How much does a bad review cost?

Updated: Oct 20, 2021

Your Online Reputation is Key

If you're a business owner then you know your online reputation is just as important as your public reputation. In a world where 88% of buying decisions are made online before a customer steps foot in your store or contacts you, we know how important reputation is. It does not matter what you are selling, what services you offer, or how good your deals are. If your online reviews are below a certain value it is costing you money, literally. During our research into this matter, we found that Womply theorizes a single negative review can cost up to 30 customers. That's a giant loss of revenue for many businesses. There is also more that goes into that metric but we will get to that later. Negative reviews are incredibly harmful, and the more detailed the negative review the worse it can be. One of the few things you can do as a business owner is to respond to these negative reviews in a professional and friendly manner if they are justified. In fact, businesses that respond to customer reviews both positive and negative see an increase in their customer retention, and in turn, the customers are more likely to spend more.


Giant Headache

There are many different review websites out there. Many you are familiar with and use every day like google and Facebook. One of the other obvious ones is Yelp which can be the bane of restaurant owners' existence. There are also some fringe ones such as Yahoo! Local and Bing Maps. While you might not be using every one of these platforms it does help your business get seen by as many eyes are possible. Any digital marketing company worth its weight would recommend being listed on as many of these listing sites as possible, but with each new listing comes a brand new platform to monitor. Luckily there is software out there that lumps it all into one place and makes it easy to manage. Just like our social media management tool our reputation management tool above is a free and easy way to monitor, respond, and measure reviews/listings in one place.


Fresh Reviews

As I mentioned above one of the metrics for reviews being a factor in your business's success is the "freshness" of a review. A negative review from one week ago is going to be more effective at deterring a customer from shopping at your store than glowing reviews from 10 months ago. The other issue at hand is it can be hard to get good reviews. I do not always write reviews for businesses, but when I do it is either a glowingly positive review or an honest negative review. Typically unless I am asked to review a place positively I don't tend to make an effort, which is why it is important to ask customers to rate their experience with you. If you are a super small business even getting one new review per week will greatly help your odds at obtaining more revenue in the future. Another thing I wanted to mention is how star ratings affect you overall.


What Does a Star Rating Cost

You might be shocked to find out that having a perfect record of 5 stars does not actually net you more revenue than having a more realistic record such as 4-4.5 stars. Even more shocking is having between 3.5 - 4.9 stars will help you earn more. This can be due to two metrics. One being very few businesses have a perfect 5-star rating, and a 5-star rating means no one has ever had a negative experience. Obviously, that is a good thing, but customers are not used to seeing businesses with 5 stars so it is relatively easy to gloss over the reviews. So what do they cost? Well having between a 4-4.5 star rating should net you 28% more revenue per year, and Businesses with a rating of 3.5 - 4.5 stars tend to earn more revenue than any other business. What you might be surprised to find is that 5-star businesses earn less in revenue than 1-star businesses, what an odd thing to find out? I do want to preface that by saying 1-star ratings are not your goal by any means.


What Does All This Mean

I threw a bunch of numbers and metrics at you today, but what does it all mean? In my opinion, online reviews are often overlooked by many businesses new or old. Think of each review as a customer standing outside your business and telling each customer what they thought of it. This is a harrowing thought if most of your reviews are negative. We spend a lot of time, money, and effort on social media or paid ads and we neglect to focus on the free advertising that comes from reviews. It's the easiest way to get word-of-mouth marketing that more customers can connect to.

We also wanted to offer our readers a free and easy way to manage their reputation just fill out the form below and we can help you manage your online reputations with our free reputation management app.



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