Consumers using online reviews to help make purchase decisions has been a growing trend for several years.
In fact, according to multiple studies, online reviews are now the single biggest influence on consumer purchases.
Consider this – in a study done by the Local Search Association (LSA), a not-for-profit industry association of media companies, agencies and technology providers who help businesses market to local consumers, the importance of the Stars associated with online reviews is significant.
This is not a big surprise. However, what is an acceptable number of stars if you are a consumer? What do businesses think is the needed number of stars in an online review?
Consumer Perspective on Star Ratings with Online Reviews?
Consumers, when asked, “What is the minimum number of stars you require before you’ll consider a business?”, gave multiple answers. For example, the survey found:
- 68% wanted 3.5 stars on average. The higher the average, the better.
- 52% said at least 4 stars were required to merit consideration in a purchase. (Figure 11)
- 48%, just under half, said they were willing to consider a business without any reviews.
- Accordingly, 52% would disqualify a business that didn’t have “enough stars.”
Having no online reviews equate to surrendering over half of the buying public to the competition. And having poor reviews, under 3.5 Stars on average, means losing 32% of the people in the purchasing mode.
Online reviews, and the number of Stars associated with the review, influence buying behavior. The truth is, without a minimum number of Stars (3.5 as noted above), many consumers will not consider your business as an option.
Business Perspective On Star Ratings With Online Reviews
Business people were very perceptive when asked about Star rating requirements by consumers making buying decisions. Consider the following:
- 40% speculated that consumers wanted 4-Star ratings or above an average in online reviews.
- 41% thought between 3 and 3.5 stars was enough (Figure 12).
Small Businesses Ignoring 52% of their Potential Market
Half of all small businesses have not yet embraced the trend of consumers relying on reviews. In the LSA study noted earlier, 28% of small businesses do not ask for reviews and 22% say they have none! This lack of attention will put this 50% of businesses in a difficult competitive position. Remember, only 48% of consumers (as noted above) were willing to consider businesses without online reviews. These businesses, whether they know it or not, are ignoring 52% of the buying public. Not a business model most businesses would knowingly choose.
In short, about 50% of small businesses are ignoring today’s “Word of Mouth” advertising, one of their most impactful sales strategies, by not having an online review strategy in place.