How online reviews impact businesses.An Intro Into Online Reviews and Your Business
What happened before social media?
Social Media has changed every part of our lives over the last 10 years. From how we go about finding love to the photos we take of our food on the first date! More importantly for business owners, these customer stories are no longer shared just between close groups of friends and colleagues - but sent out on multiple social networks and reaching thousands of people.
Yelp has become synonymous with online reviews, and below is a breakdown of just how big of a player they are in the online review space.
- 135 Million monthly users in 2015
- 60.2% of Yelp users use the service primarily for the Reviews
- 32.5% use primarily for finding something near them
- 89% of users say reviews have a medium to high impact on their decisions
- Over half of the users have incomes over $75,000
The Impact of Yelp
- According to a study by Harvard Business Associate Professor Michael Luca "a one star increase in Yelp ratings results in a 5-9% increase in revenue"
- Moving from a 3-Star Rating to a 3.5 Star Rating increased business revenue by 21% for the most trafficked hours of the day
- 14% of all Yelp Reviews are 1-Star Reviews.
- Only 13% of people will use a business with an overall rating of 1-Star
- 72% of bad reviews are due to bad customer service interaction and having to explain the same problem to multiple people
Takeaways With its large user base and potential to increase the revenue of a 3-Star business by ~20%, Yelp is here to stay. Staying on top of new reviews can be a time-consuming affair, but apps like GoFanbase are offering a new way to quickly track customer experiences, while also encouraging more 5-Star reviews for businesses trying to climb the social ladder.
Visit part three of our series on online reviews and Google here!
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