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3 Lessons Entrepreneurs Can Take from Hollywood's War on Rotten Tomatoes No matter how established your company might be, criticism still stings. Instead of plugging your ears and tuning out critics, use reviews as a direct pipeline for feedback.

By Jay Baer Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Laura Cavanaugh | Getty Images

Not long ago, you'd see a label certifying a movie as "fresh" on almost every Blu-ray case, movie poster and trailer. Times have changed, and Hollywood's love affair with Rotten Tomatoes has degraded into an all-out war.

This summer was the worst-attended movie season of the past 25 years, with tentpole films such as "The Dark Tower," "The Mummy" and "King Arthur" tanking at the box office -- and with critics. In the eyes of producers, actors and industry insiders, Rotten Tomatoes is at fault. Hollywood claims the site distills a mountain of reviews into a single metric that encourages audiences to judge a film on face value.

Suddenly, the freshness rating of a film became more important than audience interest in terms of success -- even though data scientists have found that the score doesn't affect the box office. Esteemed Hollywood bigwigs such as Martin Scorsese entered the fray, with the Academy Award-winning director penning a scathing piece for The Hollywood Reporter on the shortcomings of review aggregators.

But the entertainment industry is playing a losing game by shooting the messenger instead of working to create an all-around better product. Hollywood has a few things to learn from its critics, but entrepreneurs can likewise use negative feedback to improve their offerings, refine production processes and strengthen customer experiences.

Related: 11 Entrepreneurs Who Deserve Their Own Hollywood Movies

The weight of reviews

People love reviews. At least 91 percent of consumers read reviews before they make a purchase, according to the annual BrightLocal consumer review survey, and it's not because they can't be bothered to make their own decisions.

The growing demand for reviews is a direct reaction to the staggering number of movies that hit theaters. Your grandfather might have been content to simply head to the local drive-in and see whatever was playing, but moviegoers today have to pick and choose which films they'll see. Plus, consumers also grapple with DVDs and streaming options from the likes of Netflix, Amazon, Hulu and HBO.

The entire situation ties back to Hick's law. Psychologists William Hick and Ray Hyman found that as choices snowball, the time necessary to make a decision increases. Some people would blame a similar phenomenon known as "the paradox of choice," which contends that too many options can make people feel less satisfied.

Without some way to simplify the selection process, consumers would be paralyzed by the seemingly limitless options available. Like it or not, audiences must rely on sites such as Rotten Tomatoes to help them separate what they should see from what they can safely ignore.

Efforts to squash review aggregators come from the same playbook that retailers used a few years ago when trying to eliminate "showrooming," the practice of using a smartphone to comparison shop while inside a brick-and-mortar store. In the case of showrooming, information was never the enemy. In fact, a Harris poll found that 69 percent of consumers actually do the opposite -- they conduct research online before buying an item at a local store.

Retailers that blocked Wi-Fi in their stores have not stood up to the test of time, while those that made information an ally are alive and well. Look no further than Best Buy, which used customer feedback to improve its in-store experience. The once-struggling electronics retailer's stock has posted 34 percent growth this year, according to a Nasdaq article by Zacks Equity Research.

Hollywood's war on Rotten Tomatoes is a similar situation. Rather than struggle to bury reviews, movie industry executives should invest that energy into making films worthy of consumers' time and money.

Related: E-commerce Is Growing, But Customers Still Prefer Shopping in Stores

Capitalizing on criticism

No matter how established your company might be, criticism still stings. But instead of plugging your ears and tuning out critics, it's important to use reviews as a direct pipeline for feedback. Here are a few ways to improve your company using customer feedback:

Declare a cease-fire against critics.

If the reviews for your product or service are resoundingly bad, it's probably not the fault of the reviewer. Although the natural inclination is to vigorously defend your creation, it often comes across as sour grapes. That perception can do irreparable damage to your reputation. Besides, high marks only tell you what you should already know about your business. You actually want feedback on aspects you can improve, which is exactly what negative reviews offer.

Just remember that consumers see reviews differently. The aforementioned BrightLocal survey found that 91 percent of consumers actively read online reviews, but they don't always believe what they're seeing. While conducting research for my most recent book, "Hug Your Haters," I found that two-thirds of consumers are more apt to trust a company when it has a mixture of positive and negative reviews. It might not feel like it, but those harsh reviews are doing you a favor.

Crunch the numbers (and use them).

Before its recent cancellation, "House of Cards" was a hit for Netflix. That success wasn't a coincidence. Netflix mined big data to create a show based on consumer behavior patterns, matching fans of director David Fincher with a cast that clicked with Netflix users.

Every review in the Rotten Tomatoes database offers raw material that Hollywood can use to change how it makes movies. Products and services are no different. Each review or complaint provides you with an opportunity to glean insights from customers. It all comes down to separating the review from the rating.

One-star ratings will certainly hurt your overall rank, but that isn't the point. Mine insights from those bad reviews, and find ways to aggregate the feedback. You might spot trends in consumer feedback that can turn into action steps for your business. If numerous people complain about your response rate, for example, that should be a sign that you need to fix a problem. While it's easy to see a score and call it a day, leverage all the information available to make reviews work for you.

Related: What Netflix Just Taught Entrepreneurs About Mitigating a PR Nightmare

Run toward reviews instead of away from them.

Hollywood contends that Rotten Tomatoes is unfair. The film industry works under the assumption that an aggregated score doesn't account for the millions of moviegoers who love their creations. If that's the truth, they should encourage audiences to leave reviews on the way out the door.

Entrepreneurs encounter this situation after every sale. Think back to the last time you bought something online. You probably got an email requesting feedback, right? Businesses want consumers to share their experiences because it can validate a purchase -- the same BrightLocal survey found that 84 percent of people trust online reviews as much as recommendations from family and friends.

Provide ways for customers to instantly leave reviews. Include a QR code directly on your packaging. Have retailers ask customers to leave reviews when they complete a purchase. If you feel like customers are giving overwhelmingly positive (or negative) reviews, find ways to expand your pool of reviewers.

No matter what you do, someone will probably complain. Take your lumps, and learn from what your critics are saying -- it can only improve your products or services.

Jay Baer

Author, Speaker and Founder of Convince & Convert

Jay Baer is an author, speaker and the founder of Convince & Convert. 

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