How do online reviews affect your business?

Study shows: The potential of online reviews is often unused

Most of us order things online. Some have made it a real mastery to get the best product at the best price. At the forefront here are companies and brands that have built a good online reputation. User reviews make a significant contribution to this. But as a study by Capterra recently found out, there is still plenty of room for improvement in review and reputation management in most companies. We shed light on the issue from both the customer and the entrepreneur side.

The findings of the study

To collect the data, Capterra interviewed 500 participants and primarily wanted to find out how important reviews are in Germany and gain insights that can help companies with their online reputation management.

  • Customers trust online reviews more than personal recommendations from friends.

According to the study, 26 percent of customers read online reviews before making any purchase. Only four percent said they never do this. A full 36 percent of the participants said that they would trust online customer ratings the most when buying a product - more than expert opinions or recommendations from friends and acquaintances.

  • Satisfied customers write reviews more often than dissatisfied ones.

77 percent of Germans have already written an online review - 43 percent said they did so to help other users. According to the results of the study, however, most reviews write the very satisfied or very dissatisfied users - very satisfied more often than dissatisfied, which, according to the participants, was partly due to the fact that a bonus was paid for writing the review.

  • Half of customers have never had a response from the company to their customer review.

In terms of the impact online customer reviews can have on a company's reputation, this number is pretty frightening. 60 percent of those surveyed stated that companies do not pay enough attention to customer reviews or pay enough attention. Good customer service and a professional website definitely include reacting to reviews - regardless of whether they are positive or negative.

  • 23 percent of the companies state that they do not react to reviews at all.

When companies were surveyed, it became clear that many had to work on their review management strategy. 84 percent of the companies do not use any software to evaluate their customer ratings and 23 percent stated that they did not react to reviews at all. A full nine percent report or delete negative posts directly.

The cornerstones of a customer review

Due to the amazing initial realization that online reviews are often more trusted than the opinions of friends, it is worth taking a look at the criteria by which customers decide which reviews to trust. The study asked the participants to sort the five cornerstones of a customer review according to importance:

  1. Text comments (46%)
  2. Rating of the product by e.g. stars (29%)
  3. Number of reviews given about the product (15%)
  4. Current date (8%)
  5. Information about the reviewer (2%)

Accordingly, reviews in text form are more important for companies than pure star ratings. In addition, users pay attention to the number of reviews. In a scenario given in the study, 76 percent opted for a product that received three times as many ratings, although it was slightly worse. Users paid different attention to the timeliness of the rating depending on the product sector. Depending on the longevity of the product, 28 percent of participants only trust reviews that were written in the last three months. In the case of household appliances, for example, not so much emphasis was placed on being up to date.

With one of the most important reasons why customer ratings are so important online: Local shops in particular benefit from positive reviews, as these affect visibility on Google. The number, frequency and variety of reviews - as reported in the Local Search Ranking Factors Report 2017 by SEO company Moz - have an impact on where the company is listed. One of the places in the “Local Pack” is particularly popular, the three results that are highlighted when searching on Google Maps when searching for “Italian Hamburg”, for example.

Ultimately, the study only supports what should actually be clear to everyone: Online customer ratings are of crucial importance for a company's reputation online, and anyone who treats them incorrectly or even ignores them is wasting the opportunity to further expand their company.