Customers place an increasing amount of stock in online reviews. According to government research conducted last year, more than half of us regularly check them before deciding to buy something. They’re certainly a more reliable source of information than your average high-street salesman.
But they’ve also been problematic. Last year the government took the reasonable decision to launch a crackdown into online reviews amid claims businesses were dishonestly posting fake ones to promote themselves. At the same time many a business has fallen victim to dishonestly negative reviews posted by rivals or unsympathetic acquaintances. Would you believe it, not everything written online is true?
One company that’s keen to restore trust in online reviews is Feefo. Launched in 2010 it now has a fairly impressive 3,000 paying business customers that pay it to handle their reviews. Unlike many sites, including TripAdvisor and Amazon, Feefo only lets people post a review if they have definitely purchased something. Its client merchants provide the start-up with their sales data, which it uses to coax reviews out of their customers. These can then be read by anyone on Feefo’s website.
Backed by Charles Tyrwhitt founder Nick Wheeler, the company is led by business partners Andrew Mabbutt and Matt Eames (main image, right), its CEO and chief commercial officer respectively. Eames helped start the company after a colourful career that included stints at Trent Bridge and Nottingham Forest Football Club and in financial services.
‘After a few years I really wanted to set up my own thing,’ he tells MT. ‘My wife and I had had our second child who was quite young, and she said "I trust you but this is ridiculous". I was earning a really good wage and we’d bought a second house and so I guess I was resigned to staying put.’
But then a friend introduced him to William Cawley and Edward Lennox, who were looking at launching an online reviews site and wanted some feedback on their business idea. ‘I ripped them to pieces to begin with,’ he says. ‘I said you need to change everything – it’s difficult to understand, your pricing strategy is all wrong, your marketing is wrong. I said I thought they needed some investment but to get that they needed to write a business plan and pitch to an investor.’ They didn’t know how to do that so Eames invited himself in on the business plan and helped pitch to Wheeler. After some tinkering with the plan he agreed to put up the seed money and introduced Eames to Mabbutt (the three of them have subsequently bought out Lennox and Cawley).
Wheeler had been clear the investment was a one off so the founders didn’t have time to waste. ‘There was a point when we knew the investment would have disappeared and the turnover would have to take over,’ says Eames. ‘We signed some big deals with big brands and did lots of networking and we actually hit that turning point where the revenue would pay for Feefo about six months [earlier than planned].’
Now its clients include Expedia, AXA, We Buy Any Car and, of course, Charles Tyrwhitt. Eames says the business hasn’t gone overdrawn, is making a profit and will reach £10m in revenues next year. It has also resisted the lure of venture capital investors – a prospect many an internet start-up would struggle with. Feefo’s business model has helped it remain financially sound. ‘Because of the recurring revenue model we have, each month we can see the business going up and up. It’s not like we are having to go back to customers to get them to re-sign or find new business each month to replace last month’s business.’
Less than seven years since its creation Feefo now employs more than 100 people. ‘The challenge is hiring people fast enough,’ says Eames. ‘You don’t want to hire second best, but equally with the discipline we had with our finances we couldn’t hire the most expensive either.’ It might not have helped that Feefo’s HQ is in the small town of Petersfield in the South Downs, but perhaps the lure of the countryside is appealing to developers tired of the grimy streets of Shoreditch and anonymous business parks on the M4 corridor. ‘We’ve had to extend the offices twice. They overlook the cows in the fields and there’s a heath and lake just across the road.’ Now the plan is to expand Feefo’s presence abroad. It already has an office in Boston (Massachusetts not Lincolnshire) and Eames says the business wants to grow across Europe.
‘Now that we’ve got such a neat system, we have the ability to go really creative,’ he adds. ‘We’re investing a lot of time and effort and money in innovations and how Feefo can touch more consumers’ lives wherever they are purchasing. Reviews will always be at the core but we want to help consumers make better purchasing decisions offline.’ For instance if you’re in a shop and want to know if the new power drill on display is any good, whip out your phone and scan the barcode and in the future Feefo could tell you what its reviewers have said. Watch out, FakeReviewer1656, your days are numbered.