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5 Findings that Legitimize Online Reviews as the New Word of Mouth

Marketers and businesses of all kinds and sizes have embraced online review management as an important part of their strategy.

These days you’ll see local business owners becoming active and engaged on Yelp or TripAdvisor. Or enterprise execs and CMOs drilling down their review data and third-party feedback to improve customer experience.

Even marketing agencies, reputation managers, brand strategists, and search marketers are getting in on the act, crafting new ways to build a 5-star presence across multiple review sites (though sometimes not in the most ethical of fashions).

Why? The answer is simple: online reviews are the new word of mouth.

5 findings that prove reviews are the new word of mouth

Whether businesses like it or not, reviews are pretty powerful. They serve as a source of referrals – or a cause of customers churning. They also give voice to those who want to share their experiences, opinions, and feedback online – ready to be read by fellow consumers.

If your organization doesn’t yet have a review management strategy in place, consider these stats:

87 percent of potential customers won’t consider a business with negative reviews and low ratings

A new report on Search Engine Land demonstrates just how reviews can sway purchase decisions. According to the report, only 13 percent of consumers will consider buying from a business that has a 1- or 2-star rating.

This means that, for the remaining 87 percent of your potential customers, a low rating or bad review is akin to having a sign on your storefront that reads, “Don’t come in.”

Researchers from University have even gone so far as to describe these unfavorable reviews as a “condemnation to death” – especially for young local businesses that are just starting up and may not yet have collected a lot of reviews.

“At its early stages, a business is at the mercy of the subjectivity of its customers,” wrote researchers Oussama Fadil and Jake Soloff. “In theory, some businesses could die simply because they were first approached by the wrong customers; others could be overrated by similar mechanisms.”

Star ratings are important

The Search Engine Land report also asserts that star ratings are the most important review factor for consumers.

This shouldn’t come as a surprise: a recent survey by ReviewTrackers explored how diners perceived – and were influenced by – restaurant reviews and ratings. Here’s the key finding: as much as 33 percent of restaurant-goers wouldn’t choose to eat in a place that’s rated below 4 stars.

Star ratings seem to hold the same weight for consumers reading reviews of other product or service categories. Check these numbers out:

  • Only 13 percent of consumers will consider buying from a business that has a 1- or 2-star rating.
  • Local businesses with 3-star ratings will be considered by 57 percent of potential customers.
  • And 94 percent of consumers will consider local businesses with a 4-star rating.

Any less than 3 stars – and majority of customers will literally ignore you.

It’s obvious that these star ratings are a major factor in influencing purchase decisions, making it critical for business owners and marketers to go beyond merely tracking and responding to reviews – and expand their efforts to include proactively collecting customer feedback, measuring satisfaction and engagement levels, investing in customer support and employee training, and generating positive new reviews.

Only 8 percent do not read reviews

Sometimes people looking for information about your business may not necessarily end up visiting your website or watching your ad or clicking your landing page. But they actively seek out reviews, which is how they end up reading and sharing content on sites like Yelp, TripAdvisor, and Yahoo Local.

What do other customers say about your business? What kinds of customer experiences are they sharing online? Does the general customer sentiment make your brand look attractive or unappealing?

These are only some of the questions that your business has to address. Why? Because reviews – like it or not – shape to your brand reputation. And they’re more popular and accessible than ever.

According to the Search Engine Land report, as much as 92 percent of consumers read online reviews of local businesses to determine whether these businesses are good or not.

Of these, 73 percent read reviews using their PC (laptops or desktop computers), and 38 percent and 29 percent read reviews using their mobile phones and tablets, respectively.

Responding to all of these reviews is tough, but important. We’ve curated a list of the top Reputation Management Companies.

New reviews matter

If your organization doesn’t yet have a strategy for generating new reviews, it’s time to craft one. Otherwise, you’ll get left behind. The latest research shows that, for consumers, newer reviews matter, and review content may in fact have a shorter lifetime than expected, at least in terms of relevance and usefulness.

The Search Engine Land report found that:

  • 69 percent of consumers agree that reviews older than 3 months are no longer relevant.
  • The more recent the review, the better. 15 percent actually say that the only relevant reviews are the ones written within 2 weeks. Others – 69 percent, to be exact – are a little more flexible, saying that a review must be written within 3 months for it to be considered relevant.

Getting started on your review generation strategy? Here are 8 simple tips to help you generate more 5-star reviews.

80 percent think reviews are as trustworthy as personal recommendations

Back then, recommendations made by friends and family were the kind of word of mouth that consumers trusted and valued the most.

Then the review revolution happened.

According to the Search Engine Land report, approximately 80 percent of consumers now consider reviews as trustworthy as personal recommendations. That’s right: the words of anonymous Yelp or TripAdvisor users may carry as much weight as that uttered by close friends and loved ones.

This echoes earlier findings from a research study on the travel industry, where reviews and review sites were shown to rank ahead of traditional guidebooks and social media as a travel planning resource. A Forrester Research report, meanwhile, detailed how US consumers now place more trust on reviews than on natural search engine results, advertisements, and direct marketing messages.

With all these new findings, it’s certainly worth exploring how businesses might invest their efforts in review management – as much as, if not more than, in social media marketing and management. Another report, this time by Gallup, showed that majority of consumers do not engage with and are not influenced by brands on Facebook, Twitter, and similar social media channels, with 62 percent saying that social media had no influence at all on their purchase decisions.

“You have to care about online reviews,” wrote digital marketer Travis Balinas. “Positive reviews can help bring in customers, negative reviews can turn people away, and not having any online review presence can cause someone to feel like doing business with you would be a gamble.”

How does your organization manage online reviews? Do you have any tips and hacks to share with fellow local business owners?

Migs Bassig

Migs is the Content Manager for ReviewTrackers. He's a creative writer who has helped numerous companies communicate more effectively online, and he loves sharing his local marketing knowledge to help brands and business succeed.

Discussion

  1. Richard Pascal

    These numbers are really interesting and also – probably true. I see it time and time again how a small business can be ruined by one or two bad reviews. Don’t know what to think about that, to be honest – user reviews – useful or not?!

    Reply
  2. Mary Rose

    I have never even assumed that only 8 percent of people doesn’t read reviews. Can I see the link of that research? I’m highly interested in that.

    Reply
  3. spameater

    These are some very odd trends. Before, people used to like the new things that were opening in their area. Everybody wanted to see them and try them. Now, they just read the review on the site.

    Reply
    • WilmaP

      I agree with you. Reviews are taking away from you a joy of experiencing something new.

      Reply
      • georgeblanco

        I disagree, you still get to experience something new, the fact you read a review just serves as protection from having a bad, new experience.

        Reply
    • Veronica

      I find online reviews to be very helpful and do not really take away from the newness of trying a place for the first time. As a matter of fact, having a little foreknowledge of what to expect can actually enhance the experience.

      Reply
  4. medomoc

    It’s interesting how people rely on other’s experience rather than going and seeing for themselves. It’s OK to check the reviews but what suits the best for the most people it doesn’t mean that it will suit you.

    Reply
  5. moolahmachine

    I always check reviews before I visit a new restaurant. If it doesn’t have much reviews, it means it doesn’t have much customers, which is fine, but if it has small amount of articles and most of them are bad, it means that restaurant isn’t worth going.

    Reply
    • Karen Garcia

      I too always do that. And it doesn’t mean that I’m not trying out and experiencing new things if I go and see the reviews of a certain restaurant first. It’s new for me and I’ll have my own opinion about it; I just decided to give it a chance based on how people are satisfied with it.

      Reply
  6. Sammy J

    If you are doing proper business, there is nothing to be worried about negative reviews. Please your customers and they will give you good reviews, it’s that simple.

    Reply
  7. Guy Cleveland

    You need to be highly desperate to buy a product from a provider that has 1 or 2 starts or you desperately need the product that they are offering.

    Reply
  8. Gabby Dell from SC

    I never try a new place without checking its reviews on trip adviser or yelp… even if they have been recommended by a friend first.

    Reply
  9. Lee

    I thought it was interesting that a large percentage of consumers found reviews irrelevant if they were more than three months old. I agree that recent reviews are ideal, but I still find feedback relevant if it was posted within the last year.

    Reply
  10. ILoveMemes

    Reviews are the direct experiences of the user who opt a service. Of course they are the spread of word.

    Reply
  11. melg

    Rather than trusting the portals completely, people have a tendency to trust other peoples opinions and experiences.

    Reply
    • PattyT12

      Yes,as there are many eCommerce portals around trust is a definite factor to legitimize reviews

      Reply
  12. nealcal

    Reviews are word of mouth branding of any portal as they carry tangibility of a product.

    Reply

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