How Influential Are Online Reviews?

A quick search of your company’s name online might reveal several five-star reviews or a single one-star bashing. But what impact do consumer reviews really have on your business?

By and large, online reviews greatly affect people’s purchase decisions. According to a survey by Dimensional Research, 90 percent of respondents said their choices are influenced by positive reviews, and 86 percent said their choices are influenced by negative reviews.

Here are four reasons why:

1. Customers tend to believe online reviews. According to the 2013 Local Consumer Review Survey by BrightLocal, 79 percent of respondents trust online reviews as much as personal recommendations, up from 72 percent the previous year.

“Our No. 1 method for gaining new members is through referrals,” says Emily Williamson, marketing coordinator at Rainier Health & Fitness, a neighborhood gym in Seattle. It’s common for individuals to decide to walk through the gym’s doors based on what they read online. “We have great reviews both on our Yelp page and Facebook page,” she says.

2. An online presence can generate revenue. Small businesses with a free business owner’s account saw an average of $8,000 in annual revenue from Yelp, according to a study by the Boston Consulting Group, a leading adviser on business strategy.

“Certain industries have a greater likelihood of receiving reviews because of the nature of their business,” notes Jayme Pretzloff, marketing director for Wixon Jewelers in Minneapolis. “For instance, restaurants will receive tons of reviews without prompting their patrons to share their experiences online because it is very natural in a consumer’s mind to leave such reviews.”

Various categories, including home, automotive, and local services, saw even higher returns when advertising on Yelp, the BCG study noted.

3. Negative reviews can hurt business. Social sharing platforms now give the unhappy customer a vast array of publishing and sharing power. They can rant and rave from the biggest soapbox imaginable for the entire world to hear,” Pretzloff says.

In addition, if businesses don’t respond quickly to negative feedback or concerns, customers may turn away. According to a study [PDF] by Oracle, 50 percent of consumers give a company only one week to reply before they stop doing business with it.

4. Solid reviews can motivate employees. Wixon Jewelers tries to respond to each review it receives as a way to thank clients for sharing their experiences. In these responses, Pretzloff tells customers their sentiments will be passed along to team members or the employee who assisted them.

“This is a great way to boost company morale, reward employees, and show clients that you value their opinion,” he says.

About Rachel Hartman

Rachel Hartman is a freelance writer who covers small business and personal finance topics. Her credits include Industry Today, MyBusiness Magazine, Bankrate.com, InsuranceQuotes.com, and many others.
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8 comments
Julie Irvin
Julie Irvin

We use google alerts to help us monitor our reviews. The quicker you respond to good & bad reviews allows customers to see your true dedication to caring about them.

Intuit QuickBooks
Intuit QuickBooks

W.D. It sounds like we let you down. Is there something I can help you with? ^Staci

W.d. Watt
W.d. Watt

I'll echo that QBO, Payroll, and customer service are terrible. It's all a waste of time and money. I highly recommend building an Excel spreadsheet for books instead of using this service.

Intuit QuickBooks
Intuit QuickBooks

Victoria, I'm sorry to hear about your trouble. Is there something I can help with? ^Staci

Victoria Flynn
Victoria Flynn

Ben I have been having trouble for weeks with quick books online, its a pain in backside and yet again Im on the phone to them and they never answer for over 12 mins and counting still waiting!

Intuit QuickBooks
Intuit QuickBooks

Ben, I'm sorry to hear about your trouble. Is there something I can help with? ^Staci

jtlals
jtlals

People tend to trust their friends, too. I usually go to Amazon to check reviews - they have so many and it's much easier than doing a Google search. I've searched Yelp for restaurants and Trip Advisor for holiday plans, too. One new one on the block is flik app, which seems to helpful since they're videos. You can kind of tell who's "cool" and who sucks based on what they're leaving reviews on. They're only an iPhone and a website right now, hope they have it for Android soon. :/ (https://itunes.apple.com/us/app/flik./id604120491?mt=8&ign-mpt=uo%3D4)

mariajoseph2112
mariajoseph2112

Online reviews are of great help. But nowadays, fake reviews get posted and if it doesn't get checked properly, it can convey wrong message to the readers. So, one must keep eye on their reviews to save their good impression.

Jayme Pretzloff
Jayme Pretzloff

@mariajoseph2112  Absolutely correct. Thankfully the review sites are getting smarter and are able to identify fake reviews easier.