It’s common knowledge that customer reviews and feedback are crucial to online success. With 97% of all online shoppers reading reviews before making purchasing decisions, verified and public feedback from other customers is essential.
Have you ever stopped to wonder how much customer reviews are actually worth to your business? While positive reviews are ideal, what is the impact of negative reviews on your brand? Let’s explore some of the ways that customer reviews add – or subtract – value from your business.
Reviews deliver a high return on investment
Whether you invest in a third-party reviews platform or not, reviews deliver a high return on investment (ROI). There are plenty of trusted free options for gathering reviews online such as Google My Business, Facebook and Yelp. However, you may choose to use a third-party platform to automate the gathering and verification of reviews.
Based on previous customer data, Feefo’s ROI calculator uses easily accessible data points from your business to calculate the ROI of investing in a reviews platform. These include:
- Visitors per month
- Orders per month
- Average customer order value
- Any Google Ads or Facebook Ads spend
If you decide to use free manual platforms, there is a positive ROI on reviews too.
- Increase in sales
The most obvious benefit to having customer reviews is an increase in sales. However, as well as the ‘good reviews = more sales’ formula, there are a few other reasons why reviews contribute to an increase in sales.
For example, having 50 or more reviews on a single product can lead to a 4.6% increase in conversion rate. Although reaching 50 reviews may seem like a challenge, having a few reviews is better than having none. Research by Medill Spiegel Research Center at Northwestern University found that if a product has five reviews, the likelihood of it being purchased increases by up to 270%. Spiegel also found that reviews on a lower-priced product can increase the conversion rate by up to 190%. On higher-priced products, the conversion might increase by up to 380%.
- Reduce missed opportunities
Consumers are almost spoilt for choice these days, so they’re increasingly turning to reviews to build trust and to validate the authenticity of brands new to them.
If 97% of customers rely on reviews to inform buying decisions and there are no reviews available for your products or brand, this is an enormous wasted opportunity. Many customers won’t consider purchasing from your brand and will quickly go to a competitor. The volume of competition online makes it easy for customers to go elsewhere and never return to your site. This represents short-term wasted opportunities as well as significant long-term losses.
If you do have reviews but they’re overwhelmingly negative, know that 86% of shoppers will hesitate to do business with a brand if it has negative online reviews. Although customers are mindful that brands are unlikely to have 100% 5-star customer experiences, positive reviews should significantly outnumber the volume of negative reviews.
- Accelerate digital marketing efforts
Having public reviews available on your website or other platforms can influence the success of your other digital marketing channels.
For brands focused on SEO (search engine optimisation), SEO tool site Moz suggests that reviews account for 15.44% of the weighting Google uses to rank local businesses. Rich snippets such as star ratings for products, services or your business as a whole can also increase CTR (click-through rates) for both organic search and paid search engine marketing by up to 35%.
- Gain valuable customer insights
Finally, a huge benefit of receiving regular customer feedback is understanding the positives and negatives of the customer journey with your brand. It’s not often that reviews are 100% positive or 100% negative – there are often highlights and room for improvement in each. If there are frequently noted topics such as high shipping rates, products broken on delivery, or a poor customer service experience, this provides an opportunity to improve the journey for future customers.
As well as adjusting the current customer journey, reviews can also give brands a nudge in the right direction for the future. Customer feedback may include:
- Information on other uses for your product
- Ideas for ways to improve the product or service
- Complementary products that they’d like to see
- Comments around the sustainability of the product – is there anything you can do to make the supply chain more eco-friendly or kinder to the planet?
These insights can help you forge a strategy for future growth.
Conclusion
Customer reviews are a valuable asset for your business. They support purchasing decisions for future prospects and boost conversion rates. Reviews can also help inform the priorities for your business going forward.