Customer Experience

Use Customer Reviews to Grow Your Business

Key Takeaway

If you want to make more money, ask your customers for reviews and then respond to those reviews.

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    People read reviews and on these basis of these reviews decide whether or not to spend their money at your business.

    • How many people are reading reviews of your business and deciding not to purchase from you?
    • How much could your business grow if you asked your customers for reviews?

    Reviews are increasingly significant (for better and worse) for local businesses. Nothing is better than a personal recommendation but if this isn't possible they turn to reviews. Reviews for plumbers, schools, doctors, cars, washing machines and any other product or service they might need or want.

    I always check out reviews before visiting or using a local business. 

    If I'm in an unfamiliar area and I'd like a coffee I'll search 'coffee' in Google Maps and read the reviews for local cafes. This is what attracted me to Nectar on the Tweed coast two weeks ago.

    If a rare date night is coming up and I need to book a restaurant I'll create a shortlist of options and then see what other customers have posted. This is how I found the best Japanese restaurant I've been to.

    If we're on holidays and I'd like to find somewhere fun to go with the kids I'll see what other parents are saying about local attractions. My wife and I still talk about the time we went against our better judgement, ignored the reviews and wasted time and money at a very ordinary tourist attraction.

    Reviews used to be big in niche industries, such as restaurants and hotels. This hasn't changed - healthcare, hospitality and hotels continue to top the list, followed by automotive and dentists (source). However, reviews are influential in new sectors too. For example, job seekers are increasingly consulting reviews about potential employers before they apply for jobs.

    Why do reviews matter?

    I realise that not everyone is like me, but research suggests I'm well and truly in the growing majority.

    1. The number of people reading reviews is increasing. This has jumped from 67% in 2010 to 87% in 2020 (source). The average number of views for a local listing on Google My Business is now 1,260 per month (source). 18-34 year olds trust online reviews as much as personal recommendations (source).
    2. Nearly all consumers are influenced by reviews. Given the growth in people reading reviews it's not surprising that 72% won't purchase without reading reviews and that after price, reviews are the most important factor when consumers make purchasing decisions (source).
    3. Google uses reviews to rank local businesses in its search results. According to Moz, reviews account for 15% of the ranking and can increase or decreaase a business's ranking.
    4. Positive reviews lead to more website traffic. 54% of people will go on to visit business' website after reading a positive review (source).

    As a result:

    • People are much more likely to buy from and spend more money at a business with positive reviews (source).
    • People much more likely to avoid a business (source), change their mind about a potential purchase (source) or be more hesitant about purchasing (source) if they read bad reviews.

    Ultimately, if you want your business to grow, reviews are key.

    What do people look for in reviews?

    Reviews are important but it's not as straightforward as getting as many good reviews as you can. There are seven factors that customers take into consideration when consulting reviews. 

    1. The average rating. This is the most significant factor by far. According to research by Podium, the minimum star rating of a business the average consumer would even consider is 3.3 and only 48% of consumers would consider using a business with fewer than 4 stars (source). Put simply, if you don't have 4 stars, half of all consumers won't consider your business. 
    2. The legitimacy of reviews. A rise in the number of fake review scandals have made consumers (rightly) cautious. For example, lots of Google reviews from people who have only ever posted one review on the platform are a red flag. The integrity of some reviews might might explain why the likelihood of purchase decreases after 4.7 stars (source).
    3. The recency of reviews. Reviews can't afford to get stale with 73% of consumers only paying attention to reviews written in the last month and 86% not considering reviews more than 3 months old (source).
    4. The content of the reviews. Obviously, people want to know that other people have had a good experience. However, it should be realistic - people expect that not everyone will love every product or service and 67% want to see a mix of positive and negative reviews (source). 95% will be suspicious if all the reviews are positive (source).
    5. The number of reviews. On average, a consumer will read 10 reviews of the business (source) and will need to see 40 reviews before they trust the average star rating (source). If customers are comparing products with the same rating they will choose the product with more reviews (source).
    6. The responsiveness of businesses to reviews. 89% of consumers read the responses of business to reviews and those who post reviews expect a response within days (source). However, even though 70% of people will change their opinion about a brand when they read a company's reply to a review (source) and revenue will increase (source), three quarters of businesses don't respond to their reviews (source).

    In summary, people want to see:

    More than 40 reviews, many of which have been shared in the last 3 months, with an average rating of 4⭐️ or above. The reviews should be a mix of both positive and negative sentiment and the business should be promptly responding to these reviews.

    You might think this is unreasonable, but as I reflect on my own experiences and expectations this 'recipe' rings true.

    What your business needs to do

    If you want to make more money, asking and responding to reviews is an important strategy. Here's some examples.

    Ask for reviews

    If you don't ask you don't get. 68% of people will provide a review if asked (source) and people are more likely to write positive reviews than negative reviews (source). The very fact that you are commited to asking for reviews will influence the customer service you provide and give you an edge over your competitors. 

    Kmart asks customers if they would like to sign up for the newsletter and if they would be willing to review their purchases:

    Unicorn sent me this follow up email after they provided (great) support:

    When I purchased two quilts from Halycon Dreams last week I received this request via email:

    If you need to, offer incentives for reviews (as long as it's within the rules of the platform you're using). Airbnb offered a $25 coupon in exchange for reviews and saw a 6.4% increase in reviews (source). When I purchased coffee recently I was sent a follow up request for an email, along with a 15% discount code:

    Respond to reviews

    Not every customer is going to be satisfied and potential customers understand that. But 88% of people read the replies that businesses post (source) and these are opportunities not only to retain existing customers but also to win over potential customers. This review was honest and not at all positive, but the restaurant's follow up had a big impact:

    I've been researching washing machines and I've ruled out companies that don't reply to comments on Product Review. Being active on Product Review isn't the high water mark of excellent customer service (it's not hard to post a reply saying "We're sorry you've had a bad experience, please email us and we'll follow up"), but by not doing this on such a large platform, companies risk looking like they don't care.

    Here to help

    If you need help developing a strategy for growing your business with reviews, please get in touch.

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