We are midpoint of the 2014 holiday spending season. For many businesses this is the time of year that makes, or breaks, the 2015 budget. In areas of the USA where the economy still struggles the cost of a couple negative reviews at this crucial time of the year could cost the business everything. This is where reputation marketing comes into play.
Disgruntled customers are a part of business. They can damage a business’ reputation and revenue. This is especially frustrating when the negative reviews are untrue, personal attacks, and slanderous. Even Forbes and Entrepreneur have tackled the topic ‘what to do when former customers lie’. There is no good solution.
If a business leaves a negative, slanderous review live then future customers will be turned away indefinitely. If they sue, the media and public sympathy will often side with the allegedly injured consumer.
On the other hand, Yelp has been accused of extortion and Angie’s list is now sharing her own heartaches after a flood of negative reviews.
The problem is – business needs reviews to survive in today’s market. Entrepreneur.com among other sites claims that a single negative review can cost a company 30 customers.
- ( Reevoo) 50 or more reviews per product can increase conversion rates 4.6% and produce an average 18% uplift in sales.
- (iPerceptions, 2011) 63% of customers are more likely to make a purchase from a site which includes user reviews
- (Bazaarvoice, Conversation Index, Q2 2011). Site visitors who interact with reviews and customer Q&A are 105% more likely to purchase and spend 11% more than visitors who don’t interact
It is very difficult to find any study that tries to determine how much companies like yelp and Angie’s list cost the American economy. This is because the actual dollar figure can never be measured. Businesses that are severely hit may be forced to close their doors – especially if they are hit hard through the holiday season.
The one thing that can be measured is the undeniable impact left online by positive reviews. The more reviews, and the more enthusiastic they are, the better. The fact is simple, positive reviews equal higher revenues. It isn’t a matter of deciding whether you want Reputation Marketing as part of your yearly advertising budget. The question is, do you want higher revenue at the end of the year?
Reviews and Reputation Marketing are actually one of the cheapest forms of advertising, according to the above figures. No other form of advertising is so consumer focused, and has measurable results. Even the traditional Newspaper, Magazines, and even Television cannot offer solid conversion to buyer ratios. Their numbers are vague or either industry specific.
The important question to ask is, ‘what does it cost your business to ignore Reputation Marketing?”