The year 1912 brought us the sinking of the Titanic and the birth of the Better Business Bureau.
Both have become part of our vocabulary – the Titanic for hitting an iceberg and the Better Business Bureau for helping businesses avoid hitting one with their customers.
While the non-profit Council of Better Business Bureaus has been around 100 years, the Mississippi affiliate is barely three decades old. But with business growth occurring at a rapid in clip in the state, a watchdog like the Better Business Bureau is more vital than ever, says John O’Hara, CEO of the Better Business Bureau serving Mississippi and former president of Atlanta-based computer network sales company Atlantix Global Systems.
In the BBB role he took on a little more than three months ago, O’Hara is equal parts collaborator with business, a teacher of best practices, a recruiter of new business and non-profit members, and a referee of disputes between consumers and businesses.
But no part of his job is more important to both businesses and the customers they serve than the bureau’s review and grading of businesses. Grades are assigned businesses that are BBB members as well non-members and range from A+ to F.
Fall below a B+ and your BBB membership is subject to revocation, said O’Hara, who directs a staff of five people from the organization’s Brandon headquarters and answers to a volunteer board of directors.
“We also like to give them at least one chance” to bring the grade up before stripping businesses of their BBB membership, he said.
Grading is essentially based on 16 factors, including complaint history, type of business, time in business, licensing and government actions known to the BBB, the honoring of commitments to the BBB and advertising issues.
A non-member business typically ends up with a BBA rating after a complaint is lodged against it. Businesses that respond to complaints go through the assessment process. Those that don’t respond get a failing grade by default, according to O’Hara.
“You don’t want an ‘F’ rating because you didn’t respond to a complaint,” he said. “If you’ve got one complaint against you and you don’t answer the complaint, you are going to drop into the low box.”
Member businesses and non-member businesses are invited to fill out profiles with the BBB. Those are the starting points for obtaining a grade. “We have non-accredited businesses that are ‘A-plus,’ based on a profile review or even a complaint review,” O’Hara said.
In some instances, the business that has been hit with a customer complaint will end up buying a membership, according to O’Hara. They say, “‘If you were fair to me when I wasn’t a member then I kind of do understand the benefits of being a member,’” he said.
On the other hand, he added, “A lot of businesses go, ‘Yeah, you’ll give me a low rating if I don’t pay you [for a membership]. If I pay you I automatically get an A.’
“That’s not true. We couldn’t last 100 years that way.”
The BBB has no promotional role. That’s the job of the chamber of commerce, O’Hara said. “The local chamber keeps the shine on the apple; we keep the worms out.”
BBB membership costs are set on a sliding scale based on the size of the business. “Members get the emblem,” O’Hara said. “They get to advertise with it. It’s a sign of trust. It shows you are open to criticism. That you stand behind what you do, that you are not going to be gone tomorrow.”
The membership fee pays for the accreditation review and monitoring and for support of BBB services to the public.
The Tennessee BBB serves northern Mississippi communities that are part of the metro Memphis area. O’Hara’s office takes in the rest of The Magnolia State and has just under 1,600 member businesses.
Adviser and Watchdog
Serving the consumer is a large part of O’Hara’s workday but advising businesses on how to avoid conflicts with customers is also part of the job. The teaching role is growing in importance as new businesses spring up across the state, O’Hara said.
“On the business side, we have a lot of business growth. When you’re establishing a business and you start off correctly — you know how to do your financials, how to handle your customers, how to do your marketing — it just sets the stage for how you are going to do your business.”
O’Hara says he sees a shifting of shopping preferences back to neighborhood stores and away from big boxes and the like. As this return to the mom-and-pops of the past continues, the small businesses that benefit the most will have sound business practices and an emphasis on fair treatment of customers, he predicted.
Katherine Hutt, spokeswoman for the national BBB office, says the Council of Better Business Bureaus and its affiliates watch for trends in the complaints a business receives and tries to work with the businesses to fix the source of the complaints. “Even if they are handling them to our satisfaction, we ask: ‘Why are we seeing this? Can we help you out there and help you reduce your complaints?’”
The watchdog role includes scrutiny of a member’s advertising. Bogus advertising can cost you your membership. If you’re not a member it can get you a failing grade.
Your size does not get you off the hook, either, O’Hara said.
“WalMart used to make claims of having the lowest prices. They don’t advertise that anymore” since the BBB challenged the retail giant on that claim.
As part of a membership and the grade assigning process, a business or non-profit charity gets an advertising review, according to O’Hara.
In the charity review, “we want to make sure they are following charity standards,” he added.
On the business side, the review seeks to determine whether claims made in the advertising can be substantiated, O’Hara said.
Growing Web Presence
As the Better Business Bureau begins its second century, it’s becoming a force in the Internet Age, with information on businesses and non-profit organizations a mouse click away. “Our Website has gone up 68 percent on views in the last year,” O’Hara said.
“First of all, we’re increasing our visibility. Second, in a down economy people are more careful about spending their money.”
What’s more, the State of Mississippi has done a good job of spreading Internet to rural parts of the state, he said. “This has helped with our hits.”
The database available for search on the bbb.org Website has profiles on 370,000 accredited businesses that range from sole proprietorships to Fortune 10 companies. You can search by business name and category.
“You can get a grade on any of the four million companies we are tracking,” said Hutt, the national spokeswoman, who added the review service is driven more by data than anecdotal information.
Grading the Grader
Each of the 116 affiliates across the United States and Canada is an independent entity licensed by the national council. The council monitors each to ensure compliance with the BBB’s strict standards, according to Hutt.
“The local bureaus are audited and reviewed,” she said. “We have a probationary status if people aren’t performing. We have strict standards for how they operate. We closed and consolidated some bureaus in Canada last year.”