Why are online reviews important for local business?
Since the dawn of commerce small businesses and their customers have always relied on recommendations, and that's still true today. However, while prospective customers still value what other people have to say about a local business, their products and services, what’s changed is how people get that information. It's now less about word of mouth, and more about online reviews.
Online reviews are now such a significant part of prospective customers' decision making process, that they can make or break your local business.
In order to trust your business, people need to see recent reviews - and plenty of them. Over half of consumers will only use a business if it has online reviews and a minimum of four stars awarded on those reviews. What’s more, positive online reviews make almost 7 in 10 consumers more likely to use a local business.
So if you’re not making online reviews a priority but a competitor is, you’re going to be losing out.
Here are 11 reasons why online reviews are important for your local business.
1. Online review signals are a significant local ranking factor
Online reviews (along with an owner’s response) show prospective customers that they can trust a business, and trust is a foundational factor in ranking. According to Whitespark's Local Search Ranking Factors survey, review signals including quantity, velocity, diversity and star rating make up the second-most important local ranking factor. So you’ll need a regular influx of reviews to achieve good rankings in local search results.
Most shoppers will look on search engines like Google and Bing, or even on Facebook, when deciding who to buy from. These websites all have unique ways of indexing and surfacing content, but they all place high value on original and new content, and reviews form part of new content.
2. Online reviews are everywhere
Online reviews don’t just live on review platforms. They form an integral part of the much broader marketing landscape, which makes their prioritisation all the more important. Reviews really are multi-functional and are increasingly being deployed across various channels and both online and offline including business websites, ad campaigns and printed promotional materials.
According to Social Media Today, almost two-thirds of shoppers think that online reviews are an essential part of the decision-making process. When they want to know the best places to go, they’re more likely to turn to Google, Yelp, and TripAdvisor than they are to a newspaper or even their friends and family.
With so many channels available nowadays, reviews on websites are always good, but happy customers are going to share their thoughts on more than one platform, increasing the multi-channel footprint and visibility.
3. Online reviews will happen with or without you
Online reviews are the modern equivalent of a word-of-mouth recommendation and will happen whether or not you make them a priority for your business. It is rapidly becoming the norm for prospective customers to read online reviews as part of their research and decision-making process.
According to research many shoppers distrust businesses that have ratings below (or even above) four stars. Companies with higher average ratings are significantly more likely to find that views are converted to traffic and sales. This highly positive footprint will eventually help to drive more sales. 62.7% of consumers believe that online reviews are "important" or "very important" when choosing a local business.
It’s also worth noting that according to Fan and Fuel 73% of customers place more value on the written review, rather than they do on the star rating itself.
4. Online reviews are trusted
According to Blake Morgan on Forbes, "one of the most important aspects of customer experience is trust. Customers simply don’t want to do business with a company they can’t trust. For industries that are built on the foundation of trust, there isn’t a lot of trust happening these days. In fact, consumer trust in many of these industries is at an all-time low. It’s not due to one single event, but rather to slowly chipping away at the relationship.”
Consumers are more likely to make a purchase if other consumers, even total strangers, reinforce the purchase decision. This reflects a giant shift in today's consumer landscape, where customers, not marketers, are responsible for shaping the way your brand or business is recognised.
Ultimately, what customers say about a product or service in their online reviews - and the responses from the business/ brand - both influence the purchase decision more than brand marketing campaigns, paid advertising, and traditional customer acquisition methods.
Today, online reviews are not only the biggest source of social proof, they have a clear impact on sales by increasing a customer’s likelihood of buying from you.
Reviews make customers 71% more comfortable purchasing a product (3D Cart) and 92% of B2B buyers are more likely to purchase after reading a trusted review according to G2 and Heinz Marketing.
5. Positive reviews can help generate new business
According to HubSpot Research, 60% of consumers believed customer reviews were either trustworthy or very trustworthy — meaning that businesses that can accumulate positive reviews had a good chance of them helping a customer make a purchase decision.
Online reviews can even increase how much a customer will spend with you. Customers spend 31% more when a business has positive reviews say Broadly.
6. There are financial benefits to online reviews
Google’s research into local search behaviour concluded that local search has tangible financial benefits for business owners: 50% of local consumers conducting a local search on their smartphone visiting a local store within one day; and 18% of local searches lead to a purchase within one week, compared with just 7% of non-local searches.
7. The more, regularly updated online reviews, the better
Prospective customers expect to see a lot of reviews, with the majority expecting to read several online reviews before they feel they are able to trust a local business. They'll want to see at least 40 reviews before they trust your star rating. While quantity is a factor, but so is recency with prospective customers wanting to see fresh reviews. In fact, research tells us that 69% of consumers only trust business reviews left within the last month.
8. Google likes to see reviews
If you're running Google Ads, you’ll need dozens of reviews to activate their seller ratings ad extensions. According to Google these seller ratings help people searching on Google to find businesses that offer quality service, and can help advertisers improve ad performance and earn more qualified leads.
9. Prospective customers read your responses
How you respond to reviews is very telling and can make or break your brand perception. To take online reviews seriously as a sales and trust tool, you need to invest time in dealing with responses. ReviewTrackers state, 53% of customers expect a business to reply to their online review within seven days. Google also advises local businesses to respond to reviews, both good and bad: "Reviews from your customers can provide valuable feedback for your business, and replying to reviews can help build your customers’ trust.”
And again there’s a financial upside to handling reviews properly, with people spending around 49% more money at businesses that respond to their customer reviews (Womply).
10. Online reviews provide valuable insight that could improve your business
Customer reviews - both good and bad - are inherently valuable because they put you in your customer’s shoes and give you real-world insight into how your business can better serve them. And as Google points out, negative reviews can be the most valuable of all: "Negative reviews are not necessarily a sign of bad business practices. For example, the customer may have had mismatched expectations. Replying to reviews can help identify points on how to improve the experience for customers.”
11. A negative online reputation could kill your business
There are plenty of positives that come from prioritising online review management, including increased trust, a stronger reputation, and more new business. But a poor reputation can be equally impactful, but in a much more negative way with an estimated 40% of consumers avoiding a using a business with a poor online reputation.