When it comes to online reviews, you may be in for a few surprises. Some negative ones won’t necessarily hurt a business’ bottom line, and five-star ratings aren’t necessarily as good as they seem in the consumer’s eyes.
Those are just some of the findings in a recent study of more than 200,000 small businesses that looked at online reviews’ impact on revenue by analyzing transaction and review data.
The study, done by San Francisco-based Womply, a provider of marketing software for small businesses, found 75 percent of small firms don’t respond to any reviews. That’s a missed opportunity, because managing your online reputation can help you maximize revenues.
“Increasingly, online reviews are the front lines for consumers making decisions on where they are going to spend money,” said Brad Plothow, Womply vice president of brand and communications.
More shoppers are doing research online before even setting foot in a store, he said.
Among the survey’s key findings: Businesses that reply to at least 25 percent of their reviews average 35 percent more revenue than the average business; businesses with more than nine fresh reviews (posted in the past 90 days) earn 52 percent more revenue than the average business; businesses that average 35-50 percent negative reviews earn nearly the same as the average business; and the star-rating sweet spot for revenue is between 3.5 stars and 4.5 stars.
“Five-star ratings don’t seem very authentic,” says Plothow.
If your business has only two reviews and they’re both five stars, that can be reputable in the consumer’s eyes, but if it has 200 reviews and they’re all five stars, that becomes untrustworthy, said Jillian Weston, owner of Jillian’s Circus, an Oceanside online marketing company.
Still, you want to avoid getting low ratings, especially on Google considering the study found that low ratings on that site are more damaging to small businesses than poor ratings on Yelp or Facebook.
That’s why it’s critical to claim your listing on Google My Business (https://www.google.com/business) to manage how your business information appears. Claiming listings on other sites really depends on your business and where your customers leave reviews, said Weston.
The Womply study found businesses that claim their free listings on at least three of the major review sites (ie. Google, Yelp, Facebook, etc.) average $179,000 more in annual revenue than businesses that don’t claim their listings on any review sites.
Being present on relevant sites also helps with search engine optimization and how you rank in Google search listings, said Dylan Ander, CEO of NextCore Media, a Uniondale digital marketing agency.
“Google’s algorithm isn’t just based on Google’s result,” he said, noting that Google also looks at your presence on other local listing sites.
Google sends an email to you any time your business gets reviewed on its site, and it’s critical to reply to reviews, especially negative ones, even with just an acknowledgement, said Ander.
“The same way you would handle a complaint in person should be the same way you handle it online,” said Ander.
Just stay away from offering a discount or refund for a negative review, said Weston, noting incentives can inadvertently encourage people to leave bad reviews.
Instead, thank them for their feedback and offer a resolution as to how to avoid the issue in the future, she said.
And consider that negative reviews can provide valuable insight, said John Robertson, owner of the Sexy Salad Catering Co, and The Veggie Side in Hauppauge, who is developing a new policy on responding to online reviews.
Robertson was responding but not consistently, which will change moving forward. He’s used reviews to make improvements, including taking into account a recent one from a customer concerned about the use of plastic. This inspired him to eliminate plastic containers for hot sandwiches and replace them with ones made from a biodegradable pulp product.
He also encourages customers to leave reviews, which is a good practice, as the study found the more reviews, the better.
“Even a negative review is an opportunity to improve,” says Robertson.
Fast Fact:
According to Bizrate Insights 2019 Consumer Shopper Survey, 92% of survey respondents said they read at least one review before making a purchase decision, with the majority of shoppers reading between one and six.