Online Reputation Management – Good New & Bad News
Reputation management, as we know it today, is basically Business 101. The goal is to create satisfied customers and have them voluntarily share their good experience with other consumers.
Without a doubt – the more things change the more they stay the same!
Now think of this – prior to the internet, studies revealed satisfied customers shared their experience with 3 potential customers on average. Compare that with an unsatisfied customer telling 19 people about their “bad experience” – real or imagined. The bottom line is that translates into needing six satisfied customers to counteract one negative customer.
In short, this situation illustrates the essence of the online reputation management challenge. Each business must have a strategy to collect positive reviews. Positive reviews help CLOSE business and minimize negative Reviews. After all, if you have 15 or 20 positive Reviews for each negative one, it’s obvious a negative experience is not a normal experience.
The Bad News and Good News About Online Reputation Management
Online feedback on Google, Yelp and other review sites provide a platform for positive and negative reviews. The bad news is an unsatisfied customer will be “heard” by more than 19 people. The good news is the positive reviews are above and below the negative review. The more positive reviews the better. It’s better than equal time.
The VERY GOOD NEWS is most companies have many, many more positive customers compared to negative, unsatisfied customers. Additional good news is with consistent effort, businesses can encourage satisfied customers to write reviews and overwhelm any negative reviews – pushing the negative review back many positions or even pages. It’s really that simple.
Reputation Management As A Sales And Marketing Tool
Reputation management is defined by positive reviews on online directories and social media. An exact relationship between reviews and sales cannot be tracked completely, however, trends are emerging.
Michael Luca, an assistant professor in the Negotiation, Organizations and Markets Unit at Harvard Business School, has done studies trying to further define the impact of reviews on sales. Luca used Yelp to attempt to track reviews and their relationship/impact on restaurants in the Seattle, WA area. In short, Luca’s study provided a few takeaways from which most local marketers can learn. Including –
- A one-star increase in Yelp reviews leads to up to a 9 percent increase in revenue.
- This increase was experienced by independent restaurants – the ratings did not affect restaurants with chain affiliation.
- In fact, in the study area, chain restaurants have declined in market share as the penetration of Yelp reviews has increased. This suggests online consumer reviews substitute for more traditional forms of reputation management (i.e. newspaper, radio and television).
- Consumers do not use all available information and are more responsive to more visible quality changes.
- Consumers respond more strongly when a rating contains more information. Consumer response to a restaurant’s average rating is affected by the number of reviews and whether the reviewers are certified as “elite” by Yelp. Consumer response is unaffected by the size of the reviewers’ Yelp friends network.
Beyond Yelp Reviews
The example of Yelp reviews helps business owners understand how positive feedback, or more Stars, can impact the bottom line. The challenge is having the discipline needed to encourage satisfied customers to provide reviews.
A business’s online reputation relies customers first getting online, finding your listing and finally publishing a review well after the actual service. The reality is, no matter how well intentioned, most customers don’t do it.
Despite this reality. it is important for businesses to start capturing reviews as part of your online reputation management plan. Consider the following –
- 71% of consumers seek out reviews for every/almost every purchase
- 70% of customers trust businesses with 6 to 10 reviews
- 72% of consumers say they trust good online reviews
- Anonymous posters are trusted as much as personal recommendations
Online Reputation Management Relies On Directory and Citation Sites
Positive online reviews is needed now more than ever. Further, the minimum of 6 – 10 reviews should be recent reviews. Online reviews from a year ago will have a limited impact.
Reputation management is a business practice successful businesses will master to enhance their competitiveness. They will be disciplined and consistent to ensure their efforts will create flow of newer, more relevant reviews. People will see the dates of the reviews and so will search engines.