costing them sales, which raises a question.
Joe:If perfect isn't what convinces people, what exactly have we all been optimizing for? Now, this isn't some subtle effect that only an economist can see. Shoppers will tell you outright. Power reviews surveyed buyers about the ideal rating, the score that would actually make them comfortable hitting buy. And just 6% of folks in that survey said a perfect five out of five was what they needed to be able to make that purchase.
Joe:The biggest group, 44%, said the sweet spot was somewhere between four and a half and just under five, and another 42% put it lower still between four and four and a half. So in a secondary survey, more than eight in 10 shoppers are now telling you in plain language that they wanna see a flaw or two before they trust you because the customer isn't looking for a company that never disappoints anyone. They've lived long enough to know that that company doesn't exist. They are looking for a company that's honest about what really happens. Now part of why people got this skeptical is because they've been burned.
Joe:The reviews themselves have become increasingly suspect. Pangram Labs, a firm that builds tools to detect machine written text, they scanned about 30,000 reviews across Amazon's best sellers, and they estimated about 3% were written by AI. Now that's a detection estimate, not a confession. But one finding fits everything else that we're talking about today. Those AI written reviews were far more likely to hand out a perfect five stars.
Joe:About three quarters of them did versus roughly six in 10 of the human reviews. The fakes gravitate toward perfect, and the people don't. And shoppers can feel it. Bizarre Voice, which runs reviews for thousands of major retailers, found in its 2025 shopper survey that the single most common frustration in the entire buying journey ahead of price, ahead of shipping, was just trying to figure out whether the reviews are real. The tool we built to create trust has become the thing trust.
Joe:The tool we built to create trust has become the thing people trust the least. So the question stops being, how do we get more five star reviews and becomes something tougher? How do we prove the ones we have are honest? And so now there's a law with some teeth. In 2024, the Federal Trade Commission finalized a rule that flat out bans fake reviews, made up testimonials, bought reviews, AI written praise, and anything that suppresses real reviews.
Joe:And for the first time, it gives the agency the power to go after violators with civil penalties. So by late twenty twenty five, the FTC was already sending warning letters and naming names, including a case against a company that sold an AI tool built to crank out reviews on demand. So the research says perfect doesn't sell. Customers say perfect makes them suspicious, and the fakes have poisoned the well. The government is even starting to fine people in The US for gaming the system.
Joe:And so every signal points in the same direction toward honesty, which makes the story I wanna tell you next so striking because it's about a company that, right as all of this was becoming clear, spent four years and a fortune doing the exact opposite. When we come back, I wanna take you inside a wildly successful fashion brand that built a secret filter for one purpose, to make sure you only ever saw happy customers. It worked perfectly until the day the Federal Trade Commission knocked on their door, and it became the first case of its kind in American history. That's after the break on Marginally Better. Wanna take a quick word about something our team built because it sits right in the neighborhood of what we're talking about today.
Joe:So everything in that last segment comes down to one word, trust. And you can't add trust to your business at the end like a coat of paint. It has to be built into the thing itself. The way you handle a complaint, the way your site answers, the question a customer's actually worried about, and whether your experience tells the truth about what they're likely to deal with. We call that trust architecture, and most companies end up building it by accident.
Joe:So that's one reason why our team made something we're calling Experience Help Desk. This is not a course that you'll never finish. It's not a a big agency retainer either. It's expert help from our team on demand. So we send over a question whenever it comes up.
Joe:Send us a quick voice note, a short video, or even just a text, and you'll get a real answer back usually within one business day. The should we even show our negative reviews questions? Is the developer quote reasonable questions? The I'm stuck between two designs and I could use a tiebreaker kind of questions? These are the ones a course can't answer and a meeting is too slow for.
Joe:It's the kind of work that we've done with our retainer clients for over ten years, and we're excited to try out this new way to engage with folks that need more occasional help. Members also get access to our full resource library. That's more than 30 guided playbooks across nine areas of customer experience, plus a little five minute challenge we put together every Monday to keep the momentum going. So we're opening this up with a charter rate just for the first few members in the door. That rate is gonna be locked in for as long as you remain a member.
Joe:And if you've ever needed a second set of expert eyes and just had nowhere to send the question, this is for you. Come see it over at experiencehelpdesk.com. That's experiencehelpdesk.com. It's Marginally Better. I'm Joe Taylor junior.
Joe:Let's go back to around 2015 to one of the great business rockets of the last decade, Fashion Nova. Now if you've never heard of this, I want you to picture this. It's a Los Angeles clothing company that figured out Instagram more than anyone else did at the time, And they would see a look on a celebrity one night, and they would have an affordable version of that look on their site within days. And then they would get it on top of hundreds of influencers and everyday customers who posted themselves wearing it. Now the founder, Skye Richard Seguin, built one of the most searched fashion brands on the planet at the time largely out of a feed full of real people in real outfits.
Joe:It was fast fashion. It was cheap, and it was enormous. And a business like that lives and dies on one thing, the look, the vibe, that sense when you land on a product page that everyone who bought this dress was thrilled with it. Their entire engine ran on aspiration. You should want to be the person in this photo.
Joe:So now imagine you're running that company and the reviews start coming in. Most are good, but some aren't because this happens to everybody in fast fashion. At some point, people start saying the fabric's thinner than it looked or the fit runs a little small. The color's off. Now ordinary, honest, three star reviews, the kind every clothing company on Earth collects at some point, and they're landing right in the middle of a gleaming aspirational storefront.
Joe:So if this is you, you hit a fork in the road like this, you can decide that you're gonna let it show, or you can decide that you want it to disappear. Fashion Nova made a choice, and the tool to carry that out was already sitting in their shopping cart, so to speak. Now the FTC would later lay out how all of this worked, and the design is kind of elegant in how plainly dishonest it ended up being. Fashion Nova used a third party review system to manage what showed up on its product pages, And they set it so that four star and five star reviews posted automatically straight to the site. No human needed.
Joe:Anything lower, three stars, two stars, one star, those reviews got held back, routed into a queue, held for approval. And then according to the government, nobody ever approved them. So from late twenty fifteen those up until about November 19, over the course of four years, hundreds of thousands of lower rated reviews just sat there, written by real people about real products, but shown to no one. The storefront stayed sunny. Every page looked like everybody loved everything.
Joe:And now the part that turns this from just what would have been a boring compliance story into something almost tragic. While Fashion Nova was burying those imperfect reviews, the research was landing in public. So by 2017, right in the middle of that four year blackout, Northwestern Spiegel Center that we talked about earlier, they published the opposite of what Fashion Nova believed, that perfect ratings read as fake and buying peaks below five stars and that a few critical reviews actually build trust, the science was already on the table at that point. Fashion Nova was spending a ton of time and real money to manufacture a flawless yet suspicious storefront that researchers had already shown sells less. So they weren't just being dishonest.
Joe:They were being dishonest needlessly and in the wrong direction. They ended up paying to suppress something that would have helped them. Those three star reviews aren't damage. To a shopper, that's the most useful information on the page. It's the stuff that tells you to size up before you buy.
Joe:If you hide it, you don't look perfect. You look like you're not telling the truth, which as it happens is exactly what was going on. And the thing that big hiding that much for that long, eventually, somebody notices. So in January 2022, the Federal Trade Commission brought down the hammer. Fashion Nova agreed to pay $4,200,000 to settle the charges.
Joe:And the detail that matters most, the one that put this episode in the history books, the FTC said this was its first ever case against the company for hiding negative reviews. Now after two decades of online reviews, Fashion Nova earned the distinction of becoming the cautionary tale, the example the government chose to make. The settlement didn't just take their money. It changed the rules of their storefront. Fashion Nova was ordered to post all of its reviews, the critical ones included, the only exceptions being things like obscene or off topic content.
Joe:The filter had to come off. The three star reality their customers have been writing for years finally had to show up on the page. Now they spent four years building and running a system to hide that honest feedback. They paid $4,200,000 when it came apart, and the FTC sent roughly half of that straight back to harmed customers. The refund checks have been going out as recently as 2025.
Joe:Now the entire time, the thing that they were hiding was something that would have made the page more believable. And according to the research, even more likely to sell. So they made a fortune to make their business worse. Now the company survived. They're still out there.
Joe:It's not the end of Fashion Nova, but it is a permanent asterisk on their record. It's a gift to the rest of us because it makes the lesson impossible to miss. You cannot buy trust by deleting doubt. The moment you scrub away every imperfection, you haven't removed the customer's hesitation. You've just removed their reason to believe you.
Joe:So the question you should ask yourself before you reach for a filter like this is the one that Fashion Nova got wrong for four straight years. When the customer tells the truth about you in public, is your first instinct to listen or to hide it? Now I wanna leave you somewhere more hopeful than a courtroom because the flip side of this is good news, the real kind. The most valuable feedback your business will ever get is sitting in your worst reviews, and it's free. Now there's a piece of Internet history worth knowing here.
Joe:Back in 1995, when Amazon was still a tiny operation, selling books out of a converted house, Jeff Bezos was showing everybody the desk that he made out of an old door, and he made a decision that terrified the publishing industry because he let customers post negative reviews right there on the page next to the buy button. Somebody wrote him an angry letter. It probably wasn't the only one, but the one that we hear about is the gist was you don't understand your own business. You make money when you sell things, so why are you letting people trash these products? And Bezos' answer, as he's later told the story, became one of the most radical ideas in modern retail.
Joe:We don't make money when we sell things, he said. We make money when we help customers make decisions. Now he didn't see a negative review as a threat to the sale. He saw it as part of the service. A bad review is how the customer trusts the good ones.
Joe:Strip out all the critical voices and you don't have a more persuasive store, you have a less believable one. And thirty years later, the rest of the economy is catching up to what he understood back then. So here's something you can actually use this week, and it costs you nothing but a little courage. Go read your own three star reviews. Not the ones that make you feel nice, the not the ones that are one stars.
Joe:Most of those are usually somebody having a bad day. Look for the three stars, the people who basically like your stuff, but then hit something that bugged them. Those are some of the most honest signals you will ever get about your own business, written by people with no reason to flatter you, but no axe to grind. In, you know, net promoter terms, we would call these folks the neutral. They're not necessarily a promoter.
Joe:They're not necessarily a detractor. They are just telling you for free what they saw and what you need to fix. And when you find a fair criticism out in public, you don't have to reach for a hammer. Just answer the criticism. A thoughtful reply under a critical review will do way more for the next shopper than a 100 glowing reviews because your reply shows them what you're actually like when something goes wrong, and that's the only thing any of us really wanna know before we hand over our money.
Joe:Now that's our show for this week. If you take one thing with you this week, take this. Trust was never the absence of flaws. It's what you do with them out in the open. The perfect storefront isn't the convincing one.
Joe:The honest one is. And building that kind of honesty into your business on purpose, into your website, into your reviews, into the way that you handle the moment something goes wrong, that is hard to do from the inside because you're too close to see it. Now if today's got you wanting a second set of expert eyes on your business, that's exactly what we built the Experience Help Desk for. You can find us at experiencehelpdesk.com. And in the meantime, thanks for listening to Marginally Better.
Joe:If you liked what you heard, do us a favor and leave us a review on Apple Podcasts. And after listening today, we'll be honest, a four star review with a note about what we could do better helps us more than a perfect score even could. Okay? We practice what we preach around here. For behind the scenes notes from me and the team, head to marginallybettershow.com or just follow our link in the show notes.
Joe:Marginally Better is a Calufrax radio production. Our producer is Nicole Hubbard. With research by Connie Evans, I'm Joe Taylor Jr. Calufrax, mean little planet.
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