Customer Reviews: What’s Their Worth & Should You Trust Them
As a consumer, you likely notice a company or product’s reviews, if not intentionally search for them when shopping or looking for a local business. Whether it is the seller ratings you see under Google search results, how a local business stacks up against competitors in Yelp, or the star rating on each and every product on Amazon, it is nearly impossible to not see how the company or product is “ranking” or graded by consumers. Customer reviews obviously matter to consumers and thus should be extremely important to businesses.
Customer Reviews Matter
In a recent study performed by Womply, the relationship between reviews, star ratings, and revenue was examined at a deeper level. They analyzed more than 200K small businesses in every state across the US and across dozens of industries to connect review management with revenue outcomes. Some of the key findings are below:
- Businesses claiming their listings on multiple sites earn 58% more revenue
- Businesses that respond to reviews average 35% more revenue
- Businesses with ratings of 3.5 to 4.5 stars earn more than those with higher and lower ratings
- Businesses with more reviews (than the average) across sites generate 54% more revenue
It is crucial for businesses to claim their listings – those that didn’t averaged $72K less in annual revenue according to the Womply study. Consumers not only find and engage with your business easier and more readily when you claim it on key sites like Google My Business, but they are also more inclined to buy from businesses with reviews (which is kind of obvious, right?). Getting customer reviews is one thing but responding to them is another vital step. According to the Womply study, 75% of businesses don’t respond to their online reviews, but those that do earn significantly more revenue.
If you haven’t claimed your listings and are wondering if you can, feel free to contact us at Pico Digital and we would be happy to assist you in the process. Below are also some of the key sites’ review stipulations.
Google. If you have a review or two, your star rating should appear on your local listing, but you want to aim to have more customer reviews than your competitors. Keep in mind that Google also tends to add reviews from other sources to your local search listing. For instance, if you have an online store and you want your Google Seller Rating to show up on your paid Google Ads, you need at least 100 unique reviews and at least a 3.5 star rating.
Yelp. There is not a specific number you must have, but more is better considering Yelp will only allow a fraction of those reviews to show up on your Yelp page. To help improve your ranking outside of reviews, ensure your business’s Yelp profile is complete, correct, and up to date including photos (which help with user’s time on your page as well).
Facebook. Like Yelp, there is not a specific number of reviews needed, but more is always better. Everyone who views your Facebook page can see your reviews and these reviews can also contribute to your local listing on Google.
Are Star Ratings or Review Counts More Important?
This is something that both businesses and customers form their own opinions on – is a business with a less than 3.5-star rating and 400 reviews more trustworthy or a business with a 5-star rating and four reviews? Both are important but based on the Womply study, review counts were more strongly correlated with revenue performance than average star ratings. In fact, the optimal star rating range was 3.5-4.5 stars. Perhaps because typically 5-star businesses tend to have lower customer review counts or maybe consumers are somewhat skeptical of 5-star businesses. According to the study, “Businesses with more than the average number of reviews across all review sites bring in 54% more in annual revenue”.
As a business you want to encourage consumers to submit customer reviews and try to get as many as possible, however even if you have thousands of reviews and your average star rating is a 2, that likely isn’t helping your revenue. If you have a program in place that ethically generates a steady stream of reviews, you are actively responding to those reviews, and you claim and update your profile on key sites, you are likely in good shape.
But What About Fake Reviews?
Customer review fraud has been a problem for a while now, specifically for Amazon, and the fake review problem seems to only be getting worse. Since most consumers are unaware of the issue, they are being swayed to purchase by hijacked reviews. Typically, consumers look at review counts and star ratings and might read a few isolated reviews but don’t necessarily look closely enough to determine fraud.
Consumer Reports recently published its own investigation of “review hijacking” which goes into detail about how this is accomplished by deceitful sellers. Fake review generation is somewhat of a black hat SEO tactic, unfairly helping specific products gain visibility and credibility which puts the honest Amazon sellers at a major disadvantage.
All in all, when it comes to getting customer reviews for your business, there are certain things that you can and should control but unfortunately there are others that are out of your hands. If you don’t already have a program in place to generate and nurture customer reviews that should be your first step.