The watchdog group is an effective resource for consumers, according to new research.
March 8, 2006--Small-business owners who don't make customer service a priority could be in for a rude awakening, according to a nationwide examination of the Better Business Bureau.
As part of a five-month study, Marquette University marketing professor Dennis Garrett found that contrary to previous studies, the BBB provides valuable information to consumers who seek to do business with local companies.
The primary objective of the study, which is the first of its kind, was to analyze the overall value of information contained in the BBB company-reliability reports.
Traditionally, the most common critiques of the BBB have included the fact that only a small percentage of member companies had reports, that reports don't contain enough information, and that the BBB is biased toward member companies.
"Unfortunately a lot of consumers erroneously believe that the Better Business Bureau exists for the benefit of businesses instead of consumers," said Garrett, whose study will be published in the April issue of The Journal of Consumer Affairs.
For his study, Garrett used a random sampling of the 115 local BBBs nationwide and focused on three of the most-requested industries -- auto dealers, movers, and roofers. The study showed that the BBB had reliability reports for more than 69% of auto dealers, 58% of movers, and 43% of roofers.
The BBB typically generates a reliability report on a company if:
The business decides to become a BBB member
A BBB office receives a complaint about a business
A number of consumers contact a BBB office seeking a reliability report on the same business
Research found that most of the reports on these industries contained enough information to prove that the three main criticisms about the BBB are unwarranted.
Garrett's research also found that there wasn't any significant difference between the number of complaints disclosed for businesses that were BBB members and businesses that were not. Garrett noted, however, that the issue of preferential treatment is still open for further study.
"We find [this study] very helpful," said Sheila Adkins, spokeswoman for the BBB, who urges readers to keep in mind that the research for this study was collected over a year ago. "He [Garrett] is right on track with where we are going and what we are doing."
"I hope [the study] stimulates consumer usage," Garrett said. In 2003, 48.8 million consumers requested company reliability reports, up 10 million from the previous year.