Most businesses acquire a reputation over the course of time. Whether that reputation is generated from a brand or from customers, maintaining a good reputation is the foundation of success for all businesses, large and small.
In any business there will always be incidences when a customer feels that they didn’t receive the best service or product and they share this experience online in the form of a business review. These reviews, whether true or false, can quickly tarnish a business reputation. Statistics show that a bad customer experience can result in a 22% drop in business.
Until recently, business communications have primarily been performed on a one-way street. Businesses spend millions of dollars refining their marketing strategies through brochures, or media advertisements. Despite these marketing campaigns, probably the most credible source of information available to potential customers about a business is through word-of mouth. Business customers have always shared their good and bad experiences with their friends and acquaintances. However, with the advent of the Internet, those same word-of-mouth experiences are no longer just between two or more individuals; they are now available to anyone with Internet access and can reach a potential of readers that number in the hundreds of thousands.
The availability of online customer reviews over the last five years has expanded exponentially. According to a recent survey by Rhode Island based Marketing Sherpa, 34-50% of U.S. Internet users over the age of 18 have written an online review about a business or product. Another survey by Ohio marketing agency BigResearch, found that over 92% of adults in the U.S. research products and services online before purchasing items in stores.
In light of these statistics it’s no surprise that reviews have created a cultural shift in how potential customers formulate buying decisions.
- 92% of your potential customers research your business first online. – BIGresearch
- 81% used reviews to choose between 2-3 alternatives. – Avenue A, eMarketer
- 84% were influenced by reviews in their purchase decision. – Opinion Research Corp.
- Reviews are the #1 factor when they consider your company. – comScore
- 20-87% more visitors who discover your company will become new customers. – Marketing Sherpa, Deloitte & Touche, e-Consultancy, BizReport, Bazaarvoice, Hanapin Marketing, WebVideo Vision, ClickZ
- Customer loyalty increases 18% – Foresee Results
- Customer satisfaction increases 21% – comScore
Generally, when people type a business or product name in the search engines, they are likely to see any reviews about that company or product on the first page. This happens because reviews play an important role for consumers that helps boost them up in the search rankings. Furthermore, because Internet users tend to click on a business or product review, their popularity escalates rankings. Clearly, a negative business review for your business could have substantial effect on both your business reputation and the number of your sales.
It’s common to believe that a single negative business review could never be that serious because you have many other loyal customers that like your business services, right? To better understand the seriousness of just one bad business review; please consider the following true story.
In 2005, Richard, the owner of “ABC Business, LLC (real name omitted) based in the Midwest US, woke up to find that when someone typed his business’s name into Google’s search engine, the fourth result listed by Google was a web page that read ‘Beware of ABC Business, LLC’. The author was anonymous but claimed to be one of his customers. The review described a very bad customer experience in great detail.
Richard was unable to verify who posted the negative review, leaving him to wonder if it was an actual customer, a competitor, or maybe even a disgruntled employee. Richard has since spent years soliciting positive reviews from customers in an effort to generate enough good information about his company to diminish the impact of this single anonymous, possibly false review.
Richard estimates that his lost revenue from the negative review, including the cost of rebuilding his company’s reputation has totaled more than $1 million since the negative review tarnished his business reputation six years ago.