Do online reviews really matter, and do they make a difference to your business? The answer is yes, they absolutely do.
Consumers increasingly use reviews left by other consumers as part of their pre-purchase research efforts, and a bad review can have serious effects on your sales.
Herd shopping psychology plays an ever effect on consumers’ behavior online. Groupon is a wonderful example of that, with deals kicking in only if a certain amount of people pay for them. Research shows that the more people have already opted in on a deal, the likelier it is new visitors will commit to it.
User reviews are not so far removed from this phenomenon.

Over 80% of people said that positive reviews would encourage them to purchase a product. The same number of people changed their minds about purchasing after reading as little as one or two negative reviews.

Fake & Negative Reviews

Unfortunately, fake reviews exist, and they exist in a massive abundance. Competitors have been known to leave bad reviews on products posing as disgruntled customers, That is why more needs to be done to help consumers identify a fake review.

You are bound to get a negative review at some point during your business career. That’s simply the reality and nature of the world. It can be devastating for a business, but most people recognize that everyone makes mistakes. A couple of bad reviews aren’t going to put the nail in your coffin and close your business down.

Here are just some of the facts why online reviews are not to be ignored:

  • 68% of millennials trust online reviews, with positive ones producing an 18% average uplift in sales
  • Consumer reviews are more trusted than descriptions that come from other manufacturers, nearly 12 times more.
  • 90% of consumers read less than 10 reviews before forming an opinion about a business which means these decisions being made are made quickly, without much hesitation.
  • The top five industries to be affected negatively by online reviews are restaurants, hotels, doctor’s offices, hospitals and hair salons.

Negative reviews aren’t all bad; these have been known to create a buzz around your business and increase its exposure, unlike fake reviews that have been so outlandishly obviously fake and ridiculous that they go viral.
Want to learn more about how online reviews can make or break your business? Check out our infographic.

User Reviews are the King

User Reviews are the King

About the Author

Josh Wardini, Editorial Contributor and Community Manager at websitebuilder.org. With a preliminary background in communication and expertise in community development, Josh works day-to-day to reshape the human resource management of digitally based companies.

 

When you think of the machine that is your online business, what do you picture? Do you see something organic? Something mechanical?

I think it’s helpful to pick a vision. The marketing and sales functions are too complex. The tools and channels are changing faster today than at any time in history. Thanks, internet.

The advertising, marketing and sales process.

Vizualize your marketing machine to make good decisions about where to invest.

Visualizing the process helps us focus on the pieces one at a time, instead of being overwhelmed by the mass of moving parts that feed our pipes, funnels and drips. When we work with clients, we tend to talk about knobs.

Here’s what I mean.

Our Marketing Machine Looks Like A Scientific Instrument

The most powerful metric for an online marketing ecosystem is acquisition cost.

The lower your acquisition cost, the higher your profit.

The lower your acquisition cost, the cheaper all of your advertising becomes.

The lower your acquisition cost, the more places you can afford to advertise.

But acquisition cost isn’t a dial you set. It’s the product of several dials.

The Acquisition Cost Spectrophotometer

We control acquisition costs using a device called the “Acquisition Cost Spectrophotometer” (ACS). This powerful device has two dials.

1. Traffic cost

2. Conversions — Typically leads or online transactions

We plug the ACS into any incoming channel — search engines, email, referrals, social media and so on. Then we begin to play with the knobs.

If we increase the traffic costs, but the conversions stay the same, we increase our acquisition cost, and the little red warning light turns on. If we dial down the traffic costs and keep the conversions the same, acquisition costs go down, and the red warning light goes off.

So, if we can increase conversions without increasing traffic costs, we get all the benefits of a lower acquisition cost. And for the paid search channel, we can actually lower the traffic costs by raising the conversion rate because Google rewards ads with effective landing pages by placing them higher on the search results pages.

Mathematically, the acquisition cost is calculated as:

Total Traffic Cost/Conversions

OR

Total Traffic Cost * Conversion Rate

If we put our metaphor down for a moment, we know that each of these “knobs” actually involves an entire process. Our “Traffic Cost” knob is controlled by an advertising and media team focused on getting the highest quality clicks for the fewest dollars.

Our “Conversions” knob is a metaphor for a team of data scientists, developers, designers and test techs focused on delivering the right experience to entice action.

All the marketer needs to do is determine if they should be investing in traffic or conversions, then fund the teams accordingly.

Vectron Conversion Analyzer

These are the primary knobs you turn when optimizing for conversion.

These are the primary knobs you turn when optimizing for conversion.

The Vectron Conversion Analyzer doesn’t actually exist, but we can visualize ourselve adjusting the knobs as we optimize our site.

When focused on optimizing a website for a given traffic channel, there are a number of knobs we control. I visualize a “Vectron Conversion Analyzer” as a metaphor for our process.

This amazing device allows us to control a number of “ingredients” that can lead to more conversions for any given traffic source. If you read this column, you’ll be familiar with most of the knobs on this little gem.

Value Proposition

The headlines, text, and images that spell out the value being offered by your company and products. Answers the question, “What’s in it for me?”

Layout and User Experience

The way the design draws a visitor’s eye to the important parts of each page and the cues that move them step-by-step along their exploratory journey.

Should important information be moved above the fold? Is there a visual hierarchy that tells the visitor what is important?

Credibility And Authority

A site design’s first job is to make the site seem credible. It should communicate that the company and products represent an authority in the solution space that it occupies.

Trust And Security

The visual cues that tell a visitor that the site will treat any information exchanged with care and veracity.

Social Proof

What do others like me think about this company, site and products?

Splitting The Signal

The Vectron machine splits the traffic up, allowing us to test different settings at one time. This is how we determine two very important things:

1. What is lacking from the site that visitors expect.

2. By how much each change increases the site’s performance.

AB Testing gives you the feedback on your conversion optimization work.

AB Testing gives you the feedback on your conversion optimization work.

Visualizations That Help You Prioritize

We rarely have the budgets to invest in every part of our marketing machine. Having a metaphor by which you can visualize the pieces working together offers a powerful way to decide how to invest over time.

Using the visualization at the top of this page, you may not have any luck seeding your brand clouds with advertising until you’ve built brand awareness. When it rains, you should invest in the downspouts that drive leads into the soil of marketing.

If your sales close ratios aren’t flowering, you may need to look at the quality delivered by ads and conversion together. Once you have a low acquisition cost, you can again invest in more expensive advertising channels to seed your brand’s rain clouds and bring the rain.