Thanks to the internet and the rise of business reviews sites, dealing with customers has arguably never been more complicated.

Never before has it been more important to cultivate strong customer relationships and to find ways to parlay them into online reviews that, in some cases, can be powerful drivers of business.

Many businesses have become quite adept at doing this using a variety of legitimate and not-so-legitimate tactics. But when it comes to unhappy customers, there are often few easy answers once that unhappiness has been manifested as a scathing review on a site like Yelp. Such reviews can scar a company, leading potential customers to continue their search for a service provider.

So when a woman named Jane Perez left negative reviews on Yelp and Angie’s List for Dietz Development — reviews that accused the contractor of stealing valuables from her home — Christopher Dietz was faced with a conundrum: let the reviews and allegation slide, and hope for the best, or defend his business.

Dietz chose to defend himself and took Perez to court, slapping her with a $750,000 defamation lawsuit. Last week, a judge issued a preliminary injunction against Perez. Despite her suspicions, there was no evidence that Dietz and/or his employees stole from her house, and Dietz had never been charged with theft, so the judge ordered her to alter her review.

Blowback

According to Dietz, the negative review by Perez has cost him at least $300,000 in business. From this perspective, it’s not hard to understand why he decided to sue his former customer. But that isn’t the end of the story. As noted by The Verge’s Chris Welch, non-customers have apparently been targeting the Yelp page of Dietz Development, slamming it for its lawsuit.

One such review, written by someone named Heather A., states in part:

I cannot speak to the veracity of the Perez review. Whether or not her allegations were true, I believe that addressing a bad review in the courts is an example of terrible customer service. If the company performs well, their satisfied customers and good Yelp reviews will soon outweigh one negative review.

Theory versus reality

In theory, Heather A’s argument is a reasonable one. While a single negative review can be harmful, if there are far more positive than negative reviews, the ill effects of the negative review can probably be mitigated.

In reality, however, it’s not always that simple. A restaurant owner looking at a negative review over bad experience with a waiter probably isn’t going to lose any sleep. Some types of businesses, like restaurants, often receive lots of reviews on a regular basis, and consumers of those reviews know that sometimes the rude waiter is really a product of a rude customer. So one bad review isn’t necessarily a back-breaker.

But what about businesses like those run by Christopher Dietz? They don’t have nearly as many customers, and thus generate fewer reviews. The stakes are higher (he is working on somebody’s home after all) and an accusation like the one leveled by Jane Perez (that he or his employees stole from her home) is a serious one that isn’t likely to be so easily dismissed by prospective customers, even in the presence of a greater number of positive reviews. That makes it much more difficult to let an untruth slide.

The verdict

So is it ever a good idea to sue over an online review? In most cases, no. But online reviews are a two-way street. When a business wrongs a customer, it can expect to face the consequences in the court of online public opinion. But when a customer wrongs a business, it too shouldn’t expect the act to be without consequence.

When that act appears to be defamation — one that has legitimately cost substantial earnings – the unfortunate news for business owners is that the option of doing nothing may be just as harmful as doing the unthinkable.