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How a Better Business Bureau (BBB) can help BBB accredited small business members.


The origin of the Better Business Bureau (BBB) dates back to 1912 when "Vigilance Committees" of Advertising Clubs were established to correct abuses in advertising. The BBB's original function has broadened to monitor other activities in the marketplace and business performance. Today there are 137 Better Business Bureaus in the United States. (Council of Better Business Bureaus, n.d.). BBB Accredited Businesses are companies that meet the standards for accreditation. Funding to support programs, activities, and staff is provided by member dues

The BBB provides many services for the consumer. Yet, the Bureau provides useful services to its members. The purpose of this paper is to illustrate how a BBB Accredited member small business owner can use the services of the Bureau to benefit the firm and contribute to its profitability.


First let us consider some of the services the BBB provides for consumers. The BBB collects and reports information to help prospective buyers make informed buying decisions. Specifically, the BBB develops reports about companies. These are reports available to the public and are intended to provide an informative, accurate, and unbiased summary about the business. BBB reports are available to the public by telephone, in writing, and the BBB's website. The reports are neutral as the agency does not recommend businesses (BOC Bureau Operations, 2007).

Bureau websites offer online resources, educational tools for consumers, and video content. Each BBB offers a specific assortment of educational resources tailored to the needs of the area. For example, one BBB executive director speaks to business students at local colleges about the services of the BBB.

The BBB helps consumers indirectly by monitoring advertising and selling practices and seeking corrections and improvements where appropriate, providing consumer information to news media such as radio, television, and other print media, and alerting consumers about fraudulent and harmful practices in the local community and cooperating with appropriate law enforcement agencies. (Council of Better Business Bureaus, n.d.)

The BBB can help resolve buyer/seller complaints against businesses by means of conciliation, mediation, or arbitration. Conciliation is conducted by the BBB staff. Mediation occurs with a professionally trained mediator who works with both parties guides them to working out a mutually agreed solution. Arbitration is an informal process in which a neutral third party decides the dispute. (Council of Better Business Bureaus, 2003).


Consumers can check with the BBB about prospective sellers. Small business owners can do the same. Young (1994) found that 81 percent of the BBB members surveyed used the BBB to check the reliability of unknown companies before doing business with them. Also, 80 percent of members called on the BBB to check out charitable organizations before they made a contribution or donation. Some 68 percent belonged to the BBB because the BBB warned members of scams (Young, 1994).

Arbitration is one way a marketplace dispute between a BBB member and a customer may be resolved. Young (1994) found that 28 percent of BBB members belonged to a BBB because of the opportunity for complaint resolution. The BBB provides at no charge to the Accredited member or consumer a professionally trained arbitrator who will listen to both sides, weigh the evidence and make a decision about the dispute. Most of the BBB arbitrators are attorneys who volunteer their time to do arbitrations.

The decision may order an action to be performed, money to be paid, or a combination of those remedies. The arbitrator may award all or part of what is sought or may decide to award no payment or performance at all. Decisions may be final or interim. If a final decision is given, the arbitrator has no further authority over the decision unless a valid request is made pursuant to certain rules. An interim decision may be written when the decision requires that some action be taken (Council of Better Business Bureaus, 2003). Arbitration offers several advantages to the BBB member who uses it. Legal actions by the customer may be eliminated. In addition, there are no court or attorney's fees. The entire process takes only thirty days or less.

Total Quality Management (TQM) is a philosophy of management which suggests that a business can improve its business operations and its relationship with its customers. Customer complaints, comments, and telephone calls suggest internal problems resulting in poor products and/or service (Young, 1994). The next step is to investigate the reasons for those complaints and then to correct the problems in the quality of product or service. For example, complaints about late deliveries may be due to new drivers who are not familiar with the area or poor scheduling of deliveries.


The Council of Better Business Bureaus has implemented a new BBB rating system, one which uses an A plus through F letter grade scale. Previously, the BBB awarded member businesses either a "satisfactory" or "unsatisfactory" grade which did not provide as much insight as a letter grade.

The rating system relies on a proprietary formula that takes into account 16 factors based on objective data and actual incidences of a business's behavior that has been verified and evaluated by BBB professionals. Factors include such items as the type of business and its business model, how long the business has been operating, total volume of complaints filed against the business, an overall complaint analysis, and government actions against the business. Businesses are awarded points based on the 16 factors which are weighted according to the BBB's assessment of the importance of each factor. The points are calculated using a formula and a letter grade is awarded on the point range the businesses fall into. Complaint history drives a business's letter grade score. A business must have and maintain a B or higher grade to remain a BBB accredited business. (Council of Better Business Bureaus, 2008).

Accreditation in the BBB is important to the small business owner. It means more business or sales. The findings of a survey conducted by Princeton Survey Research Associates International found that seven in ten consumers indicated that knowing a firm is a BBB Accredited business makes them more likely to do business with it. (Princeton Survey Research, 2007).

Today's consumers want confidence in their buying decisions. Evaluating trustworthiness of a business is one of the first steps in making a purchase. The BBB's Start with Trust promotion campaign points out to the consumer that there are measurable and accountable standards of trust. Those Standards of Trust are: Build Trust, advertise honestly, tell the truth, be transparent, honor promises, be responsive, safeguard privacy, and embody integrity.

BBB accredited members are provided with a new logo and tagline. Also, the BBB website has been redesigned. There is a consistent nationwide look and feel. Faster and more direct access to information is available through a new global site search process. Instant update features will push information to users when and where they want it, to help consumers find BBB accredited businesses quickly and easily (Council of Better Business Bureaus, BBB Brand, n.d.).

Accredited members may use the BBB Accredited Business Seal in promotion. They may advertise using the Accredited Business Seal in all media allowed under the program. The member is encouraged to use the seal in newspaper ads, on television, fliers, etc. A variation of the BBB seal is available for use in yellow page/directory advertising only. There is also a special seal and program for a business to advertised BBB Accreditation on their website.

The BBB Wise Give Alliance ( helps business and consumers make informed decisions and advances high standards of conduct among organizations that solicit contributions from the public. There are 20 "Standards for Charity Accountability" that are applied when the Alliance reviews a charity.

The BBB Wise Giving Alliance produces reports on nationally soliciting charitable organizations. The Alliance does not rank charities but rather seeks to assist donors in making informed judgments about charities soliciting their support.


BBB services to Accredited member firms include the opportunity to evaluate prospective vendors. No-cost arbitration services and the opportunity to analyze complaints to determine weaknesses in internal operations are benefits.

Perhaps the most valuable aid to helping the BBB members is the Accreditation program. Today, consumers want trust in the businesses they are buying from. For over 100 years the consumer and businesses have recognized the BBB as the "go to" organization for marketplace trust issues. The Accreditation program is a new way of providing that trust. Some 70 percent of consumers say they will buy from a BBB Accredited company. Similarly, a study by the Shapiro Group (2007) found that when a small business is a member of a local chamber of commerce, some 63 percent of the respondents said they are more likely to purchase goods or services from that business in the future. The key here is for the BBB member to make customers and potential customers aware of his/her being an Accredited BBB member. A plaque in the front of the store or use of the logos provided by the BBB national office are ways to promote one's Accreditation.

To maintain its BBB Accreditation status small business management must maintain a high standard of quality product and service. Stress must be put upon the proper hiring, training, motivation, and evaluation of employees. Quality control must be emphasized in the production of goods and services.

Trust in the buyer-seller relationship is more important than ever in the marketplace. The BBB's Accredited Business Market seal is an indication of that trust, and potential sales for the BBB Accredited member.


BOC-Bureau Operations Committee Standard Reporting Language Policy. (2007). Better Business Bureau reliability reports for business and charities. Author.

Council of Better Business Bureaus. (2008, November 14). Letter-grade ratings systems frequently asked question (FAQs). Report. Author.

Council of Better Business Bureaus, (2003). Arbitration Binding. Arlington: VA. Council of Better Business Bureaus.

Council of Better Business Bureaus. (n.d.). What is a better business bureau? Better Business Bureau Consumer Information Series. [Brochure]. Council of Better Business Bureaus.

Council of Better Business Bureaus. (n.d.). BBB Brand-Frequently asked questions (FAQ). (Brochure). Author.

Princeton Survey Research Associates International, (2007). The Better Business Bureau's accreditation survey of consumers: A summary of major findings. Council of Better Business Bureaus.

The Shapiro Group. (2007). The real value of joining a local chamber of commerce: A research study. Atlanta, GA: Author.

Young, M. (1994). The Better Business Bureau: A neglected tool toward developing quality management. In R. S. Rubin (Ed.). Proceedings of the 18 National Small Business Consulting Conference, Small Business Institute Directors' Association, (pp. 71-75). San Antonio, TX.

Kenneth J. Lacho, The University of New Orleans

Richard Mitchell, Better Business Bureau of New Orleans
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Title Annotation:Better Business Bureaus
Author:Lacho, Kenneth J.; Mitchell, Richard
Publication:Entrepreneurial Executive
Geographic Code:1USA
Date:Jan 1, 2010
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