Business owners know that negative reviews hurt and positive reviews help. Happy customers bring in other happy customers, and online reviews are the new word-of-mouth. Still, plenty of business owners continue to underestimate the power of the online review.
There is a gap between how much consumers value reviews and how much business owners think consumers value reviews. Between business owners, there is another gap between those who pay attention to reviews and those that don’t. These gaps have competitive consequences.
Without a review strategy and clear understanding of online reputation best practices, businesses are losing out to more savvy competitors and missing out on potentially significant revenue.
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The competitive advantage in ratings and reviews.
According to a research report created by SOCi and the Local Search Association (LSA), the majority of consumers will pass up a business if it, “doesn’t have enough stars,” with most consumers saying 3.5 stars is the minimum required for a consumer to consider a business. Business owners, on the other hand, believe consumers are less demanding than they actually are. When asked how many stars they thought consumers wanted, 41 percent of business owners said that 3 stars was enough.
When consumers say a business “doesn’t have enough stars” it could mean it has fewer than 3.5 stars, but it could also mean the business has a lower rating than a competitor. If all your competitors have 4 stars and your business only has 3.5, consumers are likely passing up your business in favor of the competition.
Do you know how your competitors rank in ratings and reviews? Combing through every competitor’s reviews is time-consuming, but SOCi has a solution. Using the SOCi Reputation module, users can see competitors’ total reviews, average review rating and average response time. By comparing these numbers to your own ratings and reviews, you’ll be able to see where your business needs to improve — or where you’re already winning.
Reviews are the number one factor in buying decisions.
In the report SOCi created with the LSA, we asked consumers which factors influenced their buying behavior. The top factor was positive online reviews; ahead of discounts, business location, and recommendations. According to this data, a business with good reviews can beat out a business with lower prices or a more convenient location.
Still, plenty of business owners are reluctant to acknowledge reviews as a top factor in purchase decisions. In the aforementioned report, we asked business owners if they agreed with the statement, “reviews strongly affect consumer purchase decisions.” 39 percent of business owners were uncertain or disagreed. That’s 39 percent of business owners who don’t prioritize reviews. For savvy business owners, this reveals an opportunity to get a leg up on 39 percent of the competition in an increasingly important category, reviews.
Review response makes all the difference
Review response is another area in which business owners can find a competitive advantage. Despite the fact that 40 percent of consumers expect a response within 24 hours, nearly 40 percent of business owners reported that they respond later than 24 hours or not all. Business owners who respond to reviews within 24 hours can get ahead of 40 percent of the competition, and at the same time, improve their own star-rating. That’s because 89 percent of consumers express a willingness to change a bad review depending on how the business responds.
So, how can you start being a more review-conscious business owner? You can put your business on the right side of the reputation gap by paying attention to reviews and ratings just as you would revenue and expenses. Tools like SOCi can help you stay abreast of competitor ratings and reviews and show you areas for improvement. For example, competitors may be getting more reviews than you. If that’s the case, you might want to start asking customers for reviews after they make a purchase. If a competitor is responding more quickly than you are, it might be time to use SOCi’s review response tools.
Ultimately, monitoring both your and your competitors’ online reputation gives you the information necessary to make adjustments. Knowing your competitors’ online reputation will help you understand where they’re beating you, and where you need to improve. Knowing your own reputation helps make proactive changes that align with the needs of your digital-minded consumers.