What Online Reviews Mean to Local Business

I recently visited a local service business that had a seating area outfitted with a desktop computer so patrons can check email or take care of other tasks online while they wait. Attached to the computer was a bright yellow sign, saying: “If you had a fantastic experience today, please feel free to Yelp us! If not, we are sad and management would like to hear from you.”

This is a local business that’s clearly hip to the power that online reviews can have. In fact, fostering good online reviews is becoming increasingly important for local businesses of all types. According to the latest research, more customers than ever are consulting online reviews as a first step before deciding what products and services to buy, and what local businesses to buy from.

This isn’t just a matter for product manufacturers and big brands. The survey I’m talking about specifically addressed how online reviews influence purchases at local businesses – NOT wider product reviews. The findings were clear: There’s ironclad evidence online reviews are having a bigger and bigger influence on how consumers approach local businesses.

One reason is that there are simply so many reviews available in so many places – not simply Yelp, but many industry-specific sites as well – that consumers can hardly avoid them. The question these days is why would a potential customer NOT check out the reviews?

And don’t make the mistake of assuming that nobody trusts online reviews. Trust in online reviews is actually on the rise, and consumers are forming more review-based opinions faster, and using them to decide where they spend their money. While reviews don’t match personal recommendations, they are coming closer.

Of course, some categories of business attract more review attention than others. As you’d expect, the survey found a heavy emphasis on restaurants, lodging establishments, clothing stores, hair salons, car dealers, repair shops and specialty shops (such as bike shops) as well as doctors, dentists and accountants. But nearly every type of local business now gets reviewed online.

As recently as 2011, about 22 percent of local consumers said they “never” go online to find a local business. That’s dropped to less than 5 percent. This represents a huge shift in behavior. As more people get a taste of how easy and helpful it is to find local businesses online, they are also sticking around to check out what others are saying by way of reviews.

Two years ago, about 70 percent of people surveyed said they read online reviews at least occasionally. That’s now jumped to 85 percent. That’s important to local businesses because by the time a consumer gets to reading a review, they are ready to make a purchase or select a service provider.

And research finds that consumers are making their online decisions quicker than in the past – reading fewer reviews before making up their minds.

So the path from reading online reviews to purchasing from a local business is shortening, and having a positive online reputation is crucial for you to convert online “searchers” into paying customers.

 

What You Can Do

To help encourage good reviews, it’s important to first be aware of the traits that consumers value most in a local business – and are most likely to comment on in an online review. 

Below, in order of important, is what survey respondents say matters most to them when selecting a local business. These, in turn, are the traits you should emphasis in your establishment, and in your own marketing and advertising.

  1. Reliability
  2. Good value
  3. Expertise
  4. Professionalism
  5. Accreditations
  6. Friendliness
  7. Courtesy
  8. Localness

And here’s one strong hint: Having a special offer or discount greatly increases the chances of a business being recommended – as long as it’s backed up by good service and good value.

Familiarize yourself with the major local review sites such as Yelp, TripAdvisor, Google Places, Yahoo! Local and others.  Check out the tools they offer local businesses to respond to customer reviews (good or bad), and any options you may have for requesting removal of offensive comments.  Armed with this knowledge, you can have a plan in place for what to do if something bad shows up. This will help you remain calm and approach your response professionally.

 

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About the Author

Daniel Kehrer, Founder & Managing Director of BizBest Media Corp., is a nationally-known, award-winning expert on small and local business, start-ups, content marketing, entrepreneurship and social media, with an MBA from UCLA/Anderson. Read more of Daniel's tips at www.BizBest.com, follow him at www.twitter.com/140Main and connect on LinkedIn at www.linkedin.com/in/danielkehrer.