Picture this: you’re in the market for a car. You want to make sure the dealership you work with provides a high level of customer service. Where’s the first place you turn? Online reviews. According to a study by eConsultancy, 61% of customers consult online reviews before making a purchase. With sites like Yelp and Google+ providing a steady stream of customer comments, and most major online retailers incorporating reviews into their sites, it is more important than ever to build your digital reputation. We’ll take a deeper dive into how reviews impact your business and what you can do about it below:
How Reviews Impact Your Business
If you’re still not convinced that online reviews have an effect on your bottom line, a study by Polk revealed that stores with average star ratings of 4 or higher (on a five-point scale) experienced 21% higher sales than stores rated 2 or below. When these stores received a 1-star increase in Yelp ratings, it translated to a 5-9% increase in sales (Harvard Business School, 2011). Positive reviews can boost your sales, while negative reviews can hurt them.
So consumer reviews effect your revenue. But did you know that they also factor into what Google uses to determine your organic search rankings? Google takes into account the relevance, recency, and reputation of a particular site before serving it up to the user. The unofficial algorithm looks like this:
Relevance x Recency + Reputation = Organic Search Rankings Results
Not all factors are weighted equally, but reviews fall pretty squarely under the “reputation” category. The more reviews you have, the more credible your site is deemed by Google, and the more likely you are to be served up for a particular search term. In short—online reviews provide Google with fresh, authoritative content that makes your business more likely to be found by potential customers.
Why Do Consumers Leave Negative Reviews?
If you own a business, chances are you’ve been on the receiving end of a bad review. If your first instinct is to get defensive when such feedback filters in, pause for a moment. Let’s take a look at why people leave negative reviews online in order to better understand how to address them.
While 23% of people post negative reviews purely out of vengeance, 71% post because of failing traditional customer service – which is never fun to hear! However, no need to panic. There will always be customers who are unable to tell you in person when they’re having a problem, and negative reviews are a great way to identify operational areas for improvement. By treating every negative review as a learning opportunity, you lower the risk of firing off a brash response.
Should I Respond to Negative Reviews?
Negative reviews should definitely receive a response—but unfortunately, only 38% do. Reputation management is an art, and negative review responses must be carefully crafted to acknowledge the customer’s complaint while also speaking to potential consumers who might happen to read them. Because reputation management requires a neutral, diplomatic response style (and because it can get time-consuming), it might be in your best interest to outsource this task. For example, Launch Agency provides reputation management services for Park Place Dealerships, which encompasses 17 luxury car dealerships across north Texas. We respond to all negative reviews and select positive reviews as well, as positive reviews also present an opportunity to speak to prospective clients. Considering the sheer volume of reviews Park Place Dealerships receives, it’s a task best handled by a team. But regardless of whether you choose to handle reviews internally or externally, you can’t afford to leave negative reviews unanswered.
Online reviews have a profound effect on business in today’s information age, both in terms of revenue and local SEO. For more information on how to craft and implement an online reputation strategy, contact Launch Agency.
About the Author: Caroline Gillan is a Digital Content Specialist at Launch Agency, with experience in reputation management and digital analytics as well. When not creating social media content or answering online reviews, Caroline enjoys watching horror movies, lifting weights, and taking hours-long naps.