“It takes 20 years to build a reputation – and 5 minutes to ruin it.” This quote by American business magnate Warren Buffett has been used a bunch of times to emphasize just how fragile reputation is. And you know what? It’s truer than ever, too – thanks to online customer reviews, which have become increasingly essential to business reputation. We’re living in the world where a one-star decrease in Yelp rating can mean significant revenue loss for a business – and a one-star rating improvement can do wonders. (Check out: “9 Effective Tips for Responding to Online Critics”)
It’s no surprise that Buffett’s oft-quoted statement was used again by rep management company Reputation Advocate released their new infographic: “Customer Reviews: Friend or Foe?” Here are some of the most important numbers highlighted by that infographic:
- 5 percent of bad reviews are written by customers who show no record of actually making a purchase. (According to this study, these customers are sometimes valuable, loyal fans who are acting as ‘self-appointed brand managers.’)
- People consider other consumers’ online opinions/reviews as one of the most trustworthy sources of information today. In fact, 70 percent say that they trust these reviews ‘completely/somewhat’; reviews are second only to ‘recommendations from people I know’ as consumers’ trusted information sources.
- Your business will be in a much better position to attract new customers if you have positive online reviews. Just how much better? Well, just take note of these facts: 73 percent of consumers say that good reviews make them trust a business more; 50 percent are also more likely to choose a local business after reading great reviews. Moreover, 87 percent say that high ratings and glowing reviews reinforce their decision to purchase a product or service.
- 67 percent of consumer read up to 6 online reviews before making a decision. Even more interestingly, 22 percent read at least 7 reviews, while only 11 percent take no notice of what’s being talked about in community-based review sites.
Needless to say, online review management (and monitoring) is more critical than ever in order to effectively manage a business’ reputation. For more facts and figures, check out the awesome infographic below, courtesy of Reputation Advocate: (Infographic: Reputation Advocate blog)