Online reviews for local businesses are more important than ever. They’re highly trusted, ubiquitous for pretty much every industry, and have a huge impact on your business.
There are a ton of reasons, forces and even algorithms that make online reviews so important, and should all be taken into account when deciding whether to prioritize how you manage online reviews to ensure every last drop of benefit is wrung from them.
It wouldn’t be too dramatic to state that online reviews are a cornerstone of online visibility, and therefore absolutely critical to making sales. They can quite literally make or break your business.
Not convinced? Consider this: online reviews are now enmeshed within the consumers decision making process. Over half of consumers will only use a business if it has online reviews and a minimum of four stars awarded on those reviews. Fail to make reviews a priority and right away, you’ve alienated yourself from half of the overall customer base.
What’s more, positive online reviews make almost 7 in 10 consumers more likely to use a local business. If you’re not making online reviews a priority and a rival is, you’re automatically less likely to win that business.
According to Inc’s Zev Herman, online reviews are the modern word of mouth – and just as you wouldn’t ignore what someone says to a neighbor, colleague or fellow shopper about your business in your earshot, nor should you ignore the fact that online reviews perform that exact same function – meaning you need to give them just as much importance.
Back in the day, small businesses relied on word-of-mouth for business success. Today, word-of-mouth is not necessary for consumers to find businesses, thanks to the internet and other advancements in technology, transportation and communication. Consumers can find companies located near them and on the other side of the globe with relative ease. Nevertheless, the word-of-mouth concept is not dead — it has simply adapted to the change in how businesses and shoppers operate. Think about it: Consumers still value what other people have to say about businesses, products and other people. What’s changed is how people get that information… for small businesses, customer reviews are important and can make or break a business. If you get too many one-star customer ratings on Yelp or another review platform, it can hurt your business. If there aren’t a lot of ratings for your business but there are a high number of positive ratings for your competitors, it may cause you to lose business to companies that are in direct competition with you.”
Now, we know that ‘make or break’ is a pretty bold claim, and as a local business marketer you’re constantly pulled in a dozen different directions: you must be active on social media, you must build links, you must create great content, you must add value.
Adding another ‘must’ to that ongoing list might feel like overkill, but the fact is that it makes good business sense. More than that, we can help you make the business case for prioritizing online reviews, whether you need further evidence for your own peace of mind or have a skeptic higher up to convince.
1. Online review signals are a local ranking factor
According to data from the World Advertising Research Center (WARC) and GSMA, a mobile trade body, almost three-quarters of the global internet population will access the web exclusively via smartphone by 2025.
The proliferation of mobile internet use is important because it has a direct impact on local businesses. Writing for Search Engine Journal, founder and CEO of PureLinq Kevin Rowe says that local SEO has never been more difficult nor more critical for local businesses than it is today. He points to the proliferation of mobile internet use and what this means for consumers and businesses, noting,
Getting a local business to rank well in search results has never been more difficult. This is due to two reasons: a massive increase in the number of mobile devices (meaning more people are turning to their phones to find businesses near them) and an increasing number of businesses recognizing the benefits of local SEO. There is also Google’s Local Pack, which pushes down the first website search result below the fold. This section has been cut down from seven businesses and may also contain ads… This is incredibly useful for mobile users. They can quickly find a business near them and see hours, phone number, reviews, and more – all without ever clicking through to a website. For businesses, it means local SEO has never been more critical. To get found, you need more than good content. You need local SEO and, ideally, you want to be included in Google’s Local Pack.”
The importance of local SEO is a key reason to prioritize online reviews as a small business owner. As Rowe says, it’s harder than ever to secure local search visibility – but we also know that review signals, including quantity, velocity, diversity and star rating make up the second-most important local ranking factor according to the Whitespark Local Search Ranking Factors survey.
Ben Fisher from Steady Demand says the synergy between local SEO visibility and online reviews makes perfect sense when you consider what a review represents. He says,
Reviews (along with an owner’s response) show that consumers trust a business, and trust is a foundational factor in ranking.”
From a business perspective, having enough online reviews to establish trust can pay off in more ways than one. Over and above the boost to local search position, making review acquisition and management a focus can bolster your bottom line, too – research released by comScore, Neustar Localeze and the agency 15 Miles found that 78% of all local mobile searches result in an offline purchase.
Google’s own research into local search behaviour backs up these findings, again underlining the need to fold online reviews into your marketing activity in order to reap the local SEO benefits. The search engine commissioned Ipsos MediaCT and Purchased to conduct two consumer studies, which concluded that local search has tangible financial benefits for business owners. 50% of local consumers conducting a local search on their smartphone visiting a local store within one day. 18% of local searches lead to a purchase within one week, compared with just 7% of non-local searches.
2. Online reviews are ubiquitous
In the modern digital landscape there is simply no getting away from online reviews. They are woven into the fabric of online consumer behaviour and buyer journeys so much so that consumers who don’t seek out, refer to or use online reviews in their decision making process are in the minority.
Our own Local Consumer Review Survey has been a barometer of this penetration into the consumer psyche over the last nine years. In 2010, 67% of consumers had consulted online reviews for a local business, with just 22% of 16-54 year olds regularly reading reviews.
Fast-forward to 2018 and it’s a different matter, with 86% of consumers reading reviews for local businesses, including 95% of people aged 18-34. 27% of consumers always read a local business’ online reviews, with 22% doing so regularly.
Today, online reviews don’t just live on review platforms. They form an integral part of the much broader marketing landscape, which makes the prioritization of this asset all the more important.
Trustpilot says that impressions for its TrustBox widgets, which display tagged reviews on a third-party website such as the local business homepage, exceeded one billion online impressions in 2017, which tells you a lot about the ubiquity of online reviews
Trustpilot is also an advocate for the presence of online reviews right across the marketing and PR spectrum. It explains,
At Trustpilot, we know the power of reviews extends far beyond the boundaries of Trustpilot.com and your website. So, we asked our customers across the globe to show us how they used Trustpilot in their marketing campaigns.”
Its findings demonstrate that reviews really are multi-functional and are increasingly being deployed across media types, across ad and content formats, across various channels and both online and offline:
The CEO of one Trustpilot client, MailMyPrescriptions says it uses its reviews in its television ads, which air on 50 local cable TV shows and networks in the US as part of a new storytelling process.
Another firm, TrailersPlus, uses its online reviews generated via Trustpilot in its bricks and mortar store and on its Facebook business page.
Inkbox repurposes its reviews, taking them from the review platform and into its social media narrative by sharing its reviews on Instagram stories. Inkbox President Braden Handley told Trustpilot researchers,
Reviews can be super powerful, especially when you show them in a fun and creative way. Instagram stories allow us to show our Trustpilot reviews to an already engaged and interested audience. Every time we show our reviews on our IG stories we have around 40,000 eyes on it, so the influence is definitely there.”
There are also examples of Trustpilot customers putting their reviews to work as a core element of print adverts, in email referral campaigns, on TV adverts, for transport ads, on printed flyers, on Twitter, in blog content, during TV broadcasts, on bus and public transport ads, in remarketing and on exhibition stands.
Online reviews really are everywhere. Of course, with such a heavy diffusion of online reviews across pretty much every form of marketing and advertising, consumers don’t even need to be searching out reviews specifically to be exposed to them.
If you haven’t made them a priority and your competitors have, they have so many more outlets to reinforce customer trust, highlight their service excellence and display peer recommendations to consumers than you do.
Taking this even further, consumers aren’t simply being presented with online reviews at multiple touch points. They are actively participating in the review process, making them even more ubiquitous. The Local Consumer Review Survey confirms this, finding that 80% of 18-34 year olds have written online reviews for local businesses. 59% of all consumers have written reviews and 27% are open-minded to doing so. Just 14% of customers would never leave an online review.
3. Online reviews are trusted
Establishing trust with consumers isn’t a given. For local businesses going up against big name stores such as Amazon or Walmart, it can feel like a thankless task.
Customer Experience Futurist, Author and Keynote Speaker Blake Morgan told Forbes,
One of the most important aspects of customer experience is trust. Customers simply don’t want to do business with a company they can’t trust. For industries that are built on the foundation of trust, there isn’t a lot of trust happening these days. In fact, consumer trust in many of these industries is at an all-time low. It’s not due to one single event, but rather to slowly chipping away at the relationship.”
For some demographics, online reviews are a prerequisite for trust. A study carried out in 2018 found that 8 in 10 millennials never buy a product or service without first reading online reviews. Three in 10 millennials will only buy from sites with trusted recommendations.
This group, which has grown up online, has such a strong trust in online reviews that they are less likely to seek a personal recommendation. The study, carried out by Boxt, discovered that while half will check online reviews, just 8% will ask friends and family members for their opinion before parting with their cash.
If you do prioritize online reviews and reputation management, you’ll get a very powerful leg-up on the trust scale. BrightLocal’s own research confirms that 91% of 18-34 year old consumers trust online reviews as much as personal recommendations. Overall, 78% of consumers trust online reviews as much as a recommendation made to them by a friend, colleague, family member or acquaintance. Taking time to grow your online reviews and prioritizing their acquisition puts you on the path to building trust.
What’s notable here is that trust isn’t a passive thing – when consumers trust online reviews, they tend to take an action. That action could cover anything from calling the store or visiting the location to buying online or making a booking. These actions invariably help to grow your revenue.
According to an oft-cited Harvard Business School study, a one-star increase in review rating correlates to a 5-9% increase in revenue. This fact alone really underlines just how trusted and relied up online reviews are. The study, entitled Reviews, Reputation and Revenue: The Case of Yelp.com was carried out by Michael Luca in 2016.
In his abstract he notes, “…online consumer reviews substitute for more traditional forms of reputation.” He also says, “…consumers respond more strongly when a rating contains more information.”
4. Positive reviews lead to new business
We’ve already seen that there is a strong correlation between online reviews and building consumer trust. Trust is a currency – it’s a means of securing a sale, a reservation or a booking – so it shouldn’t come as much of a surprise to learn that positive reviews directly lead to new business. We’ve already touched on this a little with the Harvard study abstract above, which proves that higher star reviews generate up to a 9% increase in revenue for independent restaurants.
This relationship between positive reviews and new business extends beyond the hospitality industry. The latest BrightLocal Consumer Review survey data provides the first hint of this review – revenue relationship.
We found that 57% of consumers will only use a business if it has 4 or more stars. This statistic alone makes a very strong business case for prioritizing online reviews as without them, you cut your potential client base down to just 43% of consumers.
What’s more, we have been able to establish that positive reviews make 68% of consumers more likely to use local businesses, again creating a direct link between reviews and sales. Just 15% of consumers say online reviews don’t impact their decision of whether to use a local business or not.
Our own findings are backed up by HubSpot, which says,
“HubSpot Research also found that 60% of consumers believed customer reviews were either trustworthy or very trustworthy — meaning that businesses that can accumulate positive reviews had a good chance of them helping a customer make a purchase decision.”
The correlation between online reviews and new business is really a culmination of the positive sentiment we have seen consumers exhibit when it comes to reviews.
When shopping or researching online, there is no sales person to turn to, so online reviews from peers provide valuable information about the company, product or service. Consumers, especially digitally-native Millennials, are predisposed to trusting online reviews, and take an almost crowdsourced approach to decision making.
This trust in the collective, which we see plainly in the sheer number of people who use reviews to help them decide whether or not to use a business, who routinely check online reviews and who expect a minimum star rating, naturally leads up to the moment of purchase.
The feedback from peers, which comes in the form of online reviews, allows the consumer to gather data, become aware of potential problems, find out what or who other people have had the best experiences with and spend their money in line with the majority.
Still not convinced? Forbes Council Member Cory Capoccia says online reviews attract new customers because they come into their own when a consumer is proactively looking to make a purchase. He explains,
If you run a small business today, the single most important thing you can do to attract new customers is to take control of your online review score on sites like Yelp, Google My Business, Foursquare and TripAdvisor. In the past, small businesses had to rely on inefficient “push” methods to attract new customers. If you buy a radio ad, for example, the message has to do two hard jobs: Convince the customer to spend money with you and create urgency to do it now, before distractions take over. When a consumer uses a review platform like Yelp or Google My Business, the decision and urgency to buy are exactly what prompted the person’s search. If traditional advertising is a megaphone that enables businesses to shout and see who’s listening, review sites are tractor beams that pull consumers toward local businesses precisely when they’re actively looking to spend money.”
5. The more reviews you have, the better
While you will inevitably gather online reviews for your brand if you take a hands-off approach, it likely won’t come anywhere near to the volume and freshness of reviews you need for them to truly deliver on a range of business benefits.
In fact, there are multiple reasons why you should aim to get as many review as possible. The more you have, the better.
Consumers expect to read a lot of reviews
First up, prioritizing the acquisition of online reviews means you are much better placed to meet or exceed consumer expectations. The volume of reviews you have available is directly linked to consumer trust, with BrightLocal’s latest Local Consumer Review Survey finding that the average consumer will expect to read around 10 online reviews before they feel they are able to trust a local business.
As we saw earlier, trust strongly impacts sales so you need to have a large enough stock of reviews to get your prospective customers to a place where they feel they have enough information to put their trust in your business.
Consumers value quantity and freshness
From a purely numbers-focused perspective, local consumers value quantity of reviews highly – but they also want to see fresh reviews. 49% of consumers say the quantity of reviews you have is a factor they pay attention to.
Back in 2016, just 35% of consumers valued quantity of reviews. This number increased in 2017, moving up to 46%, so again we can expect this to be even more of a factor in the not-too-distant future.
As well as that quantity, we can also share that 40% of consumers need a review to be no more than 14 days old for it to impact on their decision – yet more proof that you need a lot of reviews, on a regular basis, to be in with a shot of making a positive impression and beating your competitors to the sale.
Consumers need a lot of reviews before they trust your average star rating
While the average consumer will read around 10 reviews before they feel they can trust you, they expect to see a whole lot more before putting any store in your star rating.
In fact, you’ll need as many as 40 reviews before the consumer considers your star rating to be accurate. This has increased by a factor of seven in the last 12 months so it’s realistic to expect the goal posts will be shifted higher still.
Google wants you to have a lot of reviews, too
It’s not just consumers who place importance on a large number of reviews; Google does, too. This is especially important if you’re a Google Ads advertiser because you’ll need dozens of reviews to activate the seller ratings ad extensions.
Showing below text ads, seller ratings help people searching on Google to find businesses that offer quality service. Seller ratings can help advertisers improve ad performance and earn more qualified leads… In most cases, seller ratings in a country only show when a business has 100 unique reviews from that same country and a composite rating of 3.5 stars or higher.”
The reviews used by Google come from a range of sources including Google Customer Reviews and platforms such as Trustpilot.
Volume of reviews is a local SEO ranking factor
Having a strong local SEO presence is non-negotiable if you want to ensure the long term success of your local business. 71% of people looking for a local business now do so online, while some 46% of all Google searches are for local results.
To be in with a chance of securing custom, you need to be highly visible to local search users, and for that, you need plenty of reviews.
The benchmark Local Search Ranking Factors survey cites review signals as the second most important local SEO ranking factor for the local pack. Within that, review quantity, velocity and diversity all need to be strong – so you’ll need a good influx of reviews, on a regular basis, to achieve good rankings in local search results.
You need to acquire new reviews regularly
We have seen the regular addition of new reviews popping up a couple of times now, so it’s worth locking down exactly why this matters for you to correctly prioritize your review and reputation management.
40% of consumers only take into account reviews written within the past 2 weeks when making their decision about your business, so a lack of recent reviews could sabotage you at the last moment, even if you’ve ticked all of that potential customer’s other boxes.
Additionally, 85% of consumers think that online reviews older than 3 months aren’t relevant, meaning that just because you’re working hard today, it doesn’t mean you can rest on your laurels tomorrow. You need to be constantly adding new reviews to meet the volume and freshness expectations of today’s savvy consumers.
According to data from the Pew Research Centre,
Reading online reviews is common across [a] wide range of demographic groups, but those under 50 are especially likely to regularly incorporate them into their shopping experiences. A little more than half (53%) of 18- to 29-year-olds and 47% of 30- to 49-year-olds say they always or almost always read online reviews when buying something for the first time.”
As a business owner, this leaves you striving to meet a trio of demands:
- You need enough reviews for a consumer to feel that they can trust you
- You need sufficient reviews to pass the ’40 reviews’ threshold for your star rating to be considered accurate to validate that trust; and
- You need all of that within a 14- or 90-day window from today.
If you aren’t adding enough reviews on a regular enough basis, you run the risk of your potential customer moving on to review the reviews of your nearest rival.
6. Consumers care that you respond to reviews
It’s not enough to simply commit to methods which will generate a steady influx of new reviews each day. Modern reputation management is more multi-faceted, and prioritizing reviews means you also have to make time for meaningful interactions.
For many consumers, how you respond to reviews is very telling and can make or break the tentative impression they’re building of your brand through their research.
Almost 9 in 10 (89%) of consumers read businesses’ responses to reviews and 30% of consumers highly value that response. If you aren’t taking online reviews seriously as a sales and trust tool, you may not be setting the time aside to deal with responses.
It’s easy to become laser-focused on numbers, with all resources directed at acquisition. This can actually undermine your efforts because your approach will be one-dimensional.
Google, too, expects you to respond to reviews, both good and bad. It advises,
Reviews from your customers can provide valuable feedback for your business, and replying to reviews can help build your customers’ trust. When you reply to a review, your response will appear below your customer’s review on Google Search and Maps under the label ‘Response from the owner’. People on Google will see both the customer review and your response when they look at your Google reviews.”
7. A poor reputation is very dangerous
We have seen all of the positives that come with prioritizing online review management – increased trust, a better reputation, more sales – but the flip-side of that is that a poor reputation is just as impactful, but in a much more negative way. In fact, negative reviews stop 40% of consumers wanting to use a business; that’s almost half of your potential clientele lost right out of the gate.
According to Christine James, Community Manager at HissingKitty.com, a poor review costs your business both time and money. It’s a simple formula, she says, explaining,
We are in the age of the consumer, where a person can go on social media and absolutely wreck your company’s reputation based on a single incident that wasn’t handled properly. So, have a social media plan and stick to it. Consider the fact that the average person on social media has more than 300 friends. So if you sell a product that costs a mere $10, that negative review just cost you $3,000 dollars in potential business. If your products cost more than $10, the actual lost revenue figure should be adjusted accordingly.”
A poor review is also easily accessible via search engine results, and unless you successfully get it removed, will show on the review platform itself, too – all potential routes to undermining every single consumers’ view of your business.
As Jonas Sickler from Business2community says,
Whether negative complaints are rooted in legitimate grievances or totally fabricated, they will carry the same weight with customers who aren’t able to discern the difference. While most of us understand that mistakes happen and are willing to overlook a few blemishes, repeated negative reviews will drive your customers away.”
If you are proactive about reputation management, and regularly monitoring online reviews, you’ll be able to offset some of this damage by quickly (and correctly) responding to any negative reviews. You can find out step-by-step guide to replying to negative reviews here.
8. Customer feedback gives you valuable insights you can use to improve your business
In essence, an online review is simply a description of an experience. It’s one consumer relating to others how they found your business, the quality of the product or service they received and how they found dealing with you.
This means that online reviews are inherently valuable because they put you in your customer’s shoes and give you real-world insight into how your business can better serve those it relies on for survival. While they are the reviews that all business owners dread, negative reviews can actually be the most useful of all.
Google also backs this up, saying,
Negative reviews are not necessarily a sign of bad business practices. For example, the customer may have had mismatched expectations. Replying to reviews can help identify points on how to improve the experience for customers.”
If you run a hotel and guest reviews routinely mention ‘slow check-in’, for example, you have a heads-up that your process likely needs fine tuning to ensure a more positive first impression.
Reviews will happen whether or not you make them a priority for your business. We live in an age where consumers treat online reviews as the norm and rely on their to make purchase decisions and create an impression of new businesses.
Online reviews are the modern equivalent of a word-of-mouth recommendation and, as such, are incredibly valuable assets that you can leverage by being proactive.
There is no doubt that consumer expectations are high in this area, and that alone can be daunting for any local business owner or marketer. You need a constant influx of reviews, a high quantity of reviews, new reviews added daily to compensate for older reviews losing value, and even available resource to responding to reviews.
However, get those requirements right and you can expect to nurture stronger leads, win more new business and grow your revenue.
Need more reasons to invest in managing your reputation? Take a look at our wealth of content, guides, and research on the topic of online reviews for local businesses.