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Why Online Reviews Can Hurt Your Sales and How to Deal With It
Online reviews and websites are not a new trend, but business owners are still not totally convinced they should take the time to worry about them. As the world moves into a more digitally connected era, businesses need to understand that websites like Yelp, TripAdvisor, Google Plus Local and even Facebook are the new word of mouth – and they are not going away any time soon. Actually, they are probably just going to grow bigger. Here are three reasons – and statistics – to show you how important review websites are nowadays and what you need to do to make sure they are not hurting your profits:
1. Customers don’t trust what you say about yourself
A lot of small business owners collect reviews from current customers and re-post them on their websites. While that was a great tactic in the years prior to social networks, nowadays this strategy is weak. According to Michael Hulme’s study, “Your Brand: at risk or ready to grow,” only 8% of US customers trust what businesses say about themselves, and only 7% of US customers trust reviews posted on the business’ website.
In other words, posting the reviews you receive on your Facebook page or website won’t bring you any sales. Customers believe that businesses would leave out the bad reviews, and what they see does not reflect the truth.
How to overcome it: don’t use systems that post your reviews automatically on your pages. Besides cluttering the pages and annoying your customers, the lack of interaction will prevent you from reaching more people. Also, instead of posting just the good reviews you get, add a plug-in on your website and show all the reviews you get. That way, you will show your customers that you are confident about the quality of your product, and you care about what they say.
2. Customers trust more in online reviews than any other source
Yes, it is true. Online reviews and recommendations are more valuable than you think. Another interesting statistic Hulme found in his study is that 84% of US customers consulted family, friends AND online reviews when researching a product or service. Also, 76% of consumers reported considering online reviews when determining which local business to use.
Another study, conducted by BrightLocal, found that 7 out of 10 customers said they trust online reviews as much as they trust personal recommendations, and 85% of them claim that they were more likely to purchase products or services when they can find online recommendations.
So, if you think your customers are not online or don’t use online reviews, you are wrong. The same study revealed that 85% of consumers are searching for local businesses online.
How to overcome it: Claim your listing on all review websites, and make sure your information is correct. About 60% of small business are missing a phone number on their home page, and 75% don’t have an email address listed. So just by making sure your listings are updated, you will be ahead of the competition
3. Your online reputation can hurt your sales
A lot of small business owners say they don’t care about online reviews because they know they have a quality service/product. While it is great to be passionate about what you do, it is also necessary to be realistic. The way people communicate has changed, and the way customers connect with businesses has changed as well. As I’ve pointed out above, customers are looking online before choosing where to go and what to buy, and what they see online can change their decisions.
In fact, another study, this time conducted by Cone Inc, reported that 80% of consumers have changed their minds about purchases based on negative information that they found online, and 87% claim that positive reviews reinforce their purchasing decisions. Also, 52% said they are more likely to use a local business that has a positive reputation (5 out of 10) and just 28% of consumers cite location and/or price as their main decision-making factor.
If that is not enough to convince you, the same study revealed that 85% of customers are more willing to spend money when they can find online recommendations to support offline advice.
Also, Harvard Business Review conducted a Yelp study to find out more information about the correlation between online reputation and sales. They discovered that a one-star improvement on a business’ Yelp rating leads to a 9% increase in revenue. A bad review leads to a 13% drop in sales.
In other words, your reputation online can help or hurt your sales.
How to overcome it: Claim your listing on all review websites and make sure you post replies to all reviews. If a customer took the time to write something about you, it is because they expect you to listen. The Yelp study reported that 80% of the individuals believed there would be a positive impact from companies taking more time to find out about their needs and interests. In other words, even if you have a bad review, posting a reply will show that you care about your clients, and it’ll help other customers to see you as a trustworthy business.
Communications have changed along with the way customers relate to businesses. Ignoring that online reviews became an important source for consumers will hurt your sales. So, instead of fighting against it, take the time to deal with it. Take advantage of it and make it an opportunity to appreciate your loyal customers and to win back the ones you lost. Reply to all reviews and show you care – acknowledging your customers’ opinions is the best way to keep a good online reputation and get more sales out of it.
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