Negative reviews — there’s nothing particularly helpful about them. They can tarnish your reputation, damage your SEO, and ultimately drive people away from your business. If you continue with this line of thinking, it’s fair to say negative reviews can hurt your overall revenue. And if you sit down and work out the actual numbers of how much you stand to lose, things can get scary fast.
Measuring the ROI of your online reviews can be helpful. It allows you to see how a review, positive or negative, can affect business. When you quantify your reviews like this, you’ll see how important online reviews truly are — and you’ll be more motivated to do everything you can to get good ones, helping improve the public perception of your business online.
In this article, you’ll learn why ROI is so important, how to come up with an ROI for your online reviews, and what steps you can take to reduce negative reviews as much as humanly possible. Let’s get to it.
Why Is ROI Important For Online Reviews?
In business, every investment and expense has an ROI (return on investment). Including your online reviews. You spend time, effort, and money to ask customers for reviews. That’s your investment — and of course, the reviews you receive (or don’t receive) and the resulting leads and conversions are your return.
It’s good to know what kind of response you’re getting so you can understand whether there are any changes you need to make to your business processes, the way you ask people for reviews, or your overall customer experience.
How to Find ROI For Online Reviews
The first step is figuring out how much it costs you to source reviews. Do you pay for a social listening tool to help you catch reviews around the web? Or do you spend a couple of hours each week responding to negative reviews? This is your investment – both monetary and time-based.
You also want to track how many leads and conversions you get from online reviews (the good ones, obviously). You can do this by using stats. Then, plug the numbers into this formula:
Total income (revenue earned) / cost of investment (revenue lost) x 100 = ROI
Next, you want to know how many customers you’re losing from negative reviews. You may never be able to calculate this percentage with any degree of accuracy, but for the sake of this example, we’ll use this statistic from Moz as a placeholder: If a business has a single negative review on page one of Google, it can lose up to 22% of customers who were considering making a purchase.
In this case, we’ll use the following ROI formula:
Y = X / (100 – X)
Y will be the average percentage of customers lost (22%) and X is how many more customers your company would have had. Y = 22 / (100-22), so Y = .2. As Moz stated, you could have had 22% more business with better online reviews.
Is this number entirely accurate? Maybe not. But it still serves as a helpful visualization, making one thing all too clear: Negative reviews can do some major damage to your business.
Can You Do Anything About Negative Reviews?
The more negative reviews you accumulate online, the more your business, customer base, and revenue are going to take a hit. 86% of shoppers are reluctant to make a purchase from a business that has negative reviews.
Some business owners think they should delete negative reviews. If no one can see them, you’re set, right? Unfortunately not. Unless the reviews are clearly spam, this isn’t the best method of dealing with them. Letting negative reviews remain shows a level of transparency your customers appreciate. If people only see positive reviews of your brand, they get suspicious — wondering how not one single person has had a less-than-stellar experience.
Instead, take action in a different way. Create a business profile on review sites, like Sitejabber, so you can respond to negative reviews as quickly as possible. This might sound something like:
Hi [first name], we’re so sorry to hear about your recent experience shopping with our online store. We strive to provide a smooth experience for our customers, and [restate the problem] is never our desire. Please send us an email at [email address] with your order number so we can make this right. Thanks for your patience.
When reviewers see that you’re willing to listen to complaints, they’re more likely to delete their review or raise their initial rating. And it’s helpful for others to see your public response — reassuring them of the way you handle an unsatisfied customer.
How to Get Better Online Reviews
ROI can be confusing. But finding the ROI of your online reviews can be a helpful way to discern whether your investment (the time, money, and effort you spend getting online reviews) is working. Once you know your ROI, the next step is to tweak your methods, pushing what works to get positive reviews and taking the correct steps to address negative ones. These are a few of the best ways you can help your review ROI improve.
