Everyone recognizes that business reviews have value (NYT link or some contested business review story). However, it’s been a challenge to tangibly measure their true value. Most recently, new companies have made significant progress in showing how this value can be looked at from 2 different angles, one of which can definitely be measured! (more on that later!).
Let’s start with something that has been demonstrated, proven and measured – the value of customer retention.
According to MethodCRM:
- 80% of small business revenue comes from 20% of customers
- 5% higher customer retention can increase profit by 25%
- Repeat customers spend 67% more than new ones
Since the dawn of time, Word of Mouth (WOM) has been a driving force of business growth. Numerous studies show that WOM clients provide more value than walk-ins and other kinds of customers because they stay longer and spend more money. There is a definite correlation between WOM and Customer Retention.
In today’s internet era, online reviews are the new word-of-mouth, especially Google reviews. Official studies show that 84% of customers trust online reviews as much as personal recommendations, and 91% of customers read online reviews before deciding to purchase.
Why? Because the opinions of others are crucial in creating trust about a product or service, or a business in general. We rely on other people’s experiences, hoping to get the same good experience and – avoid the bad ones.
That means that good reviews will definitely help you organically get the people through the door. Coming in with the element of trust – they will be more likely to stick and become loyal as well.
Measuring Impact of Reviews
Remember the first sentence where we stated it’s been “a challenge to tangibly measure” the value of reviews? That’s changed. Companies have been looking at it for years, and at least one – ClubReady Partner Referrizer – has managed to crack the code.
How it Works
Google’s algorithm takes into account both the quantity and freshness of reviews (how recently it was posted), comprising approximately 15-20% of its decision-making process regarding the visibility of a business.
Looking at the data collected over the years, they’ve discovered a direct correlation between the growth of reviews and the subsequent increase in website traffic—specifically, in terms of website visit rates, click-through rates and impressions.
This example shows the rapid growth in website clicks, especially with the important mobile traffic tracks, after the addition of a focused review program with Referrizer.
To increase the trust factor of your business with google reviews and start gathering more positive reviews, consider a second party solution such as Referrizer’s Reputation Management.
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Note: This article was written by Elena Spasojevic, Co-Owner & Corporate Accounts, Referrizer