The importance of Online Reviews for businesses is growing exponentially. For many, a presence on a review site is a fantastic way to be endorsed and receive feedback from valued customers.
Yet at the same time, Online Reviews represent a tremendous concern and risk for a great number of businesses. Without adequate protection review sites are an open field for disgruntled ex-employees, jealous competitors and disappointed customers to ruin businesses’ reputations single-handedly.
The trends are clear and the statistics in support of those trends endless. How a business is perceived online matters more than ever. Principally, for many businesses this perception is overwhelmingly and increasingly based on Online reviews, with many consumers basing buying decisions on average scores alone.
87% of executives rate managing reputation risk as more important than other strategic risks
25% of an average company’s market value that is directly attributable to its reputation, according to the World Economic Forum
Your bottom line matters:
5-9 % is the average difference in revenues as a result of a 1 star difference in a businesses’ online rating
97% of consumers aged 18-34 read online reviews to judge a local business
88% of consumers say they would trust a online review as much as personal recommendations
87% of people say that a business need a rating of 3-5 stars before they will use them – up from 74% in 2014
86% of people would pay more for services from a company with higher ratings and reviews
The evidence is irrefutable, reputation matters to businesses, and in turn, consumers more than ever due to developing pressures from social media and review sites.
Overwhelmingly, business respondents rated reputation risk as their greatest concern in comparison to other risks. Reputation risk is often considered to be a combination of several other strategic risks, and as such remains fluid and elusive in terms of management for many businesses. In the physical world, a business may have a seemingly positive reputation with a strong base of happy returning customers, yet one scathing comment or review can have devastating consequence, catching a once flourishing business completely by surprise. This underlines the elusive element of reputation risk, and demonstrates the importance of having both monitoring and a clear, coherent response strategy in place. The fact that a majority of businesses admit they lack both should be concerning for many.
Review sites and social media are principally the two main avenues of investigation for consumers when weighing up which business to take their custom to. Trust in these two avenues is increasing rapidly. As stated above, 88% of consumers would now trust an online review or a comment on social media as much as a recommendation from a colleague, friend or family member. This is remarkable, and demonstrates the tremendous power reviews and a businesses’ social media presence now has. In the past, word of mouth and the physical perception of a business by passers-by was somewhat more controllable than the current system. Today, anonymous online reviewers and social media trolls can cripple businesses with otherwise unblemished reputations.
The consequences of such developments offer a concerning potential future for many businesses, without adequate protection. Beyond brand damage, severe reputational attacks can result in emotional suffering, infighting, and most crucially for business swift loss of custom and revenue. The evidence is damning – a unmonitored, unprotected online presence is not something to be forgotten about or ignored.
Many medium-sized businesses turn to their press or media team, with extremely mixed results due to the varying nature and severity of the threats that exist. While a growing percentage now claim to monitor their social media feeds for example, often this is no more sophisticated than a young intern checking any incoming notifications on a semi-regular basis. A large majority admit to having no formal strategy in place whatsoever in response to a reputation attack, perhaps the most concerning stat of all.
Yet fortunately, the current technology permits pro-active monitoring and surveillance of threats, allowing businesses to stay ahead of potential attacks in ways that would have been impossible scarcely a few years ago.