Online reviews give power to the customers to tell their side of the buying story. This provides social proof to other potential customers.
Social proof is the level of credibility that the public provides to a service or product. The more people that use, or enjoy a product, the more likely others are to follow. Positive public endorsement of a brand by a celebrity can provide high social proof, which can directly impact sales. Likewise, a negative review can drive customers away.
There’s also evidence to suggest that online reviews are the primary way to choose where to shop locally. Nearly all consumers (97%) now use online media when researching products or services in their local area.
The value of positive reviews
Positive reviews remain a key way for companies to sell their product, with customers willing to spend 31% more on a business with excellent reviews. But there are other benefits too:
- Increased consumer trust – As you’ll know, trust is hard to gain and easy to lose following a bad experience. 92% of B2B buyers are more likely to purchase after reading a trusted review.
- Having a direct line to customers – Hearing feedback from customers will give you insights to help you improve the customer experience. You’ll soon be able to draw up a picture of the entire customer journey, and find out areas you perform well and others that need improving. With most review sites, you can also respond back to the customer and start a dialogue to find out more, and close the loop to ensure their issues are resolved.
- Appearing higher in search engine rankings – Online customer reviews gain more weighting (6.47%) in organic local searches. What customers say in their reviews also mattered – ‘Negative Sentiment in Google Reviews’ is a negative ranking factor.
The cost of negative reviews
On the contrary, negative online reviews have a devastating effect on your brand.
- 3.3 is the minimum star rating of a business consumers would engage with and only 13% of consumers will consider using a business that has a 1 or 2 star rating.
- 94% say an online review has convinced them to avoid a business.
- Four out of five consumers have changed their minds about a recommended purchase after reading negative online reviews.
In fact, businesses risk losing as many as 22% of customers when just one negative article is found by users considering buying their product. If three negative articles pop up in a search query, the potential for lost customers increases to 59.2%.
If you have a star-rating for your company, negative change to this can have serious consequences. A loss of a half-star rating means a restaurant is 19% less likely to have full seats during peak dining times (UC Berkeley). Likewise, a one-star decrease in a Yelp rating could lead to a 5-9% decrease in revenue (Harvard Business School).