How negative reviews affect business

When consumers want to learn more about a business or product, they turn to the internet. Specifically, they visit websites like YelpAngi (formerly Angie’s List), OpenTable, and even Facebook and Google. These review sites are considered trusted consumer resources where discerning buyers from every walk of life find insight into how different products and services stack up against each other.

How popular are review sites?

According to a 2021 study, nine out of ten consumers use a review site before making a purchase. Eight in ten shoppers will consult a review site before using or visiting a local business. 

Yelp is one of the oldest and most trusted review sites on the web, with over 244 million reviews. While most of their reviews are local services, they span industries from retail to restaurants to health and everything in-between. Seventy-two percent of the reviews are positive recommendations, while thirty-two percent of reviews are between one and three stars.

It’s not overstating to say that stars—or a lack thereof—can make or break a business. A study by the Harvard Business School found that, for restaurants, a one-star increase on Yelp can translate to a five to nine percent increase in revenue.

Yelp is by no means the only source for reviews. Customers leave their experiences on a growing range of sites featuring reviews, including Amazon, Google, and Facebook, as well as travel sites such as TripAdvisor. Angi alone has grown to over 5 million subscribers, while TripAdvisor has over 460 million monthly visitors.

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Breaking down the basics of online reviews

Online review statistics explain what many already know from personal experience: reviews are considered authoritative. With the global nature and diversity of today’s marketplace, consumers look online first because they don't want to waste their time or money on a business that isn’t up to par.

Marketing company Invesp assembled a compilation of statistics about online reviews. Here are some of the key figures:

  • Everyone is looking at reviews: 90% of consumers read online reviews before visiting a business
  • Reviews are trustworthy: 88% put as much trust in online reviews as they do in personal recommendations
  • Good reviews equal better revenue: Consumers are likely to spend 31% more at a business with excellent reviews
  • Bad reviews equal less business: 86% of consumers will hesitate to purchase from a business that has negative reviews
  • Trust in reviews equal trust in a business: 72% of consumers say that positive reviews make them trust a business more

This clearly shows that online reviews and paying attention to them isn't just part of a customer-based strategy but essential to the growth and survival of a business.

 

The problem with negative reviews

When it comes to reviews, the fact is that people are more likely to share their bad reviews than their good ones. A study by Dimensional Research found that respondents were 50 percent more likely to share bad interactions with a company than nothing at all on social media, with 52 percent more likely to share their experiences on a review site.

There are two main types of negative reviews from genuine customers, which can be categorized as “disappointment” and merely “negativity.” Let’s look at each.

A majority of reviews use words like "disappointed"

A study of fashion purchases from e-commerce marketing platform Yotpo found that when looking at reviews (1.3 million of them in this case), a majority of the negative ones contained the word “disappointed” or “disappointment.” In fact, those terms were mentioned 20,000 times, while the word “bad” was present in just 7,500 of the negative reviews.

The cause is clear: when a consumer is buying online, they’re making a decision based on words and pictures. Without using their other senses to make a decision, consumers depend heavily on what’s presented to them digitally. The experience becomes personal, and a disappointed customer is created because what you’re delivering didn't match the customer's expectations or what they saw online. The biggest way to combat these disappointed, negative reviews is to improve your product, offerings or customer service.

A negative review is the equivalent of a put-down. Customers who are disappointed generally express what they were expecting and how the business failed to meet their expectations. This helps inform future consumers instead of just turning them away. A bad review that’s just bad though is a different story -- but not any less impactful on business.

Can customers be sued for negative reviews?

Sometimes customers can be sued for leaving bad reviews. There have been several cases where smaller companies have tried to use legal maneuvers to have disappointed customers remove their reviews. Even a daycare resorted to suing for reviews left about it. However, these types of reviews are rarely successful. If the review is true in all aspects and based on facts, the reviewers are usually safe from legal action.

Some types of legal maneuvers can involve SLAPP laws, the Communications Decency Act and others. This article explains more about patrons being sued for leaving negative reviews. 

The impact of negative reviews

A single bad review in a sea of otherwise positive ones doesn’t hold much weight. Consumers trust collective experiences more than the opinion of a single individual who had a bad stand-alone experience. They will usually see through the outliers and trust the majority's opinion.

Likewise, one good review in a batch of negativeness isn’t going to do much to improve trust with potential customers. Not every bad review will harm your business, but if every single review is negative, you’re doing something wrong.

Don’t take bad reviews personally, but consider them learning experiences and find a way to grow from them. Integrity goes a long way, even in the face of bad reviews. Apologize for your mistakes, fix them and let consumers see you publicly taking action and making improvements. 

Make online reviews a priority

It’s easier to prevent a big mess than to clean one up, so most of your efforts should go toward providing optimal service and encouraging customers to share their good experiences with you online. You can offer incentives to customers who post reviews; just make sure there’s no caveat that the review has to be good (see this horror story from a New York wedding venue that charged a bride and groom $500 for every negative review left by a guest of their wedding).

You will eventually receive a negative review, but don’t just let it sit there. Respond to it with tact and offer a solution. Most customers who leave a negative review simply want their experience to be acknowledged. A genuine apology can go a long way toward changing their perception and can impact the opinions of other consumers when they’re reading through the reviews. If it was a customer service issue, make sure to let them know you heard the client's issue and that you are training or informing your staff, so it never occurs again.

censorYou may be tempted to pull down negative reviews or censor them. This is not a move you want to make. 62% of consumers say they will not buy from a company that censors reviews. Make sure you create trust in your customers- past, present and future- and let them know you hear them and are working to make their experience better.

Automate positive reviews

Finally, don’t let reviews—good or bad—happen without your knowledge. Monitor your mention through frequent searches of your business on review websites, setting up Google Alerts, and widespread reputation monitoring tools like these. The quicker you learn about a negative review, the faster you can provide an actionable solution and avoid any fallout. Today, reviews can be monitored and even improved with automation.

Don’t be afraid of negative reviews. Consider them to be opportunities to let your customer service shine. As long as you’re working hard to provide the best possible product or service, the positive reviews will outweigh the negative ones. And if you’re receiving more negative reviews than you’d like, see it as a chance to meet your customers’ demands. Feedback, both good and bad, is how you learn and grow.

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Review Management FAQs

Why are online reviews important?

It’s not overstating to say that stars—or a lack thereof—can make or break businesses. Every one-star increase on Yelp can translate to anywhere from a five to nine percent increase in revenue. However, if people read even just one negative review, they will likely seek other brands to patronize. So it is vital you act on these reviews.

How do negative reviews impact business?

Negative reviews can seriously impact your business. Every time a negative review pops up on Google searches, you have the potential to lose customers. 86% of customers hesitate to purchase from companies with negative reviews. This will ultimately cost you web traffic and, of course, revenue.

How do I manage online reviews?

The key to effectively managing online reviews is to respond as quickly as possible. This goes for both positive and negative reviews. Most customers who leave a negative review simply want their experience to be acknowledged. So offer an apology and work to make their situation right. This will often change their opinion and those of potential future customers who are reading through the reviews of your business, brand and products.

How do I respond to negative reviews?

What you say in your response has the ability to change the person's mind about your business. Remain calm when replying to negative reviews and always address their concern. Work to resolve the issue, which may mean taking the conversation to email or private messages. Never censor or pull them down. Above all, don't be afraid of negative reviews. Instead, look at them as a way to grow your business and customer service.


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