The Impact of Online Reviews on Businesses
- Consumers are likely to spend 31% more on products/services from businesses that have excellent reviews
- 86% of consumers read reviews for local businesses (including 95% of people aged 18-34)
- A negative review can drive away 40% of potential 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
- 57% of customers won’t use a business that has fewer than 4 stars (up from 48% in 2017)
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 shows that negative reviews stop 40% of consumers wanting to use a business. 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.