Are Negative Reviews Costing You Business?

"We can't go there, that place has bad reviews." If that sounds familiar it's because more and more people are relying on online reviews when choosing a business. Google has even begun to factor in the quality of your online reviews when ranking it on its search results. So, the question becomes: are these reviews, with their newfound ubiquity and power to influence, impacting your business in a positive or negative way?

Folks are talking about you...

Spoiler alert: People are probably already talking about your business online. In recent years, an entire class of websites has sprung up for this exact purpose. Sites like Yelp, TripAdvisor, Angie's List and others have become an integral part of the purchasing process for many consumers.

And, did you know that a recent study by Dimensional Research revealed that 79% of consumers trust online reviews as much as personal recommendations.

This phenomenon simply reflects what goes on offline, in the real world. Think about it: If you're in the process of making an important buying decision and you know someone who's been there, and done that, what do you do? You ask them about their experience. And it doesn't take many folks reporting the same negative experience about a business to get it crossed off your list of options!

At this point, you might be curious about what, if anything, is being said about your business on the web. We created a free tool that will let you find out just that. Simply enter your business' name and zip code and you'll get instant access to a report that breaks down all your reviews. It's free and easy-peasy.

Not having any reviews isn't much better

Reviews have a legitimizing effect in the eyes of consumers. They provide points of reference that orient and help confirm or deny their basic apprehensions about a business. Given the choice between a business with an average rating of 4.2 stars and one with no stars at all, most will choose the one with 4.2 stars.

Search results with ratings are much more likely to draw the click

More stars equals more revenue

It's literally that simple. According to a Harvard University study, a one-star increase in Yelp rating can lead to a 5% to 9% increase in revenue. This means that a 1/2 star decrease in overall rating could literally mean the life or death of a business. Think about it this way, if a business is making 14% in net profit and begins to loose 9%, how would that affect their business? And, if they received an extra 9% of revenue that all dropped to the bottom line as profit, their percentage of profitability would nearly double.

Review Advantage Logo

Review Advantage allows you to finally gain some control over your online reputation and the quality of your ratings and reviews. You'll be able to turn satisfied customers into positive online reviews while turning unsatisfied customers into valuable internal feedback that you can use to improve customer service.
Learn more.

Some stats (for those who like stats...)

92%
Of Users Will Use a Local Business If It Has a 4 Star Rating.
72%
Of Users Will Use a Local Business If It Has a 3 Star Rating.
27%
Of Users Will Use a Local Business If It Has a 2 Star Rating.
13%
Of Users Will Use a Local Business If It Has a 1 Star Rating.
90%
Of Consumers Say Their Buying Decisions are Influenced by Online Reviews.

Research by BrightLocal.com

So this is powerful stuff and it shows us why more and more businesses are developing review acquisition strategies as part of their overall marketing efforts. But there's yet another way that reviews affect your bottom line...

Online reviews impact your SEO in a big way

Reviews have become such a reliable indicator as to the quality of a business that Google now factors this in when deciding which ones to list in its search results. This means that having more positive, online reviews will help boost your local ranking significantly and drive more traffic to your website. Negative reviews have the opposite effect. According to MOZ's Local Search Ranking Factors Survey, online reviews are thought to make up 10% of how Google and other search engines decide to rank search results. Here's a pie chart they provide to visually illustrate the break down of variables:

Overall Ranking Factors
Pie chart of Local SEO ranking factors

Turning reviews into a marketing asset

There's a lot of things that you can do to get back in control of your online reputation. It's a topic that merits its own blog post. In fact, I wrote an article called How to Get More (and Better!) Online Reviews covering this exact topic that you might want to check out.

I hope you've learned a lot about the importance of having a positive online reputation. But more so, I hope you haven't been discouraged! The power that reviews have over your business' ability to acquire new customers presents a great opportunity for you! Harness the information you've learned and start reaping the enormous potential benefit of The New Word of Mouth.

Got any questions? Feel free to drop us a line here. We're always happy to hear from our readers.

Cheers!

- Fernando Vela
Review Advantage Guy

Related article: 12 Keys to Success on Yelp