Better Business Bureaus have been around since 1912 and the familiar BBB torch logo is ingrained in the minds of many consumers as a sign that any company displaying it can be trusted. What many don’t take time to find out is exactly how a company comes to get a BBB designation and what it means.
John Calvano, owner of Joy’s Johns in Niles, Mich., says he considers BBB accreditation an extension of good customer service.
“It just brings peace of mind to customers when they see that symbol,” Calvano says. “They know you are in good standing with the Better Business Bureau so you must be doing something right.”
A COST OF DOING BUSINESS?
Joy’s Johns has been accredited by the BBB for more than four years and uses the logo on its Web site and on brochures.
“It’s also posted on a wall in the office so people see it when they come in to look at restrooms for events,” Calvano says. “I think it’s worth the cost.”
And therein lies the rub. Consumers might not realize it, but businesses pay to be BBB accredited. And they pay a lot, says Sue Miller of Dale Miller & Sons, a septic service and portable restroom company based in Fawn Grove, Pa.
“It’s up to $500 a year for us,” Miller says. “But I feel sort of pressured into paying, because they play businesses against each other saying if your competitors are accredited and you’re not, customers might think your competitors are more reliable.”
BBBs are financially supported almost entirely by member dues, which range from $200 to $10,000 a year depending on the size and type of a business and where it’s located. That’s because there is not just one Better Business Bureau — there are 128 regional BBBs in the U.S. and Canada, each run separately. They must, however, meet international BBB requirements, which are continually monitored and enforced by the Council of Better Business Bureaus.
MAKING THE GRADE
Better Business Bureaus evaluate and award ratings or letter grades to all kinds of businesses, and being accredited doesn’t guarantee a business gets an A+. Non-accredited businesses with good customer service records often earn excellent grades with BBB. This is contrary to the mistaken notion some consumers have that being non-accredited means a business was rejected by a BBB. They may not realize that application for accreditation is voluntary, and some business owners don’t spend the time and money to apply.
ACCREDITATION REQUIREMENTS
To qualify for BBB accreditation (called membership until 2007), a company must be in business in the local area for at least a year. The next step is to fill out an application. Then a BBB representative might visit the prospective business to make sure it meets the organization’s standards.
The most important factor in BBB accreditation is a company’s record of responding to customer complaints. A company must show it responds promptly to complaints as soon as they are received from the local BBB and that it does everything possible to resolve complaints through good business practices. Many Better Business Bureaus also require that accredited companies agree to binding arbitration in cases where a complaint cannot be resolved through normal procedures.
Once the application is accepted, businesses pay membership dues and promise to uphold what is known as the BBB Standards for Trust. These eight standards include advertising honestly, honoring promises, and generally operating with integrity.
CONFLICT OF INTEREST?
There are nearly 400,000 accredited businesses in North America agreeing to uphold BBB standards and resolve complaints. But the value of BBBs depends on their neutrality and fairness to all parties — not just the 400,000 “members.”
There are critics who claim it’s impossible for BBBs to remain neutral simply because of where their funds come from. Skeptics question whether BBBs can serve accredited businesses, consumers and non-accredited businesses equally or if being financially supported by members is a conflict of interest.
Miller says when her company had a customer who refused to pay, she didn’t get much help from the BBB, despite being an accredited business. But BBBs usually say up front they don’t get involved in collections disputes. They only step in and mediate if a customer files a complaint with them about a company. Again, they claim they won’t show any favoritism to accredited members and they would mediate a dispute over a claim filed with them by a consumer about an unaccredited business as well.
So is the annual fee buying your business anything besides a torch logo to hang in the window and put in your ads? Maybe not. But maybe that’s enough to have customers choose you over a competitor.
Like any marketing expense, you have to weigh the cost of BBB dues against the response you get from customers, and that can be hard to evaluate. Calvano believes it’s worth it; Miller is still trying to decide.
It helps to think of BBBs primarily as an advocate for consumers; not like a Chamber of Commerce, which primarily advocates for businesses. Then you might want to take the time to ask customers if the BBB torch means anything to them and if it would be a factor in them choosing to do business with one company over another.
Feel free to share your BBB experiences with me at thewordhouse@ameritech.net.
