Significant research exists to support the popularity of reading past customer reviews as part of the consumer purchase path, and the ultimate impact those reviews have on the final purchase decision. Last week at LocalClarity, we added to the existing research survey data demonstrating how companies that respond to customer reviews are perceived to “care about their customers”. (42.4% Agreed and 20.2% Strongly Agreed with the statement “When I see a business respond to customer reviews, I feel they care about their customers”)
New Customer Survey
At LocalClarity, we decided to take this reputation management research one step further. We wanted to determine if company responses to negative reviews could serve to actually improve a potential customer’s opinion of a business. We collected responses from consumers to the statement “My opinion of a local business improves when I see in Google that they respond to negative reviews from their customers.”
We weren’t certain of the results going into the survey since changing someone’s opinion of a business is not easy. National and international companies have advertising budgets in the millions (in some cases billions) simply to establish a positive brand image.
While smaller companies have proportionate budgets, they can spend years building reputations. Could something so simple as writing a few short apologies (or explanations) for past sub-par experiences impact potential customer opinions?
The data suggest that yes, company responses to negatives reviews have the power to change opinions for nearly half of respondents.
46.1% “Strongly Agreed” or “Agreed” that their opinions improve when they see responses to negative reviews. While not a majority of responses, it is still a strong validation of the power of responses to build or maintain a company’s reputation. “Neither Agree nor Disagree” received 40.3% of the responses while only 12.8% “Disagreed or Strongly Disagreed”.
Cost Effective Marketing
In the arsenal of tools a company has to manage its reputation, review responses seem to be one of the most cost-effective and powerful — especially given the fact that a company doesn’t even need to fix the underlying issues to improve their reputation. Of course, it’s best to make the specific operational improvement needed to avoid poor reviews in the first place, and conduct active efforts to collect feedback from a broad base of customers with positive experiences.
This research demonstrates the positive return-on-investment that companies derive from investing in reputation moderation system and internal processes.