Positive Reviews Equal Small Business Growth

by ThriveAdmin | December 11, 2017 | Learning

Starting a small business is no easy feat. in fact, it could be one of the scariest things a person can do. Stats show that 8 out of 10 entrepreneurs who start their businesses close it down within the first 18 months, and a whopping 80% of small businesses crash and burn.

Traditionally, when a budding entrepreneur started a business, he or she relied on friends and family to recommend the business to others. Word of mouth was therefore crucial for business survival.

Today, technology has made word-of-mouth marketing easier and also more dangerous for small businesses. Equipped with social media and an internet connection, consumers can say anything about your business, and just one negative review has the potential to plummet your sales or adversely impact your audience’s behavior towards your brand.

There is no doubt that reviews have a significant impact on the reputation of a business. But, do they really have the power to hit your bottom line too? Yes, they definitely do.

United Airlines is a classic example. After David Caroll’s guitar got broken due to the airline staff’s negligence, he wrote a song called “United Breaks Guitars”, which gathered more than 15 million views. The result? The company’s stock crashed by 10%!

Here are some ways reviews determine the health of your business.

Reviews Boost Sales

Statistics show that 75% of people are skeptical about traditional advertisements and look for advice from their friends before making a purchase. In fact, people are four times more likely to make a buying decision if a product or service has been recommended by their network.

People are 4x more likely to buy if something is recommended by their network. Click To Tweet

In a case when there are no friends to look to, people turn to Google for help. Local Consumer Review survey 2017 shows that 97% people read online reviews before deciding whether to buy from a local business or not.

Also, 85% of consumers trust online surveys as much as personal recommendations. Not paying attention to reviews could cost a company 85% of its target audience.

Yelp is a platform that hosts reviews about a variety of businesses ranging from restaurants and beauty salons to dentists. Many people turn to Yelp before making a purchase decision.

Research shows that a one-star increase in a Yelp rating has the potential to increase a company’s revenue by 5 to 9%. This is because consumers do not use all the available information and hence respond to the quality changes that are most visible to them.

42% of the people check travel websites while planning their vacations and 77% of patients use online reviews to find a doctor.

Negative reviews hurt a business as much as positive reviews benefit it. A business is likely to lose 22% customers if one negative review pops up in search results. With three negative reviews, this figure increases to 59.2% and with four or more, 70% of customers are lost.

A business may lose 22% of customers over one negative review. Click To Tweet

Improve Search Engine Rankings

Search data shows that around 50% of people do not look beyond the first page of search engine results, which makes it crucial for a business appear higher in the SERPs.

Positive reviews not only help a business in monetary terms; they also improve a company’s organic search engine rankings.

A local search ranking factor chart by Moz shows review signals as the fifth most important factor. The more content you have, the better it is.

Moreover, Google recently updated its maps feature and now shows ratings and reviews in a more prominent manner, giving immediate feedback to customers.

On top of that, a study also found a direct correlation between positive reviews and Google carousel position. Many other factors also contribute to this position. However, it makes sense that Google only displays the best businesses prominently.

Build Trust

A good number of reviews is proof that your business is legitimate. Hence, they allow potential customers to build immediate trust in your brand.

A survey conducted by Bright Local found that 74% of people trust a business if it has positive reviews. Why would people trust only what businesses have to say about themselves?

74% of people trust a business if it has positive reviews. Click To Tweet

Google also gives more importance to third-party ratings and reviews. Research shows that websites that incorporate TrustPilot reviews can increase their conversion rates by 58%.

Here, negative reviews can also benefit your business. Too many positive reviews make customers suspicious. Hence, mixed reviews show that the reviews are not fake and you have nothing to hide.

Cost of Hiring

Reviews do not only impact your customers, but your potential employees as well. A survey conducted by Corporate Responsibility Magazine showed that 76% of people won’t work with a company with a bad reputation even if they were unemployed.

Even if they did, 93% of them said that they would leave the company as soon as possible, for an organization with a good reputation. A company with a bad reputation not only struggles to find good employees but pays 10% more per hire.


Every positive or negative review gives you feedback about your product or service, which helps you identify your strengths and weaknesses. Based on these reviews, you can alter your strategies.

Understanding where you are lacking and subsequently improving problem areas helps you regain the trust of your customers who’ve had a bad experience with your company.

As per the Pareto rule, 80% of your business comes from 20% of your consumers. Hence, it’s important to keep them happy! Research shows that an increase in customer retention rate by 5% increases revenue by a whopping 25 to 95%.

How to Get More Reviews

Now that we’ve established the importance of reviews for a small business, it is imperative that we work on a strategy to gather more reviews. Here are some tactics that can help you.

Respond to Reviews

As per findings by ReviewTrackers, 52% of consumers expect a company to reply within 7 days after they have posted an online review, especially if it is a negative review.

52% of consumers expect a company to reply within 7 days after they've posted an online review. Click To Tweet

78% of consumers also said that the management’s response to a review shows that they care about their customers. So, instead of fretting over negative reviews, reply to them. This way, you can convert them into positive ones.

One such example is that of Kréme de la Kréme Nail Lounge. When a customer gave the lounge a 3 star rating because of its high prices, the salon’s manager replied by justifying why the prices were high. Also, always show appreciation for positive reviews by saying ‘thank you’ and offer a sincere apology to a complaint.

Give Your Customers a Story to Tell

Word-of-mouth reviews and recommendations will spread automatically when your customers have something to tell their friends and family about your product or service.

The example of Uber is quite relevant here. Every year, Uber’s marketing team comes up with promotional campaigns.

On one such occasion, Uber allowed its users to order ice cream just by making a few clicks on their phones. The users were then asked to share their experience on various social media platforms to win exciting prizes.

Ice cream is not the only item that Uber has delivered; customers have also ordered Christmas trees, kittens and toys through the service. Uber is a large-scale company that can afford such stunts. However, you can also replicate these promotional strategies and contests on a small scale.

Ask for Feedback

In an interview with Forbes, Daniel ‘Danno’ Vivarelli of Starloop, a young business that has an extensive strategy to get feedback, shared some valuable insights. According to him, if you want reviews, you need to request them. This could feel a bit awkward at the start, but you can pull it off easily with enough practice.

It took Danno 26 months to figure out the right language to use when asking for feedback. According to him, subtlety is the key here. Also, instead of calling these “reviews”, he terms them online feedback, which encourages clients to leave at least one comment.

It’s time to start focusing on the quality and quantity of your online reviews. And if you don’t already have a system in place to generate positive online reviews and use negative ones to your advantage, then start right now. Listen closely to both your happy and upset customers, and note the experiences they seem to enjoy the most.

After all, reviews aren’t just to get more business, but to also help your company constantly evolve by using customer feedback to improve user experiences.