Study reveals the free, easy way local businesses can make up to $179K more annually
In this 5-minute read:
- Groundbreaking study shows correlation between online reviews and small business revenue
- The one free technique you can do today to earn up to $179K more per year
- 4 BONUS reputation management tips that can boost revenue up to six figures annually
We’ve written before about how important a business’s online reputation is, even for small, local shops. As word of mouth has moved online, what people say about your business on review sites can have serious implications for your bottom line.
But it hasn’t been until recently that we’ve been able to learn exactly how much financial impact online reviews can have on local businesses, or understand which online reputation management techniques are the most profitable and effective.
Womply’s data scientists recently completed a first-of-its-kind study to discover the true impact of online reviews on small business revenue. By analyzing over 200,000 small businesses across the country in dozens of verticals, we were able to detail the financial implications of a business’s star rating, number of reviews, quality and “freshness” of reviews, review engagement (replies), and much more.
Despite what you might think, it turns out that your star rating doesn’t have the greatest impact on your profits.
As you will learn below, there are some simple actions you can take (which are much more within a business owner’s control) that can actually have a greater impact on revenue.
So here are the most profitable—and free—online reputation management practices every small business owner needs to know about.
1. Claim your free listings
Businesses make $179K more per year when they claim their business listings
We’ve been urging small business owners to claim their free online listings for a good while now, but Womply’s study shows very clearly the financial benefit of doing so… and we’re not just talking about a few measly bucks, either.
Womply’s data shows that businesses that have claimed their profiles on 3 or more review sites earn a whopping $107,000 more in annual revenue than the average business in our study, and a cool $179,000 more than businesses that haven’t claimed any listings.
This represents a 60% swing in revenue.
Since it’s easy (and free) to claim these review site pages and there’s huge potential to the upside, every small business owner should make it a priority to claim every relevant online business listing (and keep them current and complete).
Get started by reading our free step-by-step guides:
- 25 free listing sites every small business should be on
- 25 free local advertising ideas for small business
- How to claim your Google Business listing
- How to claim your Yelp business listing
- How to claim your business listing on TripAdvisor
2. Get “fresh” (and authentic) reviews
Businesses earn 52-108% more revenue when they get “fresh” reviews
Womply’s data reveals that small businesses wanting to maximize profits should worry less about getting positive reviews and more about getting “fresh” reviews.
Small businesses in the study with over nine “fresh” reviews (posted in the last 90 days) earn 52% more revenue than the average business, and those with 25 or more recent reviews earn 108% more than average.
Please note: this is without regard to whether the reviews are positive or negative.
3. Get more reviews
Businesses earn up to 100% more revenue when they get more total reviews
The “freshness” of your reviews counts, but so does getting more reviews total.
Businesses with more than 83 total reviews (the average review count of businesses across the study) earn 82% more than businesses with with below-average review counts, and 54% more than the average business.
Businesses with over 200 total reviews earn fully double the revenue of the average business.
But as you’ll see in a second, Womply’s study makes it clear that one of the most beneficial practices small business owners can adopt is to work toward getting a regular supply of real reviews from their customers—regardless of whether those reviews are “good” or “bad.”
You may also like: How to get more reviews
4. Reply to your reviews
Businesses earn up to $166K more annual revenue when they reply to reviews
Replying to reviews isn’t just polite. It can correlate to a huge boost in annual revenue. In Womply’s study, businesses that reply to their online reviews at least 25% of the time earn 35% more than businesses who don’t reply to any.
Furthermore, businesses that reply to at least half of their reviews earn $166,000 more annual revenue than those who don’t reply to any reviews.
5. Don’t stress about your star rating
Chasing a perfect 5-star rating is not a profitable use of your time
Womply’s data shows 5-star-rated businesses actually earn less than 1-star rated businesses. How can this be possible?
Well, if you think about it, shops or restaurants with absolutely no negative reviews might be brand new, unproven businesses (or they may be using unscrupulous tactics like paying for 5-star reviews).
Womply’s data suggests that potential customers may not trust a 5-star-rated business as much as a 3.5 to 4.5-star-rated one with tons of fresh reviews to provide “social proof” and credibility. The most profitable group overall are businesses with a 4 to 4.5 star rating, as they earn 28% more in annual revenue.
As discussed above, a more profitable use of your time and resources than trying to maintain a 5-star rating would be to encourage a regular supply of genuine, recent reviews.
6. Don’t be afraid of bad reviews!
Businesses who have a mix of good and bad reviews earn the most
It’s important to emphasize that bad reviews are just part of the digital landscape, and indeed, they may actually make you appear more credible to potential customers.
As you work to get more reviews, you will naturally get a few less-than-stellar ones coming in. Fear not.
As we’ve written before, smart business owners view negative online reviews as an opportunity to improve their products, facilities, service, and/or staff, and demonstrate to their current and potential customers that they take feedback seriously and are working to continually improve.
Large corporations pay millions to learn what their customers think, but online reviews give you that information for free!
Besides, as shown in the Womply study, negative reviews don’t really hurt a business as bad as we all thought. In fact, businesses in the study whose reviews are up to 35-50% negative still earn nearly the same as the average business.
Customers like to see a lot of fresh, authentic reviews (with plenty of helpful replies posted by the business) in order to feel confident enough to try something new. So, maybe you shouldn’t worry so much about trying to remove or hide negative reviews, but rather work toward getting more, genuine reviews.
For more surprising insights and industry-specific data broken down by state, you can now access the full Impact of Online Reviews on Small Business Revenue report by clicking the link.
Ready to take control of your online reputation?
Managing your online reviews on all the different sites can be a real headache. But you can get a free, personalized demo of Womply’s easy-to-use reputation management software platform that:
- Tracks all of your reviews from popular sites into a single place for easy management
- Automatically posts review responses to save you valuable time
- Helps you encourage more reviews from your best customers
- Shows customer profiles so you know who’s loyal, who’s lapsing, and who’s most valuable
- Much more!
Fill out the form below for your free demo!
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