I know there are a handful of review sites out there like yelp. I've read a lot of complaints by some owners not liking negative reviews.
1. How do you engage customers who left bad feedback?
2. What tools you wish was out there to help facilitate you and the customer? Would being able to reply back to the bad reviews help?

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The Internet has created, with sites like Yelp and Chowhound and others, a situation where anyone can say pretty much anything - sometimes the negative comments come from disgruntled present or former employees, other times from "foodies"
who aspire to be critics but really are not well informed about food. It presents a dilemma - I don't think you can really respond to all negative comments - doesn't there come a point where you have to forget about them unless they are really damaging- and hope that the positive will outweigh them? I'm not sure operators have time to respond to all the negative comments - one restaurateur tells me there is a lot of customer "anger" out there that is probably more a reaction to fear about the economic situation than anything else.
Susan,

There are so many communication outlets out there. You also have talk radio, the 'consumer reports" on the local news and even newspaper in addition to the
internet sites you listed.

I agree, sometimes, you have to roll with the punches and move on, unless, it is so damaging that "damage control" needs to take over.
I feel the trick is to try and engage a customer before they leave the restaurant. Many folks who eat out won't necessarily write a bad review if they feel that their problem was addressed while still at the venue.
As for Yelp, I beleive that they do have a private way to communicate with the reviewer in order to rectify problems.
What I recommend is this, if it's an internet based site try to see if the site will get in contact with the original reviewer. Some sites will some won't.

I'm the CEO of We8there.com and our policy is this; if a business owner or manager request we get in contact with the reviewer because of a negative comment, we will contact the reviewer of the business and try to get them to communicate.....If the issue is resolved, we will allow the original reviewer the option of posting a new review reflecting the changes. We do not allow disgruntled employees to post negative comments and if one slips by and we find it we delete it.
How do you determine that that's who they are?
We8there.com has a system that can detect many reviews that are posted by employees ....we8there.com has rejected more reviews than we have posted ...we were mentioned on ABCs 20/20 for being one of the top sites for detecting and catching fake or bogus reviews posted by disgruntled employees..
Cool! How did you first launch?
Nice site! But how is it any different than any reviews sites like yelp?
There is a significant difference between Yelp and we8there.com, the most important difference; is we do not permit personal attacks against restaurant owners or workers .... All the reviews listed on we8there.com are read before being posted. We8there.com has been called the Secret Shopper on steriods website because if restaurant owners sign up for our Premium Listing Service they get notified when a review has been posted and not find out what was posted by suprise...
This works assuming you've caught the person before they've left your premises, which isn't usually the case because A) most don't read body language properly to know when someone is upset or uncomfortable. B) most don't ask the right questions at a table so the usual response is going to be "oh, everything was fine." C) Let's face it, as managers or owners, you really don't have time to check on every single guest in your establishment.

As for negative reviews, they're going to happen, but shouldn't happen often. If the reviews are consistantly poor, then there's probably a problem that needs correcting.

I don't think it's right to just ignore reviews, get online and address the reviewer, it shows you care. Saying you're sorry for a diners negative experience is not admitting fault. You can simply say something like "we're sorry the experience at _______ was not to your expectations. In an effort to maintain our high customer service standards, we make it a point to address each table through out the night. It appears we may have missed yours. Please let me know what we could have done to make your night a more enjoyable experience."

Most customers, whether in person or online, just want to be heard. Give them their moment to be heard and ask what they would like. Chances are they're not sure or their needs were minor.

my 2 cents
I totally agree Paul!
However, if you have 100 customers who have the exact same problem, you're not going to email each and every person. How do you notify a mass audience?
If I were consistantly getting negative reviews, then I think I (the establishment) would be better served if I used my time correcting the problem versus answering each negative reviewer.

There's no good in trying to sugarcoat a problem if the problem doesn't get corrected.

I'm surprised it hasn't been mentioned here yet, but there's one thing every single customer gets...a bill. Rather than comment cards on the table, which I think can be a little tacky and uncomfortable to fill out if it's a negative review, why not put your web address or email information to leave comments and feedback on the receipt.

As most establishments are using POS systems, you can easily have this information on your receipt, just as you would your establishment name and number.

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