How Online Reviews Impact your Business
As a business owner, you already understand the benefit – and power – of word-of-mouth advertising. But what started as over-the-fence information sharing between neighbors, friends or colleagues, has exploded into a million-strong network of consumers eager to talk about their experiences.
The voice of the customer has always been powerful, but now the internet has magnified the reach, and it reigns supreme. As online reviews have grown in popularity, they have become an integral part of business today. People use reviews to make decisions when buying everything from TVs and couches, to hiring nannies and plumbers, and choosing restaurants and vacation destinations. If you think the opinions of others don’t matter to your customers, consider this: according to recent research, online reviews impact the purchasing decisions of 93 percent of consumers, 82 percent of whom read reviews before making a purchase decision. For 84 percent of customers, online reviews carry as much weight as personal recommendations.
The Power of Positive Reviews
The obvious first benefit of a positive review is an increase in sales and therefore revenue. According to some studies, for every positive comment a business receives, revenue grows between 5 and 9 percent. Positive reviews can increase the price a consumer is willing to pay by as much as 31 percent, according to some estimates, and 72 percent of customers say they trust a business more if they read glowing reviews.
The Impact of Negative Reviews
As wonderful as positive reviews are for businesses, negative reviews are equally damaging. Research has shown that approximately 86 percent of potential customers will not purchase products or services from a business with negative reviews. If those reviews show up on consumers’ Google searches, a business faces losing as much as 70 percent of its future customers. Even just one negative review can have an impact by driving away an estimated 22 percent of customers. Increase to three negative reviews, and 59 percent of customers turn to your competitors. Negative reviews can affect more than current and future revenue. They can damage your trustworthiness and reputation.
Although the impact of both positive and negative online reviews on your business is evident, what’s less clear is how to manage your online reputation. You need to receive ongoing positive reviews to be competitive and grow your business, while also addressing negative reviews promptly.
Protecting and Improving your Online Reputation