How do online reviews impact revenue for auto service businesses?

It's clearly important for auto service businesses to claim their free review site listings, but a business owner shouldn't just stop there. Our analysis reveals that as customers search for local auto service shops, one of the things they're looking for is a business that engages with customer reviews.

76% of all auto service businesses in our analysis haven't responded to a single review, and those businesses earn 3% less in annual revenue.

Once businesses engage with their customers online by replying to reviews, though, revenue starts to go up. Auto service businesses who responded to just even just one review earn $18,000 more each year than the average auto service business.

As you can see in the charts above, auto service businesses that engage with their customers by replying to online reviews earn more revenue. Auto service businesses that reply to their reviews between 1 and 25% of the time earn 19% more revenue than average.

Interestingly, the increase in revenue stays the same even as auto service shops reply to 25% to 50% of their reviews, and drops slightly when the review rate raises to 50% or more.

This could be because busy auto service businesses with a large number of total reviews are more likely to earn more money than average, but are also much more likely to have a much lower review response percentage.

This becomes clear when you look at auto service business revenue by total number of review responses:

Auto service businesses that responded to at least 1 review responded to a total of 14 reviews on average.

Shops who respond to even just a handful of reviews earn more than the average shop, and revenue rises as total response count increases.

Auto service businesses who respond to 8 to 25 reviews earn a substantial 20% more than average, while those who respond to more than 50 earn a whopping $136,000 more each year than the average shop.

When it comes to responding to reviews, it's clear that auto service businesses should focus primarily on giving thoughtful and meaningful responses to both negative and positive reviews.

As we'll expand on in the sections below, getting more reviews is clearly important, but staying engaged with customers in a real and meaningful way can make a clear difference.

Auto service business owners often worry about their star rating, but as you can see in the section above, star rating has a more limited impact on revenue. On the other hand, our findings suggest that auto service business owners should perhaps focus much more on increasing the number of reviews than almost anything else.

Auto service businesses in our analysis averaged 32 reviews across all review sites. This is significantly less than the 82.5 average across all businesses, suggesting auto service businesses may need to work a little harder than other industries to get reviews.

We analyzed the revenue of businesses whose review counts fall above and below that average 32 review threshold.

The results of this analysis revealed a positive correlation between review count and sales revenue, although not quite as strong as for some other industries.

Auto service locations with more than the average number of reviews earn 13% more in annual revenue than businesses with review counts below the average. While this is quite a bit less than the increase experienced by small businesses across all industries, it's still clear that more reviews correlates with more money for auto service businesses.

This gets clearer when you take an even closer look at revenue by review count.

Auto service locations with 5 reviews or fewer earn 17% less than the average auto service shop. Revenue approaches average when auto service locations have a total of 11 to 31 reviews. And as total number of reviews goes up, so does average annual revenue.

Auto service businesses with 51 to 100 reviews earn 17% more, and those with more than 100 reviews earn 26% more than average, suggesting that a large number of reviews carries a lot of weight in the minds of customers searching for auto service businesses online.

When it comes to number of reviews on specific review sites, Google is the most important for auto service businesses. Auto service shops with an above-average review count on Google earn 19% more than the average business, while those without earn 5% less.

While Yelp and Facebook are less-popular platforms for auto service businesses, there's nothing but upside for auto service businesses who actively get reviews on those sites.

But regardless of the platform, local auto service shops would be well-advised to get as many reviews on as many sites as possible. Even if some of those are negative reviews (which isn't necessarily a bad thing, as we'll explain later in this report), there's little question that customers put more value in a higher number of reviews than they do in a 5-star rating.

It's clearly important to get a steady stream of fresh reviews, but how important is the mix of positive vs. negative reviews?

On average, 17% of reviews posted about auto service businesses are negative, which is slightly less than the 19% average across all industries. However, as we saw when we evaluated revenue by average star rating, auto service businesses seem to be less affected by bad ratings than other businesses.

Let's take a look at how much the total number of negative reviews impacts revenue at auto service businesses.

Indeed, these findings also show that auto service businesses are far less affected by bad reviews than other industries. As is the case with those other industries, the auto service businesses who earn the most money on average are those with a mix of positive and negative reviews. However, it's surprisingly the businesses with a negative review rate of 50-75% who earn the most.

Now, this is most likely due to a variety of factors, like the types of auto service businesses who consistently fall into this range as well as other factors. So one shouldn't assume that a 50 to 75% negative review rate is the ideal place for auto service businesses to be.

When customers browse auto service business listings on review sites, they expect to see a certain amount of bad reviews. And a listing with little to no negative reviews might look untested or even suspiciously guilty of buying fake reviews.

There's no question that auto service businesses should focus on getting as many real reviews as possible, and not losing sleep about how many of those reviews end up being negative.

Finally, we looked at which states' auto service businesses were the best at managing their online presence. First we looked at the percentage of auto service businesses in each state that had claimed at least one review site listing.

87% of Minnesota auto service businesses have claimed at least 1 business listing, which is good for the top spot nationwide. Arizona and Delaware tied for second with 82%, and Rhode Island third with 81%.

On the other end of the spectrum, 45% of auto service shops in West Virginia haven't claimed even a single listing, putting the Mountain State at the bottom of the list.

Lastly, we looked at how frequently businesses in each state responded to their reviews.

Auto service businesses in Arizona and Oregon were the most engaged, with 35% of listings having responded to at least one review. Fellow western states Utah and Colorado came close behind with 34% and 33%, respectively.

West Virginia and Vermont auto service businesses were the least engaged, with only 9% of businesses having replied to at least one review.