The Impact of Online Reviews on Businesses

The Impact of Online Reviews on Businesses
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Key 'Takeaways' From This Post
  • Consumers are likely to spend 31% more on products/services from businesses that have excellent reviews
  • 85% of customers trust online reviews as much as a personal recommendation
  • A negative review can drive away approximately 22% of customers

During the last couple of years, the popularity of online reviews has grown significantly. Reviews help people decide which products or services they should buy, where they should travel and even where they should eat. Over time reviews have slowly become an integral part of business on the internet.

Numerous studies have been carried out to help determine the exact impact that both positive and negative reviews have on the popularity, number of sales, product awareness, conversion rate and profitability of  businesses selling products or services.

The Positive Impact of Reviews on Businesses

  • The increased likelihood of consumers spending more money
  • Having numerous positive reviews increases the likelihood of convincing customers to pay more money for products or services. In fact, studies have shown that consumers are likely to spend around 31% more on products and services from businesses that have excellent reviews backing them up.
  • Increase in business revenue
  • Having negative reviews will surely affect your business, yet for every star that a business gets, chances are that a business’ revenue will increase by anywhere between 5%-9%.
  • The customers’ trust is increased
  • Studies have shown that 85% of customers trust online reviews as much as a personal recommendation

The Negative Impact of Reviews on Businesses

    • Negative reviews can be damaging to the prestige, profitability and trustworthiness of a business
    • A single negative review can drive away approximately 22% of customers, whereas around three negative reviews can drive away 59% of the customers
    • A single negative review could cost a business around 30 customers
    • People hesitate to purchase from businesses with no reviews or with too many negative reviews

Research has also shown that around 86% of potential customers will not purchase products or services from a business with negative reviews. In the unfortunate case that these negative reviews pop up on Google searches, the businesses can potentially lose around 70% of their future customers.

In an era where the internet has taken over the world, online reviews are bound to drive customers towards or away from your business.  Making customer satisfaction an essential part of your business can only help your company’s sales and profitability.

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8 thoughts on “The Impact of Online Reviews on Businesses”

  1. What about customers who use negative reviews as a way to get discounts and threaten businesses unfairly… there is no way to defend yourself if a customer decides to abuse the power of reviews by lying about the service they received

    1. Hi Aaron, we totally agree that at the moment the systems in place to stop fake or threatening reviews aren’t sufficient. There’s much more the major players in reviews need to do!

      Jamie

  2. I had no idea how powerful both negative and positive reviews were for companies and products. I like how you said that through reviews, other customers will gain more or lose trust in you. If someone was looking into product or service reviews, I would assume that they would keep this post in mind.

  3. This is exactly why Ratesight was created! To ensure that businesses gain more positive reviews AND to ensure that businesses can fix their mistakes before a customer writes a negative review that will never go away.

    Love the article, thanks!

  4. Fascinating article with great infographics to accompany the facts and percentages.

    We ask our customers to leave a review sometimes and are pleasantly surprised at how many actually don’t mind at all and leave a review!

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