How Much Are Online Reviews Actually Worth?
While many business owners often feel overwhelmed by online reviews, small businesses need them to survive. In fact, 92% of consumers read online reviews before making purchases, and they trust those reviews as much as they trust recommendations from friends and family. Consumers are also more likely to choose a small business if they read positive reviews about that business.
Reviews can also boost sales and SEO, leading to a higher search ranking, since reviews are social proof (social proof is the idea that if others like your business then it's safe for me to like it - everyone else is doing it, right?).
And consumers take reviews very, very seriously. Check out these stats from Nielsen:
- 82% of consumers go to review sites because they want to buy a service or product
- 89% make a purchase within a week of visiting review sites and 29% will do so within a day
So if someone is reading your reviews, they probably want to make a purchase, but where do consumers leave and read reviews?
Well, that depends where your business is listed.
There are many review sites that your business may be listed on (without even knowing it) and the most important review platform varies by business and industry.
While you probably don't have the time to devote to in-depth research about every single review site out there, you can search Google for your industry + reviews + location. For instance, if your business is a restaurant in Columbus, Ohio, search "restaurant reviews Columbus OH".
The results of this search will show you which sites your competitors use, so make sure your business is there too.
How much are reviews worth in general?
Not that I'd recommend raising prices just because you got a few good reviews, but a Cornell University study found that a hotel can raise its prices by about eleven percent for every one-point increase in its star rating (without losing customers).
Consumers are likely to spend 31% more on a business with excellent reviews, and a whopping 92% will use a local business if it has at least a four-star rating.
The big contenders for reviews, though, are Google and Yelp. So let's look at how much reviews are worth on each platform.
While both are important for small businesses, studies say Google is more important for reviews than Yelp. Google is the biggest search engine in the world (accounting for around 64% of all searches worldwide) and when potential customers search Google for local businesses, reviews and star ratings show up.
Google was also found to be the most important review site for purchase decisions, and consumers are 38% more likely to visit and 29% more likely to consider buying from a business with a complete Google My Business page.
You should probably know that, while Google used to include reviews from review sites all over the web, its algorithm recently changed. Now when someone Googles your business, they'll see Google reviews first. Reviews from third party sites will show up lower in the search results. But, if you don't have enough Google reviews, then Google won't display ratings stars at all.
And just in case you love statistics as much as I do, according to a recent Harvard Business Review study, a large percentage of local searches ended with a purchase (78% on mobile, 64% on tablet/laptop, and 61% on PC).
People love to hate it, but don't underestimate the power of Yelp for small business. With over 90 million reviews, Yelp is the godfather (it's even been accused of mafia-like behavior) of online review platforms, and good reviews on Yelp can do a lot for a small business.
Increasing your overall Yelp rating by one star can lead to a 5-9% boost in revenue. And 98% of Yelpers have made a purchase from a business they found on Yelp, so make sure you've claimed your Yelp business page.
According to this article about cool Facebook tricks, 80% of consumers are more likely to trust a local business if it has positive Facebook reviews. And consumers can search for local businesses on Facebook Professional Services now, where the business' star rating will appear in the search results.
Putting reviews on product pages is the way to go. Not only has it been proven to increase review volume by 324%, but it can also increase product coverage and the profile of the website.
What to do with bad reviews
Negative reviews are tricky. On one hand, a negative review can damage a young business. On the other hand, consumers don't always trust a business' reviews if they're all positive. Still, negative reviews do come at a cost. Negative reviews can cause four out of five consumers to reverse purchase decisions.
So that potential customer might be ready to buy until they read a few negative reviews, at which point they will simply walk away. Additionally, one bad Yelp review can cost your business 30 customers, and bad reviews in Google search results can cause you to lose 70% of those potential customers.
However, if you engage those customers who post something negative about your business, you can turn the bad experience (and possibly that bad review they left for the world to see) around. When businesses respond to unhappy customers (and actually resolve the problem) that customer is much (70%) more likely to use the business again. All you have to do is respond, apologize, and genuinely try to make it right.
Not sure how to make it right? Just ask the reviewer what you can do for them.
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