The Better Business Bureau is an organization that was established decades ago to serve as a sort of middleman between businesses and consumers. Once issues arose, or disputes erupted, the BBB offered at least one way that consumers could potentially address the issue and the business owners could then respond.
In 1912, the “National Vigilance Committee” was established in Dallas to prevent people falling prey to false advertising claims made by manufacturers and distributors of various medical nostrums, whose claims of efficacy and safety were not well monitored at the time.
This National Vigilance Committee, whose mandate was based on the “Ten Commandments of Advertising” by Samuel Dobbs of Coca Cola, soon paved way to the opening of the first “Better Business Bureau,” in Minneapolis Minnesota, followed by affiliates in Cleveland and Salt Lake City in 1913.
Then in 1915, the organization’s history showed that the top industry for complaints was, generically, “Door – to – Door Sales,” with over 1.4 million responses from the organization even a hundred years ago. Note that the historic perception of the BBB has always been that it is a sort of official agency charged with protecting consumers from the most egregious marketing and sales practices.
However, that has not always remained the case. Instead of being a government agency, the Better Business Bureau is structured as a 501© (6) non – profit, with over $215,000,000 a year in revenue. They offer services that include providing reviews, business accreditation, and dispute resolution services.
In the United States, there are over 110 Better Business Bureaus, controlled by the Council of the Better Business Bureau (CBBB), headquartered in Arlington, Virginia. These local BBB’s are independently owned, and governed by their own board of directors (who may not know who the local owners are), and are supposed to meet International standards, as monitored by the CBBB.
Nonetheless, revenues for each BBB are primarily funded by its accredited businesses, the owners of which often also serve on its board. Revenues are also generated from selling memberships to businesses. As a non – profit the BBB does not have to declare its revenues.
The financial performance of each BBB entity therefore depends on its ability to sell memberships, and the integrity and capability of its owners, staff, and board. According to reports, the fairly wide latitude that each BBB has to self – regulate can lead to regional or local discrepancies in effectiveness of services, and even ethical standards, as witnessed by the dismissal of the Southland BBB.
Pros of Joining Better Business Bureau
Coupled with the services offered, Better Business Bureau membership offers many other advantages including;
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In the United States, reports have proven that consumers put faith in reviews, and they give credence to ratings. Since the BBB has been around for so long, has established itself as credible as far as its rating system, consumers in the United States tend to believe what they say about a business.
Note that once you get accredited, you can put the BBB logo on your website—again, this is another layer of credibility and trustworthiness for your company, as people associate this label with a positive experience.
2. Dispute Resolution
The Better Business Bureau is also used as a means by customers to pursue grievances against member businesses. Even though some businesses might see this as a disadvantage to Better Business Bureau membership, the dispute resolution mechanisms available to members can actually be a more cost effective way to handle disputes than alternatives, such as legal action on the part of the customer.
3. Networking Opportunities
As a reputable organization with members throughout the local and national business communities, the Better Business Bureau extols itself as an excellent networking opportunity for its members.
A lot of small businesses particularly strive to make worthwhile business connections with potential customers, suppliers and collaborators. However, by being part of an organization strategically established to meet the needs of the business community, small businesses can make those connections, and increase and improve their business.
4. Consumer Visibility
Note that another important benefit that BBB accreditation offers your business is a potential increase in exposure. Once you’ve been approved, you’ll be permitted to hang the Better Business Bureau logo out front and inside of your business.
This gives customers that are familiar with the logo instant assurance that your business has met the rigorous standards that the BBB sets. In addition, the BBB’s internet database will also give customers a way to find you that they wouldn’t otherwise have. They can search for your business directly or come across you when looking for local businesses in your industry.
Cons of Joining Better Business Bureau
There are also some drawbacks that could leave you wondering whether it is worth the price of membership. These issues include:
i. Decreasing Exposure of BBB
It is great that you can display your accreditation and be featured on their website; the increased visibility only works if people know what the BBB is. Also, although it is true that consumers now trust online review sites less, they’re also starting to do their due diligence themselves.
And while the BBB will point to the millions of site visitors and hundreds of millions in transactions they claim to have influenced, many small business owners question whether enough people know to check with them, or even care enough to do so.
In this modern technological era, doing a simple Google research will more or less provide enough in five minutes to create an informed opinion of a business, so many consumers simply don’t need to go to the Better Business Bureau.
ii. Registration Fees
Have it in mind that the cost of joining the BBB isn’t exactly cheap. Although it tends to depend on the size of your business, it could be hundreds, or quite possibly in the thousands. The BBB is a non – profit which means money from registration is primarily how they stay operational. With membership, you do have some preference in the event of disputes. It really is up to you to consider whether or not the cost of membership and accreditation is worth it.
iii. Yearly Dues
Another crucial issue business owners have with the Better Business Bureau is the annual cost. As a non – profit organization, they use dues paid by owners to fund their operations and pay their employees.
This entails spending hundreds or even thousands of dollars a year to be a member, depending on the size of your company. One painful aspect also is that non- members can have negative reviews against them, and preference in mediation will be given to those who pay dues.
This means it could be harder to improve your business’s image simply because you’re not BBB accredited. It is up to you to decide whether the benefits to your unique situation outweigh paying money that could go back into growing your company.
BBBs are private, self – regulatory agencies that seek the voluntary cooperation of businesses. When illegal practices are uncovered and the business refuses to cooperate with the BBB, the matter is referred to the appropriate law enforcement agency.
Also, BBBs have close working relationships with governmental agencies such as the Federal Trade Commission, consumer protection agencies, and the State Attorneys General. Either way, keep in mind that each BBB is a different entity, and ensure you do your own “Buyer Beware” due diligence when investigating the prospective value of membership in your local BBB affiliate.