How Online Reviews Can Either Make Or Break Your Business?
Online reviews help us decide where/what to eat, what to watch, what to buy, and what to sell. They have become an integral part of who we are as consumers and business owners. They have a huge impact on how well businesses do or don’t do. They have become the go-to way to make decisions about places we have never been and with the seemingly endless amount of options we have as consumers nowadays, they are one of the only ways to narrow down our choices as consumers. The infographic below shows how consumers read and use online review sites in numbers.
Facts: 68% of millennials trust online reviews most, as opposed to 34% who trust television advertisements and on average they produce an uprise of 18% in sales. In addition, 90% of consumers read less than 10 reviews before forming an opinion about a business which means these decisions being made are made quickly, without much hesitation.
Impact of reviews: Online reviews have a huge impact on both businesses and consumers. The impact can be positive or negative. For example, for every star a business gets in their rating, their sales revenue will increase from approximately 5-9%. At the same time, 22% of consumers will not purchase a product after reading just one negative review about it.
Impact of reviews by industry: The top five industries to be affected negatively by online reviews are: restaurants, hotels, doctor’s offices, hospitals, and hair salons.
Fake reviews: A common misconception about online reviews is that they are all genuine reviews. This is simply not the case. Only 27% of consumers will trust an online review if they think it is authentic even though a whopping 30% of online reviews may be fake. In fact, New York regulators settled with 19 companies for $350,000 in total fines in a crackdown on fake reviews.
Travel, Health, Restaurants & Jobs: User reviews are used widely by travelers and 59% of consumers say that review sites have the most influence on their booking decisions. Another industry where online reviews are extremely present is the health industry. A whopping 84% of patients say that they use online reviews to evaluate doctors. In addition, restaurants are another industry where online reviews are highly prominent. 61% of consumers have read online reviews about restaurants. This is more than any other business. Lastly, when people are searching for a job, it has been found that 83% of these job seekers are likely to base their decision on where to apply on company reviews and 76% of professionals claim to research a company online before considering a job opportunity.
Best online review sites by industry: There are tons of online review sites in the internet world but they are not all created equal. The best online review site is also different depending on what is being reviewed. For jobs, Glassdoor is in the top spot. For tech, CNET Radio is best. For hotels and motels, Trip Advisor is your best bet. For movies, IMDB. For restaurants, Yelp is number one and for health, Zocdoc comes in first.
Case study analysis: Through some case study analysis we found out just why some of these websites are the best. We found that restaurants that boost their Yelp rating by one star can increase their revenues by 5% to 9%. Furthermore, 98% of consumers found that TripAdvisor hotel reviews accurately reflected their actual experience and 61% of Glassdoor users report that they seek company reviews and ratings before making a decision to apply for a job.
Influence of social media on online reviews: It has become quite apparent that social media now has a huge influence on consumers nowadays. In fact, 55% of consumers use Facebook as a place to learn more about brands and when retailers replied to negative reviews on social media and online review sites, a third of customers either delete their original negative review or even replace it with a positive review.
Special thanks to brightlocal.com for insights on user reviews.
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