What Star Rating is Too Low for a Local Business?

What Star Rating is Too Low for a Local Business?
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Last month we released the annual update of the Local Consumer Review Survey. In the 2014 update we asked over 2,000 consumers about how they read, use & interact with online reviews. One of the main themes we were interested in was trust & influence. Particularly how online reviews can help build trust between a local business and a consumer, and how influential those reviews can be in turning browsers into buyers.

On the subject of trust & influence, one question which generated a lot of interest and fascinating results was about what star rating is perceived to be too low to consider using a local business.

We know that local businesses with a lower star rating will miss out on attracting new customers, but from the results of this question we were able to quantify exactly how much.

Now we’ve taken that data and turned it into a handy infographic to simplify the results & help reaffirm the importance of online reviews.


 

Average star rating for local business


As we saw, the greatest difference occurs when a business has a 2 star rating compared to a 3 star rating. The jump from 3 star to 4 star is also sizable, with 20% more consumers willing to look at a 4 star business over a 3 star one.

This clearly shows the impact that positive reviews can have on winning customers & should serve as a barometer for all local business owners. Feel free to share it with any anyone who might benefit – it’s reputation management in visual form!

Looking closer at this question also gave us a chance to delve a little deeper into the data and see if there were any further insights based on consumer gender or even age.


What star rating is too low? sorted by gender

There are local businesses that may target customers that are either majority male or majority female. For this reason it is worth considering whether star ratings have a stronger influence over these consumers.

Low star rating for local business

Analysis:

Male:

  • 89% will use a local business if it has a 4 star rating
  • 67% will use a local business if it has a 3 star rating
  • 26% will use a local business if it has a 2 star rating
  • 12% will use a local business if it has a 1 star rating

Female:

  • 94% will use a local business if it has a 4 star rating
  • 75% will use a local business if it has a 3 star rating
  • 27% will use a local business if it has a 2 star rating
  • 13% will use a local business if it has a 1 star rating

Analysis:

The data in the chart is a little difficult to interpret so we hope the bullet points above make it clearer.

It’s fair to say that online review star ratings don’t have much more influence over consumers of either sex. There is a small difference in terms of male consumers who may consider a 3 or 4 star rated business too low. However, the overwhelming takeaway is that reviews are clearly important to all consumers, and business owners should concentrate on improving their star rating no matter what gender their target customers are.


What star rating is too low? sorted by age

As many businesses have typical customers of varying ages, we thought it would be interesting to look at the results by age.

What star rating is too low for a local business?

Analysis:

2 star rating:

  • 28% of 18-34 will use a local business if it has a 2 star rating
  • 30% of 35-54 will use a local business if it has a 2 star rating
  • 21% of 55+ will use a local business if it has a 2 star rating

3 star rating:

  • 71% of 18-34 will use a local business if it has a 3 star rating
  • 71% of 35-54 will use a local business if it has a 3 star rating
  • 77% of 55+ will use a local business if it has a 3 star rating

Analysis:

We’ve picked out the results for 2 & 3 stars as they make the most interesting reading.

If a local business has a 2 star rating, then the age bracket they are going to attract least is the over 55’s. However, once a business has a star rating of at least 3 stars, then they are likely to lure a lot of that age group back – 77% would consider using that business.

The 55+ age group also seem slightly less discerning about the star rating once it reaches that acceptable level of 3 stars. But anything less than that and you risk losing their business.

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3 thoughts on “What Star Rating is Too Low for a Local Business?”

  1. I find it very interesting that no matter what age or gender it looks like 3 Stars or more is the magic number. Thank you for taking this research one step further by including those statistics as it allows businesses to identify how their target market responds to various star ratings!

    Great article!

    1. Thanks Devin – with all the survey data available we thought it would be great to dig deeper into this and other questions!

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