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14 August 2019

The power of online reviews for small business

How important is your brand’s digital reputation?

In our digital world, rating products and services has become an everyday part of shopping. From Uber rides to buying underwear on Amazon, to pizza delivery from Deliveroo — most digital shopping platforms now ask customers to rate their experience.

It can be overwhelming. An episode of Black Mirror predicts a not-too-distant future where incessant ratings affect every single human interaction. This future is becoming a reality in China, where a civilian’s ‘social rating’ can affect the prices offered to them. Need to improve your score? Buy nappies — apparently they are associated with ‘wholesomeness’. But be prepared to lose points if you play video games.

So how important are online ratings for customers in Australia? Do they influence consumer behaviour? Or are they largely ignored and considered the opinions of an uninfluential (but noisy) few?

82% of Australians believe reviews are important for the survival of SMBs

The ratings game

True Local commissioned a research study on how the digital review landscape has evolved for Australian consumers and small-to-medium sized businesses (SMBs) in recent years. A whitepaper was published outlining their findings from the research: Small Business Digital Reputations Report 2017.

It’s not surprising that the report found that the majority of Australians are impacted by online reviews, whether reading them to book a holiday or writing about their latest kitchen appliance purchase. Local businesses can’t afford to ignore them, and those that actively participate have found them a noticeable driver for business generation.

Virtual trust

Traditionally, consumer trust was built on direct referrals from friends and family. Today, customers have a virtual community at their fingertips to help make purchasing decisions. A growing majority of Australians now use online reviews to judge the reliability of a small business.

The value in enabling customer reviews is clear, but there is a range of accompanying considerations that consumers are looking for when making purchases. Having a reputable, well-functioning website is most important, followed closely by having a mix of good and bad reviews.

Five stars — too good to be true?

Consumers are more likely to trust a business if there are online reviews. However, in the age of fake news, they are becoming more savvy at deciphering the quality of the online reviews. As the black market for ‘likes’ and fake reviews soars, suspicion also arises when the quantity of reviews appears inflated.

The report highlights the importance and value of all online reviews, both positive and negative. Businesses should try to see negative reviews as opportunities to gather insightful customer feedback, rather than be fearful of a negative impact to sales.

Consumers value constructive criticism (58%) and are more likely to trust a business that has a mix of negative and positive reviews (48%).

Most businesses proactively respond to negative reviews but some choose to bury their heads in the sand by denying customer’s complaints or choosing to ignore them altogether. Deleting negative reviews is dangerous — criticism can be hard to receive but consumers will not tolerate deception.

Some companies have gone to great lengths to filter out negative reviews online. Meriton Service Apartments have recently been in the media due to management directing staff to filter out potential negative reviews from appearing on TripAdvisor. As a result, the Federal Court has ordered Meriton to pay $3 million for misleading consumers.

Negative reviews are opportunities to improve online reputations if businesses take the time to respond to them and try to provide resolutions. Even a simple acknowledgement and apology can go a long way.

As a consumer reading online reviews, there’s a lot to consider when relying upon online reviews. Consumers will read positive and negative reviews, as well as a business’s replies to influence their decision making. Authenticity is paramount and cynicism abounds, for good reason. Consumers are now, more than ever, on the lookout for fake reviews, or reviews that have been ‘bought’ by a business in exchange for a discount or other reward.

As the world’s largest retailer, Amazon has become a primary target. Fake reviews abound, as Amazon’s suppliers compete for coveted ranking positions on the platform. The podcast Planet Money has an episode The Fake Review Hunter, which tells an interesting story of how the bodybuilding community led the fight against fake reviews on Amazon.

Harnessing the power of online reviews

Here are some tips from True Local to help businesses manage their online reviews and in turn, uphold their online reputations:

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Reply to all online reviews — responding to both positive and negative reviews is crucial to building trusted and upholding a positive online reputation.

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Thank reviewers for positive reviews — it’s a simple yet effective way to retain business.

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Ask for reviews — 34% of SMBs don’t do anything to encourage customer reviews.

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Apologise and try to resolve negative experiences — a whopping 89% of consumers feel more positively about a business that responds and tries to help when things go wrong.

With more awareness about privacy laws than ever, it is vital that businesses implement formal processes to safeguard their online reputation, protect private information of customer reviewers and try to fight fake online reviews. It’s all about gaining consumer’s trust, which will boost the value of brand.

True Local’s white paper referred to extensively in this post was art directed and illustrated by Another Colour. If you have a piece of content marketing that needs design and infographics to increase audience engagement, please get in touch.

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