How to Grow Your Small Business with Online Reviews

Small businesses can struggle to get an edge over larger competitors.

They don't have the built-in name recognition of a big brand. Advertising dollars are limited. The latest technology is expensive beyond reach. And many aren't able to compete on price.

But there is one area that the big chains consistently overlook—online review sites like Yelp, OpenTable, and TripAdvisor. These sites can be the great equalizer by allowing small businesses to advertise a superior customer experience at little to no cost. 

And the best part? Most of the big companies don't get it.

I recently partnered with Jess Greene-Pierson, Director of Go To Market at the customer insight software firm, Womply. We facilitated a webinar to answer three key questions:

  1. Which review site do customers depend upon the most?

  2. How can negative reviews help your business?

  3. How can you earn more positive online reviews?

You can watch the webinar to get the full story, or read the highlights below.

Customer giving five stars in an online review.

Which review site do customers depend upon the most?

This data comes from a recent survey I conducted of over 1,000 adults in the United States. You can read the full story or just skim below.

The number one review site, by far, is Google:

Pie chart showing the most popular online review sites.

What makes it so popular is Google is the place to go when people search reviews without realizing they were looking for reviews. You can try this yourself with a little experiment:

  1. Think of a type of business you might need to find (restaurant, dry cleaner, mechanic, or anything else).

  2. Try Googling the type of business. Ex: "pet store"

  3. Notice what comes up after the ads.

Google suggests top-rated businesses with high ratings that it things are near you. The results show the star rating for each business along with a handy map.

A couple of years ago, I needed to find a pet store as I was driving through Tucson, Arizona. Look at what happens when I Google "pet store tucson." 

Google search results from “pet store tucson.”

Notice these are all local businesses. The big chains like Petco and Petsmart don't show up. This is the small business advantage!

How can negative reviews help your business?

Many small business owners live in fear of a negative review.

Customers exaggerate. Some reviews are fake. Negative reviews can feel like a personal attack. And even legitimate complaints stay online long after you've learned from the problem and fixed the issue.

The good news is negative reviews can actually help!

Researchers at Northwestern University discovered the optimum rating on an online review site is 4.2-4.5 stars. That's because 80 percent of customers seek out negative reviews when evaluating a business. They want to see what customers complain about and how the business responded.

During the webinar, Jess shared an example from Seafood Kitchen in Atlantic Beach, Florida. The owner, Nathan Stuart, regularly responds to negative reviews and asks upset customers to give the restaurant another try.

Slide from online review sites webinar.

One customer, Alvin F., changed a two-star Yelp review to four stars as a result of Nathan’s outreach. This is arguably more powerful than a five-star review because it shows a customer was upset (that happens) and the owner made an effort to make things right.

You can’t expect every customer to change their rating, but you can still make a positive impression on other customers by responding professionally and helpfully. It turns out, there's a quirk in psychology that makes other customers more likely to empathize with you if you handle the complaint politely without getting defensive.

How can you get more reviews of your business?

Jess suggested several straightforward dos and don'ts on the webinar:

Slide from online review sites webinar.

Yelp specifically forbids asking customers for reviews, but many major platforms are either silent on the issue or actively encourage it. Google, the most important site for reviews, actually publishes this guide to help you get more!

Take Action

To summarize, your business is more likely to get noticed if:

  • You have an active profile on Google and lots of positive reviews. 

  • A few negative reviews can give your business credibility.

  • Be proactive, but professional, about asking customers to review your business.

If you don't have an active Google My Business listing, you can easily get started with this handy guide from Womply.

You can also watch the webinar replay.

Do surveys devalue real feedback?

What’s wrong with this picture?

Okay, besides being a little blurry? The problem is the sign that’s placed in front of the register. It’s asking customers to fill out an online customer service survey. The survey, which arrived via email a few days later, contained a whopping 36 questions. I’ve previously written about this ridiculous survey.

Why can’t I just give my feedback to the person standing behind the counter?

Survey inducements like this at the point of transaction are everywhere. They’re printed on the bottom of our receipts. We’re asked to hold the line for an automated survey after calling a toll-free number. I recently saw a sign in front of a register with a QR code that you could scan with your smart phone to complete the survey right then and there.

And then there was this sign was at the checkout stand in a grocery store. It led to a Seinfeld moment where I wondered whether or not I had insulted the checkout clerk by not ringing the bell.

All of these feedback requests seem to discourage us from providing our feedback directly to the person serving us. Missing out on this opportunity can be a costly mistake.

Here’s why:

Surveys can annoy customers

Customers are being inundated with surveys. What’s worse is the surveys are often too long, ask poorly-worded questions, and don’t result in meaningful changes. In some cases, the drive to get more responses leads to some bizarre behavior.

I was recently accosted by a store employee named Jacob asking me to fill out a survey about the service he provided. He even wrote his name on the piece of paper he handed me with the survey instructions. The problem with this scenario was my only interaction with Jacob was when he asked me to complete the survey. I had actually been served by someone else.

In a recent post on the CX Journey blog, guest poster Sarah Simon advised companies to “put the customer’s need for peace and quiet above your need to drive higher response rates.” The post outlined some excellent steps for ensuring a voice of the customer initiative was actually a good experience for the customer.

Surveys can delay problem resolution

Smart companies incorporate closed loop feedback into their survey process so they can reach out to unsatisfied customers and solve problems.

A colleague of mine recently used a survey to share her displeasure with being charged $20 to repair an $80 necklace she had purchased from a department store just five months earlier. The store manager followed-up via email to apologize and let my colleague know that the $20 repair charge had been refunded.

The survey helped the store recover from a service failure, but there were opportunities to fix the problem sooner. The store could have had a policy that made these types of repairs free. My colleague expressed her displeasure with the repair charge to the sales associate who rang up the repair, but that person didn’t take any action.

A survey should be a safety net, but not the primary means for identifying and resolving problems.

Surveys can increase the cost of resolution

Waiting to capture customer feedback via a survey can also increase the cost of resolving a problem.

Years ago, I experienced a service failure at the Sir Francis Drake hotel in San Francisco. A simple apology would have sufficed at the point of contact, but that didn’t happen. The ultimate cost of recovery after a few bungled attempts to make it right was a three night stay in the hotel.

Recovery costs rise because customers feel increasingly wronged the more time and effort they expend trying to get a problem resolved. Upset customers also provide negative word of mouth by sharing their story with others. Yes, a survey is a nice way to collect feedback, but it’s much better to have employees focused on spotting and solving problems immediately.

I’m a big fan of surveys and acknowledge their importance as a tool for continuosly improving customer service. And, as an excellent post on the Help Scout blog recently described, there are ways to do surveys right. I just happen to be an even bigger fan of the person serving me taking care of business right then and there.

How to respond to online complaints

It can feel like a personal attack when customers criticize your company in online forums such as Yelp, Trip Advisor, or even on Twitter. Our first impulse might be to fight back by writing a scathing response that sets the record straight on their so-called “facts” and tells the rest of the world this person is an idiot. While this approach may feel cathartic, it will probably do more harm than good.

Here’s a better way to handle online complaints:

First, take a deep breath

Your priority should be preserving your business’s public image. Trading barbs with a customer in an online forum generally has the opposite effect, so it’s best to give yourself a moment to calm down before responding.

Patrick Maguire’s I’m Your Server, Not Your Servant blog recently featured an incendiary restaurant review, an equally incendiary response from the owner, and a follow-up interview with both the reviewer and the restaurant owner. It’s fascinating to gain a better understanding of both parties’ point of view, but it’s also interesting to note that the majority of the commenters felt both were in the wrong. (Read the post here.)

In an example of a worst case scenario, a bookstore owner infamously found herself arrested on battery charges after she confronted a reviewer in person (Read the article in Inc. Magazine). The ensuing press coverage, with article titles like “Angry store owner assaults Yelp reviewer,” was far more damaging to her business than a single reviewer giving the store two stars.

Second, respond strategically

When you respond to an online complaint, you’re not just responding to the complainer; you’re responding to anyone who reads your response. With this in mind, your goal should be to send a message that your business cares about service and you are eager to address any shortcomings.

Here are three tips that consistently work:

  1. Respond quickly
  2. Assure the reviewer (and anyone else who is reading) that you want to help.
  3. Provide a way for the reviewer to contact you privately so you can attempt to resolve their issue.

This approach works whether the complaint is written by a legitimate customer or a jealous competitor who is trying to hurt your business. Either way, it sends a signal to other readers that you are responsive, professional, and care about your customers. You won't win over a vitriolic jerk, but you will win over people who might otherwise have been persuaded to stay away from your business.

Third, look for the hidden truth

Nearly every complaint contains some kernel of truth that you can use to improve service. That’s not to say that you have to agree with everything the person writes about your business, but what if their complaint is really just the tip of the iceberg? Perhaps other people feel the same way, but haven’t voiced their opinion yet. Even worse, they may have just stopped doing business with you. (See more on avoiding icebergs.)

When you think of it that way, someone flaming your business online might actually be doing you a favor. For example, the bookstore owner might have noticed that her critics consistently mentioned that the store was messy and in need of a good cleaning. Even some of the positive reviews agreed that the store could be better organized. Rather than getting defensive, a smart business owner might have taken a day to thoroughly clean and reorganize her store. She could have then responded to all of the Yelp reviewers to thank them for their feedback and invite them to come back for a grand re-opening.

For more information, check out my whitepaper on engaging customers via social media or get a copy of Micah Solomon's outstanding book, High-tech, High-touch Customer Service.

Closing the loop on customer feedback

If you collect customer feedback, or are thinking about implementing a feedback collection system such as a survey, consider adding in one essential component: a way to close the loop.

What is closed loop feedback?

Unlike anonymous feedback, closing the loop allows you to circle back with individual customers. Knowing how a specific customer feels about your product, service, or their latest interaction with your business can allow you to fix a problem, ask additional questions to dig deeper into a particular issue, or simply thank them for their business.

Why use closed loop feedback?

Let me give you three quick examples that illustrate the value of closed loop feedback.

A delivery driver for an express shipping company left a case of wine on my doorstep one day. Aside from failing to get the required adult signature, the driver subjected the wine to potentially harmful heat by leaving it outside. The shipping company never solicited my feedback, so I never bothered to tell them about this incident. However, the next time I ordered wine, I told the winery about my poor experience and insisted that they use another shipper. 

A termite inspector was overly pushy on two occasions, so when it came time again for another inspection I called another company. The termite company never bothered to follow-up with me to ask for feedback on the inspection or to remind me it was time to schedule another one, so they lost my business rather than giving themselves a chance to earn it back.

My wife and I had a poor check-in experience at a hotel that made it unlikely that we’d return. A few days after our visit, I received a follow-up email from the Front Office Manager in response to a survey I completed. He was closing the loop! In his email, he apologized for the poor experience, thanked us for our candid feedback, and offered to comp our room on our next visit. We ended up taking him up on his offer and even traveled with a friend who also booked a room at the hotel. The free room more than paid for itself after we visited the hotel bar, dined at their restaurant, and our friend paid for her room. Even more important, the Front Office Manager prevented us from taking our business to a competitor by closing the loop.

How to implement a closed-loop feedback system

There are many ways to do it, but here are a few you can easily implement:

Add an optional question at the end of your survey that allows customers to provide their contact information and give you permission to follow-up. Hotels often do a great job of using this technique.

Call or email customers in your database to ask them for direct feedback on your product or service. Netflix provides a great example, where they periodically email customers a one question survey such as, “When did this video arrive?” along with an invitation to contact them if more assistance is needed.

Ask customers in person. Why not ask for feedback directly when you have face to face contact with your customers? The technicians who work for Ideal Plumbing, Heating, Air, and Electrical always ask if everything is okay and if there is anything else they can do. 

Taking a look through the customers' eyes

On a recent trip, a stop in the hotel gift shop reminded me that companies all too often fail to see things from a customer's perspective. This myopia can lead to frustration, poor service, and sometimes humorous consequences. Check out the picture below and note the third option down.

I'm sure they meant "assorted" but that's not how I read it in the store. You can only imagine a frustrated manager scratching his head and saying, "I don't understand it, these fruit stix just aren't selling!" A simple look at this sign through the eyes of a customer would help that manager spot the problem instantly.

Here are a few other examples (OK, pet-peeves) that are definitely not customer-focused!

  • Entering an account or credit card number into an automated phone system so they can "better serve you" only to have to repeat it when a live person answers the phone.
  • Cashiers who hand me my change with the coins on top of the bills, especially in the drive-through line. You have to be careful to catch the coins before they go flying!
  • Airline workers and cashiers who ask to see my identification and then don't look at it. (I once showed a cashier my zoo pass with a picture of a gorilla on the front and he didn't even blink.)
  • Employees who respond to a question that begins with "Where is..." by pointing in that thing's general direction rather than helping me find it.
  • Valet parking attendants who leave my seat all the way back and my radio blasting on a station I don't listen to.

Starbuck's listens to me (and you) with Pike Place Roast

Starbucks launched a new roast today in response to customer feedback about their often burnt-tasting brews. I was an unwitting 'early adopter' when I stopped by a Starbucks this morning and tried a cup. To my great surprise, it was very good. As in, the best cup of Starbucks coffee I've tasted in a long time good.

Starbucks launched the new flavor after soliciting extensive customer research. They are also reconnecting, it seems, with the reason many people started going to Starbucks in the first place -- the taste of the coffee.

"We are returning to the very best elements of our heritage and bringing back the simple romance and excitement of coffee,” said Howard Schultz, chairman, president and ceo. You can read all about the Pike Place Roast here.