By Ron Goldblatt, Owner/Founder NorthShore Loyalty
Small businesses must use every
tool at their disposal, if they want to stand a chance against the big retail chains. In
the digital age, one of the most powerful and sometimes controversial tools in
existence is an online review. Sites like Yelp or Google and comments on social media sites like Facebook or Twitter continue to impact purchase decisions. Potential customers
use these sites as the first stop for anything from an attractive dinner spot, places to shop or to find a skilled contractor.
A study done by market research company Dimensional
Research found out that positive online reviews influence purchasing
decisions of 90 percent of consumers. If you are one of those people who assume
that most online reviews are fake, you will likely be surprised to learn that
89 percent of customers actually view online product and service reviews as trustworthy.
Harvard Business School Assistant
Professor Michael Luca determined
that “each rating star added on a Yelp
review translated to anywhere from a 5 percent to 9 percent effect on revenues.”
He went on to add that his findings are most important for small businesses
with more modest marketing budgets.
Big chains spend millions of
dollars to establish a certain image in the customer’s mind, and their formulaic
approach to business means that customers know what to expect when they walk
through the door. “This is one reason why consumer demand is shifting from
chain to independent restaurants in the period following the introduction of
Yelp,” Luca writes in his research paper, commenting on the dramatic positive
impact a good online review can have on a small local business.
Unsurprisingly, the opposite is
true as well. A single 1-star online review can turn off as much as 87 percent
of potential customers, discovered a BrightLocal
study. But even a single star can cost a restaurant as much as 9 percent of its revenue.
Stop Neglecting Online Reviews
Despite the apparent importance
of online reviews, only half of all business owners surveyed
by Yodle, a New York-based Internet marketing company, think getting positive
online reviews is important. The same study also found only 13 percent of
small businesses ask customers for online reviews in the first place. It then
hardly comes as a surprise that only one in three small business owners spends any time at all monitoring their web reviews.
Brodie Tyler from Duct Tape
Marketing has discovered,
“The top 3 listings in Google’s local search results have an average of 472
percent more reviews than listings 4-6,” adding, “A listing in the top 3 Google
local results has an average of 7.62 reviews, compared to just 1.61 reviews in
results 4-6.”
And it’s not just online reviews;
social media comments on sites like Twitter, Facebook, and Google+ also have a
huge impact. According to research released Thursday by ForeSee
Results, social media content prompted 18 percent of website visitors to
stop by the URL. As marketing consultant Brian
Honigman says, “Links to your content on Facebook, Twitter, LinkedIn, Google+,
YouTube, and other social networks help the search engines understand what
websites are credible and should be ranked for what keyword phrases.”
The Plan of Action
At this point, the plan of action
should be obvious: start asking your customers for online reviews as soon as
possible. But do so in a way that’s productive and helps you reach your goals
the fastest and most efficiently.
We at NorthShoreLoyalty have a suite of programs designed to help you ask reviews and filter them
according to their rating before they appear on your Google or Yelp profile.
This way, you can proactively solve any complaints
before they appear on the web. We also give the customer an option to post the
review on their Facebook or Twitter accounts so all their friends see it. Visit
our
website to learn more about our services.
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