What’s an Online Review Worth?
Determining the exact ROI of a single online review is tricky but the overall answer is simple: You can’t afford not to generate positive online reviews.
The impact of consumer reviews on the restaurant industry were examined in the paper Reviews, Reputation, and Revenue: The Case of Yelp.com, by Professor Michael Luca of Harvard Business School
Luca found that, “each ratings star added on a Yelp review translated to anywhere from a 5 percent to 9 percent effect on revenues.”
He also uncovered additional consumer behavior including:
- 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
- Consumers are influenced if the reviewers are certified as “elite” by Yelp
- Consumers are unaffected by the size of the reviewers’ Yelp friends network
The value of online reviews impacts multiple facets of your business including:
Search and Rankings
Provides new content for your website that search engines value. Makes your search listings stand-out to users, helping to increase traffic to your website. Increases your rankings for local searches.
Use reviews in-store as advertisement of your great work. Use in marketing collateral to personalize your brand and build social trust.
Tangible proof of how trustworthy you are. Ensure offline realities are properly reflected online.
Increase your conversion rate. Speed up your time to sale.
Customers spend more with brands that have positive reviews. More revenue for you.
Affirmation and trust from existing customers. Existing customers become your best sales and marketing.
A consumer review survey done by BrightLocal, an SEO software tool, found that 7 out of 10 consumers will leave a review for a business when they are asked to do so.
Positive reviews are a key differentiator, help you outshine your competitors, and this is one of the most powerful ways to convert potential customers.
When you take a little time to understand the review process, the great work and service that your business provides will translate into a positive reputation online which will make you more visible in the crowded digital space where customers are looking for someone that they can trust.
Online reviews and star ratings are social proof that help consumers save time and avoid frustration in their research process. There are a growing number of online review sites that cover just about every industry and service, which benefits both sides of the transaction.
Myles Anderson, CEO of BrightLocal, surveyed marketers and found that 83% of SEOs believe that asking customers for reviews delivers a good ROI.
Case Study: 14.3% Increase in Sales From Domino’s Reputation Management Campaign
The product quality of Domino’s, the national pizza chain, was suffering from a not-so-nice reputation.
Online reviews were filled with negative comments such as “pizza was cardboard,” “processed cheese,” and “Microwave pizza is far superior.”
You may recall the ads with Domino’s president, Patrick Doyle, publicly exclaiming that the company needed to make a change.
The customer feedback strategy was very successful:
Within months of releasing the campaign and the new pizza, Domino’s reported a jump of 14.3% in same-store sales, one of the largest increases ever recorded by a major fast-food chain. That happened despite a 3% decrease in the pizza-delivery business..
We realize that the majority of companies don’t have the kind of resources that Domino’s has to completely revamp their product and advertise the process online and on national TV.
However, the principles of the strategy apply to any business that is struggling with a poor reputation.
Domino’s admitted to their customers that their product was, to put it mildly, not good, and they proceeded to have an open conversation with them about it.
Customers rewarded Domino’s for their honesty and the opportunity to provide feedback that was genuinely listened to.
Domino’s share price has increased 60-fold since 2008 when the company was on a major downward slide with failing franchises and poor sales. Now, they’re taking customers from their competitors and have increased sales up to 10% for a remarkable 25 consecutive quarters.
Not Caring Is Costly
Customers trust you to provide the goods and services that they need. If you don’t deliver on your promises the best thing that you can do is admit that your business needs to improve.
People will say negative things online whether you’re monitoring your review profiles or not, so you can’t ignore it and expect a better result. It may not always be a pleasant experience for a business to listen to customer feedback and have an online conversation with them but, the rewards are great.
Not caring about your online reputation is too costly. Online reviews are worth what you put into them.
Contact RepCheckup today for help setting up your review generation solution.