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Inbound Marketing Blog


Research Shows Good Customer Reviews Means Increased Revenue

Posted by Andre' Savoie on Apr 9, 2012 4:24:50 AM

We’ve all heard the old expression that you never get a second chance to make a first impression. That holds true for both good first impressions and not so good first impressions.

Most of us think that negative comments or reviews about a business or service weight more in the minds of the consumer than positive comments. We know that a negative review can sink of a new business and an ongoing concern.

And when it comes to your online reputation , bad reviews can certainly hurt. And the fact is, there is no way to “remove” most bad reviews so you must put a plan in place to build positive reviews to drown out the bad ones.

Importance of Positive Reviews

The reality, however, is that positive reviews will enhance a new business or an older one in a positive way just like a bad review affects it in a negative way. Michael Luca, a Harvard business school student, recently discovered during the course of his research into the power of positive. You can read more about his research here, “Reviews, Reputation, and Revenue: the Case of Yelp.com” (link to http://www.hbs.edu/research/pdf/12-016.pdf?source=Blog_Email_%5bPositive%20Customer%20Re%5d) He found that a one star increase in yelp ratings leads to a 529% increase in revenues. He also found that the increase worked more for independent restaurants, for example, then for chain restaurants.

Consider the Medium as well as the Message

In the course of his research, he found that the way material is presented is also important. Customers react more strongly when information is presented visibly. Online shoppers do, in fact, research before making a purchasing decision, and those customer views play a very important role in customer decision making. Those reviews provide information about a specific product or service that lead to sales or damage sales.

If you own or manage a small business, you should work hard and long to find ways to use positive customer reviews throughout your marketing materials, especially your webpages. Those reviews should be placed where potential customers can easily find them on your site.

Good places for positive reviews would be:

  • Your homepage
  • A testimonials page on your website
  • Social sites like Yelp, Facebook, etc.
  • Google, Yahoo and Bing (in their “Local” profiles)
  • Third party sites such as Customer Lobby

Social Media

Of course, this new research dovetails nicely with the idea that social media is an important way to promote your business. Your customers, both the happy and the unhappy, will comment about your business through various social media, and potential customers read those to decide whether to do business with you.



Topics: customer review

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