Reviews: The Good, The Bad, and The Ugly

We are living in a review-economy. Now with a few clicks and couple hundred characters, anyone can drop a review and let the world know how much they love that organic coffee shop down the road, or how that one airline company managed to lose and send your luggage across the world.

Technological advances have made customers’ voices extremely powerful, and reviews have become a way of life with sites like Yelp, Facebook and Google all giving customers a digital space to share their experience with the products and services they use.

Whenever a consumer is unsure about a brand, the first question that comes to their mind is “what do people think about these guys?” They’ll ask their friends or search online to find experiences from others just like them.

Consumer engagement is evolving rapidly, and reports show that 85% of consumers trust online reviews as much as personal recommendations, and what those reviews say matters. The same study showed that 48% need to at least see a four-star rating before they choose to consider using a product — that’s half of your potential customers.

Consumers trust consumers, and online reviews have incredible power to shape their behavior with 93% of consumers saying they have an impact on their purchase decision. Psychologically this makes sense; it’s in our nature to want to fit in and that’s also true with the products and services we use.

Reviews are simple reputation checks that help consumers determine brand legitimacy and trust, and they are everywhere.

However, at the same time the challenge for brands is that problems can spread across social media, but the resolutions don’t. When unhappy customers are looking to vent, they tend to submit one-star reviews, and those tend to stick even when you provide a satisfactory resolution. Businesses don’t have full control of their online reputation and they need to accept that the conversation isn’t 100% in their hands.

So, what does this all come down to?

Negative Reviews = Money Lost. According to research by Moz, having just one negative review pop up in the search results can risk costing businesses a quarter of all potential customers, increasing with every additional one. Exactly how much missed business a negative review results in is difficult to determine, but 94% of consumers say an online review has convinced them to avoid a business. And remember, these are valuable consumers who have already made it into your conversion funnel — they are interested in your business.

Content is king when it comes to consumers basing decisions off reviews. However, star-ratings still count and when you look at the studies, the numbers aren’t pretty. One study showed that 3.3 is the minimum star rating of a business consumers would even consider engaging with, while other findings show that 80% of consumers say they only start trusting business with an average of 4.0 stars or more.

These are hard stats, and there is a risk of the customer journey ending before they even get a chance to get to know you.

At the same time, consumers are more curious than ever to learn what could go wrong if they decide to try out one of your products. The same study showed that more people are looking at one-star reviews than last year, claiming they are more trustworthy than positive reviews. Since 2011, the number of consumers reading reviews has been risen by 22%, and reviews continue to play in important role in establishing trust, so it pays off to have a strategy in place for managing negative reviews and online reputation.

Positive Reviews are Gold. Not only do positive reviews help establish brand trust and encourage consumers to make purchases, studies show they are willing to pay up to 15% more for the same product or service if they are assured they will have a better experience.

A better brand image implies higher perceived quality, and positive reviews can only help to increase your bottom line. In addition to this, after a consumer reads a positive review, they are also much more likely to visit your business or website and get in touch with you.

Having a positive online reputation is important, especially if you are a newcomer trying to compete against an established competitor who has already built trust authority with your target audience.

Word-of-mouth is very powerful, and it is one of the most important parts of building your brand and reaching customers in a greater space. Besides, happy customers do your best marketing and they do it for free.

It’s all about Resolutions. According to survey results, two-thirds of consumers have never heard back from a business after leaving a review. Now that consumers have the power to amplify their messages through different social media channels and review sites, that puts your business at more risk. With negative reviews, this is both a problem and opportunity. Consumers also know that the perfect company or product doesn’t exist and can be willing to accept your flaws if you take responsibility and initiative to make a less-than-perfect situation better.

Customers want to be heard, and 45% of consumers also say they are more likely to visit a business if it responds publicly to negative reviews. When you answer a negative review and address the upset customer, you are also speaking to the hundreds of other consumers that want to know how you conduct your business.

There’s untapped value your business can unlock when you resolve complaints transparently, and when consumers see a business trying to do the right thing, it builds trust, goodwill, customer loyalty and extends customer lifetime value.

Lastly, sometimes it’s not enough to simply acknowledge an unsatisfied customer. The trick is to respond in such a way that they will want to give your business another chance, proving to the other potential buyers that your business has top-notch customer service.

P.S. We created a cheat sheet to help those who lead customer care teams to avoid mistakes that research shows will lead to lower NPS/CSAT scores. Grab your copy of the “15 phrases and words to not use in customer service” here.

The author is the founder of No No No — a platform that brings together consumers and businesses to resolve complaints. ‘A modern-day BBB.’

What makes No No No different is that businesses have a fair opportunity to respond. Consumers are only able to rate and review the outcome of the resolution, unlike in BBB/Yelp/Google.