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One of the more innovative capabilities we have developed at J Turner Research is a proprietary AI tool designed to identify potential FTC guideline violations in review-generation practices. The FTC looks at reviews that have been subject to incentivization, prone to review-gating, left by employees, or are inorganic in any way.
As you have probably heard, the fines are hefty (up to $50,000 a review). But the real problem with manipulating online reviews isn't the FTC – it's that it creates a false picture of your operations, making it harder to identify and fix issues that actually drive renewals and leasing performance.
The latest Google updates, detailing their ramp up of policing inorganic activity, has made the industry reevaluate its review push practices. We argue that it is long overdue, not just from a moral high ground, but because we believe that gamification with online reputation actually blinds you from seeing operational issues. When organizations place excessive emphasis on increasing review volume or ratings, they may unintentionally lose visibility into operational issues that have a greater impact on resident satisfaction, renewals, and leasing performance. Leadership sees a healthy reputation score while residents continue experiencing the same problems and prospects see a property underperforming.
You can read more about the FTC Guidelines below, but even for those comfortable with bending the rules, we believe they should be aware that FTC violations actually skew the perception of how good their business is.
The Background
Pushing inorganic reviews is unfortunately commonplace. We have detected companies with incredibly high rates of potential FTC violations, including one NMHC Top-50 company with over 15,000 instances of bots or employees leaving reviews. In fact, it is so understood as “normal” that a vendor’s marketing flier even mentioned a service that captures unhappy resident feedback privately before they post online. This would clearly be a violation of the FTC’s regulations to:
- Not “prevent or discourage people from submitting negative reviews.”
- “Treat positive and negative reviews equally. Don’t subject negative reviews to greater scrutiny.”
Do these types of things work? Sure – if companies gamify their reviews or keep negative feedback offline, metrics like Google have no place to go but up.
However, it is totally empty and meaningless movement – it has nothing to do with resident satisfaction improving, meaning you aren’t going to see renewals go up. You’re also not going to get the perceived boost to prospect traffic. Prospects are going far beyond that. As we wrote about in our article in Multifamily Executive last month, most prospects search for apartments “with low hope and high fear, not caring about positive reviews and actively looking to avoid negative outcomes and find reasons to disqualify a property.” They read negative reviews and use AI to uncover what could go wrong, often choosing not to tour even a 4.9-rated property that gets complaints about key operational issues like Pests, Security, or Financial Clarity.
While we have been able to clearly detect which companies and properties are gamifying their reputation, we wanted to keep this analysis constructive. Our objective was to quantify the ill effects it can have on your understanding of your reputation.
Putting your focus on taking care of your residents as opposed to amassing tons of reviews sets you up to get more renewals and attract more prospects – and that’s what matters!
Scope of the Study
J Turner Research looked at the last year of reviews to calculate how often companies violate the FTC guidelines. Using J Turner Research's proprietary AI detection methodology, we identified patterns consistent with review-gating, employee reviews, incentivized reviews, and other forms of inorganic feedback. We then looked at the ratio of these instances versus the number of properties within each company’s portfolio to identify the companies using non-compliant review practices the most and least often. For the sake of removing sample size skew, we limited the analysis to companies with at least twenty properties. Unsurprisingly, we found a good amount of companies on both sides of the spectrum.
There were 85,107 potential FTC violations across the industry. Most companies had basically zero instances of inorganic feedback. Of the 1,407 measured companies, 871 had basically zero violations. Meanwhile, the top-100 biggest infringers made up 80% of the total violations.
Our goal was simple: compare the companies gamifying the most often with those focused on resident satisfaction to see the effect on resident loyalty and prospect perception.
The Findings
Our analysis suggests that companies focused primarily on resident experience are likely to outperform companies exhibiting higher levels of potential FTC-related review activity across several key resident satisfaction and prospect perception measures.
With the prospect perception piece, it was incredibly clear that the implementation of gamification practices could not fully prevent complaints. As we referenced, this is key, as this negative content is what AI uses to explain weaknesses and are the very things that scare off prospects from touring/leasing. We compared the companies pushing the highest volume of gamified reviews to the companies in our survey database with the highest resident satisfaction scores. The resident satisfaction group received at least 25% less complaints per unit than the gamification group across all areas of the resident experience including facilities, maintenance, and the leasing office’s service. The difference was even more stark in the areas most closely associated with strong resident relationships. Complaint rates were reduced to about half in these operational areas. No number of fake reviews or negative review gating could mask real operational deficiencies.
| Rate of Complaints: Satisfaction vs Gamification Groups |
| Category | Difference |
| Pests | 27% |
| Security | 35% |
| Financial | 36% |
| Customer Service | 44% |
| Communication | 35% |
| Maintenance Service | 37% |
| Maintenance Timeliness | 28% |
Likewise, resident loyalty suffered for the gamification group. We compared the resident satisfaction scores of the companies infringing the most to the companies infringing the least. At J Turner Research, we measure satisfaction through our proprietary TALi (Turner Apartment Loyalty Index) score, which calculates residents' likelihood to both renew and refer. The gamification group, the companies falsifying their reputation the most, scored substantially lower than those simply focused on taking care of their residents.
| Group | TALi Score |
| Companies Cheating the Least | 7.06 |
| Companies Cheating the Most | 6.64 |
Conclusion
The takeaway here is short and sweet: you should not be gamifying your online reputation. Behemoths like Google and the FTC are increasingly focused on identifying non-compliant review practices. And even if you get away with it, it’s distracting your company from performing as well as it could on things that actually matter. Organizations that invest in operational excellence are more likely to improve resident loyalty and attract qualified prospects than companies whose strategy ends with influencing reputation metrics.
At the end of the article we wrote for MFE, I asked, “do you want to be good at getting reviews or delivering great service?” I pose a similar question to you:
Do you want to focus on optimizing your reputation metrics, or the resident experience that ultimately drives them?
ABOUT THIS BLOG:
The insights in this blog came from utilizing J Turner Research’s text categorization tool, Einstein. Einstein uses Thought Analysis, a proprietary AI software, to objectively show you your operational strengths and weaknesses based on anything anyone has ever said about you online in reviews. What is being said is incredibly valuable because it is essentially the "why" behind your scores. Reviews are unprompted descriptions of why a resident is satisfied (left a high star rating) or dissatisfied (left a low star rating). This means that what is being complimented and complained about can be seen by owners and operators as drivers of satisfaction/dissatisfaction.