Negative word of mouth keeps people out of local businesses. Good word of mouth, meanwhile, brings people in. That’s why it’s so critical for business owners to be able to monitor and manage what is considered today’s most potent form of word of mouth: online reviews.
According to an infographic released recently by customer satisfaction system Local Viewpoints, 72 percent of consumers trust online reviews as much as personal recommendations (from individuals whom they know). 57 percent will avoid a business that has negative online reviews or ratings, while a staggering 90 percent of people use and monitor online reviews in order to make buying decisions. Moreover, a word-of-mouth recommendation is the primary factor behind 20 to 50 percent of all purchase decisions – making it clear that reviews are, indeed, the new word of mouth.
Here are some of the other highlights of the infographic:
- In a study by market research company PhoCusWright, 78 percent of respondents said that seeing management response to online reviews made them believe that the local business cares more about them.
- Local businesses and companies with positive reviews can convert up to 183 percent more new business than those with either no reviews or negative reviews.
- It costs 5 times more to acquire a new client than it does to grow an existing one. (Which is why you, as a business owner, must always engage with customers who have written a positive / negative review about your business.)
- Consumption has gone mobile. There are currently more than 1 billion smartphone owners, and nearly 50 percent of consumers in the US use shopping apps and create a direct impact on sales.
These numbers once again serve to highlight the increasing impact and influence online review sites and review aggregators (like Yelp, Google, TripAdvisor, and Foursquare) have on consumer behavior. It’s clear that harvesting and managing online reviews can help a business grow – and enhance its online reputation.
Check out the Local Viewpoints infographic below:
(Infographic credit: Local Viewpoints)