The Importance of Online Reviews for Local Business

I was recently asked by a local review site to weigh in on the importance of online reviews for local businesses. Here are my thoughts, Q&A style.

1. How important is it for businesses to have a solid presence on review websites?

It’s important to the degree that review websites affect a decision to do business with you. With restaurants and hotels it’s a no-brainer. A solid presence on Yelp and Tripadvisor is a must. But what about a local plumber? A car dealer? A consulting firm? It’s different for every business.

Generally, if you are an online business it is essential to have a strong review presence. One study says that 63% of customers are more likely to make a purchase from a site which has user reviews.

A good rule of thumb is this: Will people search for your business or your particular product online before doing business with you? According to Internet Retailer, 83% of consumers research online before buying a product or service. According to Search Engine Land’s Local Consumer Review Survey, 76% of consumers regularly or occasionally use online reviews to determine which local business to use. That doesn’t mean every purchase of every product, but clearly there’s a lot of searching going on. The same study shows that consumers really only need from 2-10 reviews to be able to make a decision. You will have to get a feel for your industry and your product before you determine how much effort you will put into acquiring online reviews.

One factor to consider, and a reason that you should at least have a minimal collection of reviews, especially on Google Places, is that online reviews are believed to help with search engine ranking, particularly for local businesses. Meaning the quantity and quality of your reviews may affect where you show up in the search engines. For this reason, it would not hurt for you to encourage your customers to review your business on your Google+Local page.

2. Do you have any advice for business owners in moderating reviews, in particular responding to negative feedback?

It seems the greatest fear of any business is getting a negative review. But negative information from customers is the greatest gift you can have, it gives you real feedback to improve your business. Negative reviews also add credibility to the positive reviews. People tend to be suspicious about a collection of reviews that are 100% positive. If you do get a negative review, it is important to have other positive reviews that offset the negative one. One bad review is not bad, unless it’s the only review, or one of just a few.

You should always respond to negative reviews, and always respond in a positive manner, thanking them for the information, even if the reviewer doesn’t deserve it or has been ugly. Customers who read the negative review will also read your response. Responding to negative comments and reviews can create respect for your business. It also helps potential customers see your human side rather than just seeing a business.

You should also occasionally respond to positive reviews, thanking the customer, and responding personally to the reviewer if you had the chance to meet them personally. In one study by PhoCusWright, 78 percent of respondents said that seeing a response to online reviews made people believe that the local business cares more about them.

3. Is it helpful for business owners to encourage and directly ask customers to review their services online?

Yes. You might be surprised at how many customers will provide a review simply by asking them. Don’t ask them to give you a positive review, just ask them to review their experience and give their opinion about your business. Most of these reviews will be positive, because you have asked them to help you, not hurt you.

The trick is to make it easy for your customers to provide the review. You can do this by email and provide a link to the review site of your choice. You can also do this during personal contact at the conclusion of the sale or customer interaction. I know of one local business that hands out a business card with a link to his Google+Local page and asks customers to share their experience with a review. That link is rather long, so use a URL shortening service such as Bitly.com or Goo.gl to make it easier for your customers.

Your Local Review Strategy

Online reviews may be an incredible opportunity for your local business. In most local searches (other than in major metropolitan areas) I find very few businesses that even have a single review (see the pic at the top of this article). If your business can accumulate 10 reviews and competitors have none or one, your business will have an advantage. So what’s your strategy?

Keep it Simple

A) Start by doing on online search for your business. Not just the search engines, but also review sites such as Yelp, Google Plus Local, and those specific to your industry.

B) Ask your customers what sites they searched to find your business, or what websites they regularly use to get information about a business in your industry.

C) Ask your customers for reviews

What has your experience been with online reviews? What review sites have the most impact?