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The Good, the Bad and the Downright Ugly Truths About Online Reviews
Posted on October 8th 2013
This past week, New York’s Attorney General announced that it would be fining 19 businesses over $350,000 each for posting fake positive reviews to the popular online review site, Yelp. The businesses, which ranged anywhere from strip clubs to a laser hair removal service, would pay freelance writers up to $10 per positive review, even though none of them had ever used their products or service. This problem isn’t just exclusive to New York either. Today, Yelp estimates that up to 25% of all reviews are fraudulent compared to just 5% in 2006.
As the use of online reviews has grown over the years, so has its importance to businesses. In a recent survey, researchers found that 87% of consumers say positive reviews online have reinforced their decision to purchase a product or service. On the flipside, 80% of consumers have also changed their mind about purchases based on negative information they found online. With online reviews having such a major impact, it’s no wonder businesses are concerned with what’s being said about them online. Warren Buffett described the situation perfectly when he said, “it takes 20 years to build a reputation and 5 minutes to ruin it.”
With that being said, through the rest of this post we’ll walk you through some of the most popular online review websites, the impact those sites have on businesses, and what business owners can do to protect and build their reputation.
Founded in 2004 to connect consumers in San Francisco with local businesses, Yelp has since grown to become the home of over 42 million user reviews and over 100 million visitors per month. The site has even expanded internationally to more than 11 different countries, including the UK, Australia, Canada, Brazil, and Germany to name a few. On Yelp, reviews range across all industries from restaurants, to doctors offices, and even to tire shops. To post a review, users simply login to their Yelp account, search for a business, and write a short review, complete with a 5-star rating scale. Reviews can be written by anyone with a Yelp account (a.k.a. “yelpers”), and the more reviews a user makes, the more credibility they earn. To monitor fake reviews, the site has its very own review filter that hides posts it deems fraudulent. However, this tool has been known to be imperfect and sometimes hides legitimate reviews while keeping fake ones visible.
Google+ Local is a review system used with businesses listed on Google Maps through Google’s Places for Businesses. Confused? In a nutshell, when searching for a business using Google Maps, users are able to click on a business’ map icon and read/write user reviews, read Zagat summaries, and connect to the business’ Google+ page. To post a review, users login to their Google+ account, click on the map icon, and go to the business’ reviews to leave their own. Like Yelp, Google+ Local reviews also have a spam/fraudulent review filter system, but like Yelp again, it isn’t very foolproof.
Compared to the other 2 sites on this list, Angie’s List is much different. As opposed to reviewing restaurants and retailers, Angie’s List focuses solely on consumer reviews of service companies. However, to access reviews users have to pay a small subscription fee. In return, Angie’s List offers the guarantee that all reviews are personally checked for fraudulency before being posted (hence the slogan, “reviews you can trust”). In the U.S. and Canada, Angie’s List has over 1.5 million subscribers who contribute about 40,000 reviews each month.
As I mentioned earlier, consumers are heavily influenced by the reviews they read online. In fact, 85% of U.S. consumers read online reviews for local businesses, and 50% of those consumers are more likely to use those same businesses after reading positive reviews. For businesses with a healthy online reputation, this means that online reviews can help generate more foot traffic and revenue. On the flipside, however, businesses with a poor online reputation will surely see their sales suffer. According to one Harvard Business School study, a one-star rating increase on Yelp lead to a 5-9% increase in revenue. That’s thousands of dollars potentially lost or gained due to free consumer reviews!
So, now comes the big question: What can you do to help grow, maintain, or fix your business’ online reputation? (other than being the best damn business out there, of course)
For starters, business owners need to know where their customers are writing reviews. While only a small percentage of your customer base will write a review, a much larger percentage will be impacted by it. Find out which online review sites your consumers are using and monitor what they’re saying. From here, you can personally respond and demonstrate your appreciation of any feedback. Remember, your response is a direct reflection of your business’ customer service so it’s important that ALL responses are handled in a professional manner.
Now that you’ve found out where your consumers are leaving reviews, it’s important that you take charge and start managing your reputation there. The best, most effective way to start getting positive reviews for your business is to simply ask satisfied customers for them. If you notice a customer really enjoyed their experience, take a couple seconds and ask them if they wouldn’t mind sharing it online. It doesn’t take much effort, and most will be happy to do so.
Since you can’t monitor every customer interaction and ask for reviews, it’s important that your customers know where they can leave reviews online. Once a customer completes a purchase, send a follow-up email asking them to share their opinions. Do you have links to other social networks in your email signature? Include one for your business’ review page. If most of your selling is done face-to-face, not online, then set up a small display at the point of purchase letting customers know where they can leave feedback online. You can also include a note on your receipts and invoices.
Apart from monitoring engagement, responding to reviews, and encouraging customers to leave feedback, the best way to earn positive reviews (and avoid negative ones) is to simply show your customers that you care about them. If it’s in your brand’s culture to go the extra mile for your customers, you’ll be surprised at the extra miles they’ll go for you. For example, did you know 95% of unhappy customers say they’ll return to a business if their issue is solved quickly and efficiently? However, if the unresolved issue leads to the customer leaving a negative review, there’s a 90% chance they will NEVER do business with you again (let alone the new customers lost due to reading that negative review).
That being said, with online review sites like Yelp, Google+, and Angie’s List now established as “go-to” sources for information about businesses and their products/services, protecting your reputation online can be crucial to the success of your business. Keep these tips in mind as you work towards that 5-star rating and both your customers and bottom line will thank you for it.