Why You Need to Reply to Online Customer Reviews

Ignoring online reviews can be a big mistake.

A 2019 report from the customer insight firm, Womply, revealed small businesses that reply to at least 25 percent of its customer reviews earn 35 percent more revenue than their peers.

This is a huge number that's hard to ignore.

Womply's researchers analyzed data from more than 200,000 small businesses across multiple industries and discovered some interesting conclusions. 

• A 4.5 star rating is better than a 5 star rating.

• Just 19 percent of reviews are negative.

• Businesses with at least 9 recent reviews earn 52% more revenue.

You can read the entire report here.

Let's take a closer look at why responding to reviews drives revenue growth and how you can do it gracefully, even when the reviewer is angry, mean, or unfair.

How responding to reviews increases revenue

There are two ways responding publicly to reviews can grow your business. 

1. Improve your search rankings

2. Send a positive signal to potential customers.

Improve your search rankings

Online review sites are also search engines. People actively look for businesses like yours on Google, Yelp, Facebook, OpenTable, TripAdvisor, and others. Most offer free listings for businesses. 

Womply's research found that just claiming your free Google listing can grow your revenue by 10 percent!

My own analysis confirms that Google is the most important listing site for a small business because it's the search engine customers use most often, even when they aren't specifically looking for reviews.

Here's the kicker.

Google is pretty clear that responding to reviews will improve your search ranking. One analyst estimates that actively responding to customer reviews accounts for 15 percent of Google's SEO algorithm for local businesses.

Let's say I'm in Austin, Texas and I want to find a coffee shop. 

Notice how Google serves up a map at the top of the search results along with three businesses that have high ratings:

Imagine how many more customers would find your business if you could get it on that map!

The Hideout Coffee House and Caffe Medici both have over 200 reviews, but the Capital One Cafe has just 32. So how did the Capital One Cafe get one the list?

One explanation is a high response rate to recent reviews, which helps it get ranked higher in the results.

You may notice that Capital One Cafe is part of a major corporation, Capital One. It’s actually unusual for a large corporation to respond to online reviews like this. Most haven’t caught on yet.

So ask yourself this question: Can you do a better job of responding to customer reviews than Capital One can?

Of course!

Send a positive signal to potential customers

Womply's research revealed that businesses with a 4 to 4.5 star rating earn 28 percent more revenue than average. That's even better than businesses with a perfect 5 star rating!

Why is 4.5 better than 5?!

The answer is trust. Many customers seek out negative reviews. They want to know what people complain about to see if there's a consistent trend or just a few grouches. When a business has a lot of reviews, but no complaints, something seems fishy.

Here's where responding to a review can really help.

The response isn't necessarily for the customer who writes the negative review. It's for all the other customers who read the negative review and your response. Research shows that customers are more likely to be empathetic to you and your business if your response to a negative review is polite and professional.

And you might even change a customer's mind. Here's a powerful example:

Image credit: Womply

How to respond to an online review

It's always important to be polite and professional when responding to an online review. The specific way you respond depends on the type of review you receive. There are three general types:

1. Happy customers

2. Neutral customers

3. Unhappy customers

I'm going to use one of my favorite companies, Ideal Plumbing, Heating, Air, and Electrical, to show you how a small business can effectively respond to different types of online reviews.

First, we'll look at a review from a happy customer. Ideal does a great job of acknowledging the customer and thanking them for their review.

There’s a few things to notice about the review:

• The response thanked the customer.

• It acknowledged the customer’s feedback.

• The reply was sent quickly.

The next type of review is from a neutral customer. This particular customer gave three stars, acknowledging Ideal's excellent work while complaining about the prices. 

Notice the friendly and helpful response.

• It sincerely thanked the customer for their review.

• The response called the customer by name to make it more personal.

• The reply politely offered an explanation for Ideal’s pricing, without getting defensive.

Keep in mind customers aren't reading these reviews in isolation. You'll notice the review right below it commends Ideal on sticking to the budget. So a potential customer might think that Jeffrey is a lot more price-sensitive than other customers like John who value fast service and high quality work.

The final review is from an unhappy customer. Some unhappy customers may have a legitimate gripe, while others appear to be unreasonable. And yes, a few even lie.

The review below is from a someone who didn’t even use Ideal’s services!

This person was upset about Ideal's charges for emergency air conditioning service on a very hot Saturday. Ideal's response is still positive, friendly, and helpful to other customers who might be reading the review:

There are a few things I really like about this response:

• It comes directly from the owner, Don Teemsma.

• Don adds important context that would be helpful to other customers, without getting defensive.

• He politely explains the fees while acknowledging the customer’s urgency.

Will this response change the angry customer’s mind?

Probably not. But that’s not really the point. Don’s polite and measured response likely assures other customers reading the review that Ideal is an honest business that takes good care of its customers.

I have personal experience with this situation.

Last year, I woke up on a Saturday morning to find my own air conditioner had stopped working. It was going to be one of the hottest days of the year, and I was truly worried about the heat.

I called Ideal first thing in on a Saturday morning to schedule the repair, knowing full well that Ideal was going to get a lot of calls just like mine that day. Fortunately, Ideal is very responsive. Phil, one of Ideal’s friendly and capable HVAC technicians, came out to my house and got my system working again before noon!

That type of service was definitely worth a premium!

Online Review Resources

There are a number of resources that can help you leverage online reviews to grow your business. Womply's report is a good place to start.

You can also watch a webinar with Jess Greene-Pierson, Womply's Director of Go To Market, where we talk in-depth about using online reviews to grow revenue.

Want to really dive in? You can take my LinkedIn Learning course, Serving Customers Using Social Media. There are three ways to watch the video:

• Use your LinkedIn Learning subscription to watch it for free.

• Access the course at no charge with a 30-day LinkedIn Learning trial.

• Purchase the individual course.

Here's a short preview.

Welcome from Serving Customers Using Social Media by Jeff Toister

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.

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:

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." 

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.

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:

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.

Why Two Stars is the Worst Rating

It's never fun to receive a one-star review.

No business leader likes to see an angry customer posting in public. That one-star review can harm your company's reputation and might discourage new customers. But the reviews you should be really concerned about are the two-stars.

In this short post, I'll attempt to explain why.

Let's start with something a bit counterintuitive: a few negative reviews can help your business. 

Research conducted in 2015 by PowerReviews and Northwestern University found that consumers are most likely to buy from a business with a 4.2-4.5 average star rating. That's because a business with a few negative reviews seems more authentic, and over 80 percent of customers specifically seek out negative reviews. 

(More: How to Respond to Negative Yelp Reviews)

So what's the difference between a one and a two-star review? Let's look at recent reviews from a popular restaurant in San Diego. As of this writing, it has 2,503 reviews and a four-star overall rating.

Here's a one-star review of this restaurant from Travis M:

People often write one-star reviews like this as a way to express anger at a service experience, rather than a true review of the business. When you break it down a bit, you'll notice a few things that detract from the review's credibility.

• The customer didn't actually dine at the restaurant.

• This is the only Yelp review written by this user.

• The nearest Jack In The Box is over a mile away, and is not a comparable alternative.

The reviewer also wrote that getting seated immediately is rare, which indicates some repeat business. If this restaurant was legitimately a one-star experience, why would you keep coming back? Chances are, this customer was really upset about their experience and wanted to punish the business. 

Now let's look at a two-star review from Kat C written just four days earlier:

This review is much more credible than the previous review, for a few reasons:

• Specific details are given, giving a sense the review is accurate.

• Some positives are mentioned, such as the taste of the Kobe burger.

• The reviewer has 91 Yelp reviews.

Unlike the one-star review, this one is a bit more measured. The gist is the service is very slow and the food is hit or miss. And the two-stars make the review feel like the customer was trying to be fair.

Side note: The damning part is the three-star review immediately before this one and the five-star review immediately after it both mention slow service. And despite a four-star average, when you filter for just recent reviews the restaurant's rating dips to about 3.8.

You don't have to take my word for it. Try reading one and two-star reviews of businesses in your area. See which ones tend to be more credible and let me know what you come up with.

Bonus Resource

You can learn more about serving customers via social media from my LinkedIn Learning training video:

Welcome from Serving Customers Using Social Media by Jeff Toister

The Most Important Review Site for Small Businesses

Love them or hate them, online review sites are an important part of small business.

Customers use sites like Yelp, TripAdvisor, and others to search for businesses like yours, read customer reviews, and even leave feedback. In fact, a 2018 study from BrightLocal found that 86 percent of US consumers use online reviews to help find local businesses.

The challenge is there are so many review sites that it's hard to know where to start. And you have a small business to run, which means you don't have a lot of time to mess around.

Fortunately, I've done the research and found which one site customers rely on the most. Here are the results along with how you can easily take advantage of these insights.

The Most Popular Review Site

I surveyed 1,004 adults in the United States in January 2019 to ask which online review site they rely upon the most. Google is by far the most popular.

There are two caveats to be aware of.

The first caveat suggests Google’s percentage may be overinflated. I used Google Surveys to do this study. It gives you a fairly random demographic sample, but in this case it also increases the likelihood that respondents would prefer Google, since they found my survey on Google. That's a huge grain of sand to keep in mind as you look at the data.

Just to check the results, I conducted an informal survey within my own network. And guess what? Google was still tops, followed by Yelp and then Facebook.

The second caveat suggests Google’s percentage may be underinflated. Think about how you naturally search for a business. I recently went to a used furniture store to look for a new table for The Overlook. When I got there, the store was unexpectedly closed so I needed to find somewhere else to go.

Instinctively, I opened the web browser on my smartphone and Googled "used furniture store." Google instantly gave me a list of stores near my location along with their ratings.

According to HubSpot, Google owns 70 percent of search engine traffic. That number jumps to 85 percent for searches on mobile devices. In other words, Google is how customers search for reviews when they don’t realize they’re searching for reviews. 

What Can You Do About It?

The first thing you should do is claim your free business listing on all the major platforms your customers use to look for you. While Google is the most popular, the other sites get their fair share of traffic, too. Womply has published some helpful guides.

Make sure you respond to every review a customer leaves you. Keep in mind your response isn’t just to the reviewer; it’s a signal to other potential customers that you care about service. BrightLocal's data reveals that 89 percent of customers read business's responses to reviews. 

Now here's where focusing on Google can pay off. Remember how I quickly found a highly-rated used furniture store by searching on my smartphone? 

Google uses reviews to help prioritize which businesses it shows when potential customers search for businesses like yours. So you can improve your search rankings without hiring an internet wizard. All you have to do is work on getting a lot of good reviews for your business. And here's the kicker—unlike Yelp, Google is perfectly okay with you encouraging customers to write reviews!

The company even provides this helpful guide.

More Resources

Here are a few additional resources to help you drive more customers to your business with online reviews.

• How to Attract More Customers with Google My Business

• How to Find Trends In Your Survey Comments

• Using Yelp Reviews to Improve Your Business

You may also benefit from my LinkedIn Learning course, Serving Customers Using Social Media.

Welcome from Serving Customers Using Social Media by Jeff Toister