The degree to which online reviews matter for your business cannot be over-emphasized.
Sites like Amazon have made all of us used to reading reviews before we make a purchase. This is how we make an informed decision about how to spend our money. If 83% of the 4,235 people who reviewed a garlic press give it five stars, then it must be a quality product.
What has happened is that we now expect this level of feedback from our peers for everything. We trust other people more than we trust a brand or a company, and so whether we’re buying new shoes, choosing a doctor, or deciding where to get dinner, we look for what other people have to say.
Just How Much Do They Matter?
Nearly everyone reads reviews of local businesses before they buy from them. The percentage of people is somewhere between 82 and 97 percent. You read that correctly. The conservative estimate is 82 percent. This isn’t just looking at Millennials or Gen Z, either. It includes all ages of consumers.
Encouraging and keeping tabs on your online reviews needs to be a priority. It’s something that requires ongoing attention as you need more than just a few reviews to be successful, and you need to make sure you have recent reviews as well. Tending to your online reputation is something that will take some time and thought, but it is definitely worth it.
Ninety percent of customers consider reviews to be the most crucial part of their purchase decision. Buyers read an average of 10 online reviews before they feel they can trust a company, and shoppers in all age ranges expect an average of 112 reviews per product. Old reviews are not nearly as impactful as recent ones. Forty-eight percent of consumers only pay attention to reviews that were written in the previous two-week time period.
Online reviews don’t just help potential customers make decisions—they help people find you in the first place. Let’s say you Google “Italian restaurant.” The first thing you see is three restaurants listed. Go ahead and try it if you’re not sure what I’m talking about.
Of course, there are more than three Italian restaurants near you, but these top three, known as the Google Local Three-Pack, come up first. You’ll have to click on “more places” to see the rest of the choices. Gaining this coveted position depends on a number of factors, but “review signals,” including the quantity, velocity, and diversity of online reviews, make up 15 percent of the ranking factors.
So, reviews help people find you, they are used by customers to decide whether to choose you, but how much do they really matter to your bottom line? I’m sure you’re not surprised to learn by now that it is quite a bit. The purchase likelihood of a product with five reviews is 270 percent greater than for a product with none. Businesses with more than nine fresh reviews (from within the previous 90 days) earn 52% more than average. Businesses with more than 25 fresh reviews earn 108% more than average.
Not surprisingly, better reviews result in higher profit as well. Every one-star increase in your Yelp rating, for example, leads to a five to nine percent increase in revenue. Also, customers spend an average of 31 percent more on businesses that have excellent reviews. Your online reputation directly impacts your success.
Which Review Sites Should Be Your Focus?
There could be review sites that pertain to your specific market, but overall, Google, Yelp, and Facebook are considered the most important. Sixty-three percent of consumers visit Google to check for reviews of a business, 45 percent check Yelp, and 23 percent check Facebook.
Google is currently the fastest-growing reviews platform, while Yelp still leads in restaurant reviews. While Facebook generally comes in third, it affects more than 50 percent of consumers’ purchase decisions. Also, 78 percent of people have discovered retail products to buy via Facebook. Remember, people trust their friends and peers more than companies, so social media has become an important platform for reviews.
How Can Attention to Online Reviews Put You Ahead?
While most of us have been hearing about the importance of online reviews and how cultivating them can help us succeed, not everyone is taking advantage of them. In fact, only 44 percent of local businesses have claimed their free Google My Business listing. Further, only 33 percent have claimed their free listing on Yelp. This means that by making online reviews a focus, you’ll put yourself ahead of your competitors.
It must be difficult to get customers to write reviews though, right? Wrong. In fact, 76 percent of consumers that are asked to leave a review go on to write one. Despite what you might be worrying about, good ratings are more common than negative ones. The average Google Reviews star rating for a local business is 4.42.
Even if you do get a negative review, you can actually use it to your advantage. A Harvard Business Review study found that when hotel management responded to negative TripAdvisor reviews, their ratings actually improved. Further analysis found that a hotel manager’s response, whether to a positive or negative review, resulted in higher ratings. Not only do higher ratings attract more customers, but a Cornell University study found that customers are likely to spend three percent more on businesses with good reviews
Today people are relying more and more on individuals to help them rather than institutions. We get makeup tutorials not at the makeup counter, but from YouTubers. We ask our Twitter followers for book recommendations rather than looking at a magazine list. And we consult our friends and peers to find out what they thought of that garlic press rather than reading the seller’s description.
It’s time to pay attention to your online reviews, because your customers already are.
