Those cute little stickers teachers put on students’ papers? At best, they equate to a pat on the back (well done, junior!).
But those lovely stars on your Yelp listing? Those can equate to tens, even hundreds of thousands of dollars in additional revenue for your local business!
Yelp made those stars gold-colored for good reason:
Higher ratings increase revenue – big time. A 2011 Harvard study found that a one-star increase in Yelp rating led to a 5 to 9% increase in revenue. And that was four years ago! Given how much people rely on review sites these days, how much do you think one of Yelp’s gold stars is worth in 2015?
People trust their ratings. Yelp has become the “gold standard” for consumer reviews, particularly in the restaurant industry. The Harvard study described an interesting phenomenon we like to call the “Yelp effect”: chain restaurants have actually declined in market share as Yelp penetration has increased. While that’s not necessarily a causal link, it does suggest that online consumer reviews are quickly overtaking more traditional forms of reputation development and management. Make no mistake – people trust Yelp.
Those gold stars can be even more influential than customers’ actual experiences. A 2012 study published in The Economic Journal used “regression discontinuity” to show how Yelp’s rating-rounding process (e.g., rounding a 4.26 average rating up to a 4.5) can disproportionately affect the rate at which a restaurant books up.
In simplest terms, the study showed that an extra half-star rating (even if it’s only due to rounding) causes restaurants to sell out 49% more frequently – and can have an even bigger impact if alternate sources of information about the restaurant are scarce.
What should we take away from all this fancy research?
Consumers’ opinions are becoming more important than ever. With just a few clicks and a few words, customers can easily send a powerful message about your company’s goods, services and customer experience. (Think of Yelp as the equivalent of a digital bullhorn.)
Every rating matters. Especially when you don’t have a lot of them. Just a single one-star rating on Yelp can drop your average significantly if you don’t have plenty of 4’s and 5’s to counterbalance it.
You need to take control of what customers are saying about you. But don’t worry, that doesn’t mean you need to spend countless hours trolling review sites to protect your company’s reputation. That’s what we do! As a business dedicated exclusively to online reputation management, BARQAR makes it effortless to build more positive reviews, limit negative ones and control your brand image.
Ready to take the next step? Contact BARQAR today to learn more about our reputation management services.