Do Online Reviews Matter?
Conventional wisdom says that word-of-mouth is the best form of advertising. Online reviews are basically word-of-mouth advertising. However, instead of your customers telling only their closet circle of friends, they have microphone attached to the world’s largest PA system, the internet. In 2013, 85% of potential customers read reviews on local businesses to determine if the local business is good. Also, 70% of those people said positive customer reviews make me trust the business more. These are not insignificant numbers when considering you online reputation and how it can help or hinder your company’s growth. Lets look at an example. Say you run a small auto repair shop in Denver. The term “auto repair shop” is searched in Denver an average of 640 times per month. We factor out 25% of these searches are not potential customers. They could be competitors, sales people or potential vendors, bottom line is they are not going to spend money with you. Lets take out 25% more, just because I like to be conservative. We are left with 320 potential customers. Of those 320 potential customers 272 (85% read reviews) are going to read some reviews. Looking at the image below, which reviews do you think they will read? If you said Buchtel Motors and Weaver’s pat yourself on the back. Most people will only read reviews with a 4 star or higher rating.
Lets say 20% (54) of those people call Buchtel Motors and of those 54, 25% (14) schedule an appointment. Finally, of those 14 new appointments, half (7) of them end up being customers. Since Butchel Motors has a strong online reputation, they should be getting around 7 new customers a month from this single source. While this example is relatively elementary it does give you an idea of how important online reviews are. Additionally, you can plug in your own numbers for your company to see an ROI on your online reputation. In wrapping this up. Yes, online reviews matter and they should be part of your marketing plan. In the coming weeks I’ll be putting together a couple of blog post on how online reputation management can help your grow your positive reviews.