WHY CUSTOMER REVIEWS MATTER
You can find hundreds of recent stats and studies that confirm the insanely influential role online reviews play in getting customers to buy or try new products, services, and local businesses. I cite some of the most salient findings in this section, but for me, the most compelling evidence comes right from our clients:
- An urban chiropractor asks his new patients where they heard about his practice. In the last year, he says that the proportion of total patients identifying review sites as the referral doubled from about 40% to 80% of all new patients.
- A spa with glowing online reviews was getting a steady flow of new client leads. Eager to grow, the owner ran a Groupon daily deal that brought in scores of new clients at once, but the spa staff wasn’t prepared, leading to service failures and a spate of scathing reviews. The owner says business slowed to a halt until she took measures to recover her reputation.
- Two competing pizza joints opened a block away from each other in a town with a cutthroat dining scene and high restaurant turnover. One owner decided to go “black-hat”
and buy scores of fake reviews to “prime the pump,” while our client focused on collecting a few honest reviews from real customers every month. Our client has grown a steady following, visibly busy most nights and packed on the weekends. The most visible activity from the competitor is online: a bunch of empty five-star ratings and 2 comments from real customers calling out the phony reviews!
These rangy anecdotes are just that: anecdotes. But for me, they expose the power and complexity of what has been dubbed “social proof,” the notion that consumers now validate or invalidate for each other the value proposition of your business. It’s not quick or easy to build genuine social proof, but it is definitely worth it. Here’s why.
REVIEWS ARE INSANELY INFLUENTIAL
We now live in what Forrester Research has dubbed “The Age of the Customer,” and guess what? Empowered customers are more demanding than ever, and they have the ability to make or break your business. They don’t trust what you say about your product or service, and they really don’t trust your ads. Instead, they trust other people like themselves.
72% of consumers trust online reviews as much as recommendations from friends and family.
So, whether you’re talking about a restaurant, a medical practice or an electrical contracting company, it’s hard to overstate the influence its customers now have on each other. Because customer reviews are perceived as being written by regular folks with no agenda, people trust them—even more than they trust expert opinions. A 2011 study found that 55% of consumers felt that the opinions of
“people like me” had the greatest impact on their buying decisions.2 To underscore the point, the popular members-only home service review site Angie’s List started using this tagline in the same year: “Reviews you can trust, written by people just like you.”
And globally, trust in online reviews is on the rise. According to Nielsen’s 2012 “Global Trust in Advertising Survey,” 70% of consumers trust online reviews from people they don’t know, up 15% from four years earlier. Ninety-two percent of consumers around the world say they trust word-of-mouth recommendations, whether from strangers or from friends and family, above all other forms of advertising.3 And keep in mind that those who regularly read and post online reviews tend to be younger, wealthier and more optimistic about technology—an attractive segment for most businesses to reach.