Do Star Ratings Affect Your Business
Do Star Ratings Affect Your Business
Do Star Ratings Affect Your Business's Cash Flow? Why worry about your business's online reputation at all?
Reviews serve as the ultimate pathway to growing your small business through new business leads, building confidence in your brand, and showcasing your trustworthiness and expertise.
Consumers have tipped the balance of power and are more empowered than ever to get information about a business and get it fast. Consumers have access to endless information at their fingertips, including information that will help them decide about businesses. Therefore, businesses that actively manage their online
reputation will be the ones who thrive!
As a small business owner, you must acknowledge the impact of online reviews and you must play an active role in managing your reviews. A Harvard Business School study shows that a one-star increase in your Yelp rating can lead to a 9 percent revenue increase. That's significant!
I have summarized the report findings here for you in 5 concise points:
- A one-star increase in Yelp rating leads to a 5-9 percent increase in revenue
- This effect is driven by independent business; ratings do not affect businesses with chain affiliation.
- Chain businesses have declined in market share as Yelp penetration has increased. This suggests that online consumer reviews substitute for more traditional forms of reputation. They then test whether consumers use these reviews in a way that is consistent with standard learning models. They present two additional findings:
- Consumers do not use all available information and are more responsive to quality changes that are more visible and
- Consumers respond more strongly when a rating contains more information. Consumer response to a restaurant’s average rating is affected by the number of reviews and whether the reviewers are certified as “elite” by Yelp but is unaffected by the size of the reviewers’ Yelp friends network.
I’m sure you get the idea…
More Stars = More Customers = More Sales = More Money/Cash Flow
Customers trust online reviews because they act as social proof. According to a BrightLocal study, 84 percent of consumers trust online reviews as much as personal recommendations.
This is especially true for millennials, who are the largest group of small business owners. They are also the most likely to use online reviews to make purchasing decisions.
If you don’t have any online reviews, start by asking your customers to leave a review on your Google Business page or Yelp page. You can also create a landing page on your website with links to your review pages.
Make sure you're actively managing your reviews and responding to both positive and negative feedback. This will show potential customers that you're engaged with your customers and care about their experience.
94% of consumers say an online review has convinced them to
avoid a business!
The Harvard Business School study I mentioned earlier found that a one-star increase in Yelp rating can lead to a 9 percent revenue increase. But what about a one-star decrease?
A study by Michael Luca of Harvard Business School found that a one-star decrease in Yelp rating can lead to a 5 to 9 percent decrease in revenue.
This means that you could lose up to 18 percent of your revenue if you have a two-star drop in your rating!
It's not just potential customers who are influenced by online reviews. Investors are also paying attention to what people are saying about your business online.
According to a PWC study, 46 percent of investors say online reviews are somewhat important when making investment decisions.
This number is only going to increase as more and more people turn to the internet for information about businesses.
As a small business owner, you can't afford to ignore online reviews. Make sure you're actively monitoring your reviews and responding to both positive and negative feedback. This will show potential customers and investors that you're engaged with your customers and care about their experience.
And reviews play a crucial part in how your rank on Google. Google only wants to recommend the best quality businesses in a search result, so Google considers the quantity of reviews, ratings, if reviews have received a response and relevance to search keywords.
This makes having abundant, recent, and highly rated reviews crucial to being spotted by your prospective customers. Even if your business matches all the searcher’s terms, low ratings or having zero online reviews could mean you lose your spot to a competitor.
When thinking about ways to improve your business, don't forget the power of online reviews. A few extra stars could make a big difference in your bottom line.
If you're not sure how to get started, there are a few easy steps you can take:
- Monitor your reviews regularly. This will help you catch negative reviews quickly and address them before they do too much damage.
- Respond to all reviews, both positive and negative. Thank your customers for their feedback and let them know that you're always working to improve your business.
- Use positive reviews to your advantage. showcase them prominently on your website or social media pages.
- Take negative reviews as an opportunity to learn and improve. Use the feedback to make changes in your business that will prevent similar problems in the future.
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently - Warren Buffet.
What Warren Buffet says is true - it takes a lot of time and effort to build a positive reputation, but it only takes one bad review to ruin it. Therefore, it's so important to pay attention to your online reviews. A few extra stars could make a big difference in your bottom line.
P.S. If you need help, have no idea where to start with the hundreds of review sites, or which ones your new customers are looking at – click the button below and sign up for a FREE Discovery Session with us. We will:
- Find out how you rank among your competition
- Give you an Overall Ranking for your business from your Top Review Sites
- Tell you which Review Sites your new customers are looking at, and…
- How to leverage your Google Business Listing and Review Sites to get MORE NEW CUSTOMERS
- We also will provide you with a FREE reputation dashboard so you can start managing your reviews today!!!
SEE HOW YOUR BUSINESS IS PERFORMING HERE:
