For small businesses, online reviews can determine whether a business enjoys long-term success or failure. Consumers use these honest evaluations from actual people to decide whether they’ll do business with a company.

According to BrightLocal’s Local Consumer Review Survey, 90 percent of consumers used the internet to find a local business within the last year, and almost 33 percent look every day. A staggering 82 percent of consumers read online reviews for local businesses before they patronize them. Additionally, only 53 percent of people would consider buying from a company that has less than four stars.

Source: https://www.brightlocal.com/research/local-consumer-review-survey/#Q13

In this article, you’ll learn seven reasons online reviews are imperative for your company’s reputation.

1. Google considers online review signals as essential ranking factors

Online reviews play a significant role in Local SEO, a signal that Google uses to determine rankings in its Local Search pack. These evaluations have increased in importance since modern consumers are accessing the internet differently.  According to the World Advertising Research Center and GSMA, most users will connect to their internet using mobile devices by 2025.

BrightLocal’s Jamie Pitman says Local SEO is a key reason small business owners should prioritize online reviews from their customers. Since more people search for businesses using their mobile devices closer to their physical location, it makes it harder for small companies to rank high in Google’s Local Pack. Additionally, Google pushes its Local Pack section above other results, allowing mobile users to view business hours, phone numbers, and reviews without having to visit the company’s actual landing page. 

According to Whitespark’s Local Search Ranking Factors Survey, review signals are the second most important ranking factor. It includes qualities such as frequency, quantity, and star ratings in reviews. 

Google uses data from review platforms to determine its local search algorithms. It expects companies to have reviews from unique sources, including its Customer Reviews, TrustPilot, Yelp, and other platforms. Review volume is also a local SEO factor, so to be highly visible, you’ll need a plethora of reviews from different customers.

2. Online reviews are critical marketing tools

People can find customer reviews everywhere, even outside traditional platforms. Having reviews on external websites lends more credibility to your business rather than to have them hosted on your own domain. These evaluations also affect the customer’s decision-making process and the buyer’s journey.

Today, many small businesses are using online reviews in creative ways, including integrating them into their marketing campaigns and public relations strategies. They use them as assets to help them gain consumers’ trust before they walk through their doors.  Some businesses share these reviews on their social media platforms and Instagram stories. Others use customer reviews in creative television marketing campaigns to reach more customers.

3. Customers trust online reviews from their peers to make buying decisions

Many smaller companies face increased competition from online monoliths like Amazon, Walmart, and Target. One reason consumers patronize these businesses is because of their great reputations.

Earning your customer’s trust is essential. Consumers won’t buy from untrustworthy companies. When business owners prioritize online reviews and reputation management, it gives them a distinct edge over their competitors. A prominent study found that most millennials don’t purchase products or services without first reading online reviews. Most read 40 reviews before doing business with a company.

When customers believe your small business has an excellent reputation, they take action.  It includes calling your store to find out more information about your products and services. Others visit the physical location of your store, book an appointment, or make a purchase.

A 2016 Harvard Business School study called Reviews, Reputation, and Revenue: The Case of Yelp.com, also discovered that a one-star increase in ratings correlated with a 5-9 percent more in revenues.

4. Positive reviews draw new customers to your business

Modern customers use a crowdsourced approach in their decision-making process. One research study found that 91 percent of consumers will buy from area businesses that have positive online reviews. They rely on these online evaluations since they can’t turn to a salesperson to gather information about the company’s products and services. This statistic shows there is a direct link between online reviews and sales.

Source: https://www.brightlocal.com/research/local-consumer-review-survey/#Q6

Honest feedback from reviewers helps customers realize customer service and product-related issues at the business.

Online reviews attract new customers because consumers are on their own when making a purchase. They also alert people about businesses that have excelled through people’s positive reviews. Customers are more likely to spend their money where most people have had positive experiences.

Consumers need to read a lot of reviews before they trust your star ratings, so your company should get as many reviews as possible. Most customers read an average of 40 reviews before they consider your star rating to be accurate. Additionally, consumers prefer freshness and quality regarding reviews. Some consumers will read a review that is only 14 days old before they’ll buy from a company.

5. Responding to reviews show customers you care about them

Source: https://www.brightlocal.com/research/local-consumer-review-survey/#Q6

If you don’t respond to your online reviews, you may neglect an opportunity to handle complaints and problems with your products or services. Almost nine in 10 customers read business responses to reviews, and 30 percent of consumers value their responses.

Google also considers the business’s response to good and bad reviews. When you reply to customers, your response will appear below a customer’s review on Google Search and Maps, under the label “Response from Owner” when they look at these comments.

6. Poor reputations can harm your business

Having a poor reputation can also decrease your company’s revenues. According to one statistic, 40 percent of consumers don’t want to use businesses with negative reviews. Today’s customers can go on a social media site and destroy a company’s reputation based on an incident they didn’t handle properly. The average social media user has 300 friends or more. If you have a product that costs $5, that review could have cost you $1,500 in potential business. When your products cost more, the revenue losses are infinitely more.

7. They help you learn how to improve your business

Online reviews can help you identify areas of your business where you need to improve. When a person has had a poor experience with your company, ask them about their experience. You can also learn how you can correct these problems.

Resolving problems shows people you care about the customer service you provide. Research shows that 95 percent of unhappy customers will purchase from companies that successfully resolve problems.

Additionally, your small business can solicit feedback from customers during a question-and-answer session. Some studies show open Q&A sessions have increased sales by 11 percent for companies. They also help you identify your most frequently asked questions about your products and services.

Does your small business need to improve its online reputation? Dialed-In Local understands you’re busy handling your everyday business tasks. Our professional reputation management service can help you gain positive reviews for your company. We’ll also respond to negative reviews and handle them when they occur. Our company will ensure your online reputation is stellar. Set up a consultation with us to learn more.

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