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Online Reviews Can Make or Break Business

Posted by Macie Melendez on January 29, 2015
Online Reviews Can Make or Break Business Online review sites are powerful tools for customers, which means that all businesses should pay attention to them.

Consulting online reviews has become an integral part of the modern consumer’s buying process. A recent study from Dimensional research found that the buying decisions of 90% of respondents were influenced by positive online reviews, while 86% were influenced by negative reviews.

To dig deeper, Software Advice (an online comparison site for field service technology) surveyed customers to determine how they use online review sites to select residential service companies.

The residential service companies in their study included pest control, electricians, HVAC, plumbing, lawn care, and maid/cleaning services. However, those services were only measured for some of the more-specific questions on the survey. For the rest of the report, "residential service providers" was defined essentially as any provider that a consumer needed to hire to any type of service at/on their home.

To find the data in this report, a seven-day online survey of seven questions was conducted. The survey had 1,239 responses from random adults who have used residential services within the United States.

While businesses don’t have much control over online review sites, there are still best practices for recruiting more (and better) reviews, as well as for creating and managing an online presence for your business. All the data from this recent study is only beneficial to the extent that it can be made actionable. Given that, the study’s report suggests that all residential services business owners do two things:

  1. Claim their free business profile on Yelp and other reviews sites; and
  2. Actively monitor and communicate with their reviewers, both positive and negative.
Most Used Online Review Sites

The researcher who conducted the survey and compiled the report is Justin Guinn, a market research associate at Software Advice. We asked him a few questions.

Q&A with Justin Guinn

Macie Melendez: Consumers obviously benefit from the uprise in social media as a review tool for businesses, but how do you think business owners benefit?

Justin Guinn: Social media has given businesses multiple new channels to market their business and gain exposure. Businesses can actively push ads and information about their company. They can also engage in their customers’ comments and concerns within a matter of minutes. Within that lies another new channel: customer “shout outs.” Social media enables customers to freely talk about their favorite brands and share great experiences. This is a priceless channel for businesses, although one that’s definitely a double-edged sword.

Value of Reviews in Evaluating Residential Service Provider

MM: In what ways do you think online reviews will evolve in the next 5 years?

JG: I think online reviews will become even more organized and accessible on the consumer side of things. It’ll be interesting to see how companies evolve with them and leverage their input to improve operations. I imagine companies large and small will be able to better search social media for mentions of their company or brand. This will allow them to find consumer opinions that aren’t written directly at their company page or profile. These mentions could offer new insights into customer pain-points. Overall though, I am quite sure that these online reviews aren’t going anywhere.

MM: Residential service providers may not feel that they have the time to actively monitor their company reviews online. How much time, on average, would you say they should spend on doing so? And if they do, how much impact can it have on their business?

JG: This really depends on the size, type, and customer base of the company. If the company is small and unable to consistently dedicate time to monitoring and participating in online reviews, then they may only spend a few hours a month. For bigger, more active companies, they can have employees dedicated to this task. It really just depends on the business. However, it’s important to have some sort of strategy for online reviews. It’s a truly impactful venue for sharing experiences about where we (as consumers) decide to spend our money. So impactful in fact, that we found 86% of consumers will pay more for services if that company has higher reviews and ranks on online review platforms.

Willingness to Pay More for Providers With Positive Reviews

MM: Were any results of the survey surprising to you?

JG: I was very surprised to see that such a high percentage of respondents would actually pay more for a company with higher reviews. I was equally surprised that 96% of respondents find reviews “valuable” in their selection process, including nearly 70% that call them “extremely” or “very valuable.”

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