A special report from Womply Research

How do online reviews impact revenue for bars and lounges?

If you've read our full report, you've already got a sense for just how important review sites are for local businesses. But what about local bars, lounges, pubs, nightclubs, cocktail joints and the like?

Are reviews more (or less) influential on revenue for local bars and lounges than other types of local businesses?

Impact of Reviews on Revenue page masthead graphic. A special report from Womply Research.

To understand the correlation between reviews and revenue for bars, Womply's data science team conducted an in-depth analysis of transactions and online review data for more than 2,500 bars in every state.

Key findings include

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Local bars and lounges that claim their free listings on 3 or more review sites earn 49% more revenue

Bars and lounges that don't reply to any reviews earn 11% less revenue

4.5 to 5-star rated bars and lounges earn below-average revenue—the sweet spot is 3.5 to 4.5 stars

Bars and lounges with more than the average number of reviews bring in 66% more in annual revenue

Bars and lounges whose total number of reviews are 20-25% negative earn 4% more annual revenue than bars whose reviews are 5-10% negative

Go deeper by reading our analysis for businesses in a different industry.

Claiming free listings

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Bars and lounges that claim their listing on multiple review sites make more money

Key findings include

Bars and lounges that claim their free listings on 3 review sites earn 49% more revenue

Bars and lounges that don't claim their listing on any review sites earn 26% less revenue

31% of bars and lounges haven't claimed any listings

Google is the most important review site for local bars to claim their listing

The average annual revenue across all bars and lounges in our study was $241,000. As with all business in our study, we wanted to start our analysis on the importance of review sites on revenue at bars and lounges by first focusing on simple acts like claiming your free profile on prominent review sites.

As you can see above, claiming listing site profiles is extremely important for bars and lounges. Those who don't claim their profile on one of the major listing sites earn 26% less revenue than the average bar in our study.

And, unlike some other industries, claiming just one review site listing wasn't enough for local bars and lounges to earn average or above-average revenue numbers. But things change quickly the more review sites local bars and lounges claim.

When bars and lounges claim their free listings on review sites, it gives them the ability to reply to reviews, add helpful information about their business, and plenty of other things that clearly make an impact on curious potential patrons.

To see how much of an impact this might make on revenue, look at the results this way—bars and lounges who follow the simple practice of claiming their free listing on three or more of the major review sites (Google, Yelp, Facebook, TripAdvisor, etc.) earn $119,000 more each year than those that don't claim any of their free listings.

Customers use Google Maps more often to look for local bars and lounges than any other platform. This is likely the reason why local bars who claim their Google listings experience the largest increase in revenue.

No matter which way you look at it, though, bars and lounges should be claiming their business listing on every relevant review site. Bars who don't claim their listing on any of the three major review sites all earn far less than average.

Go deeper by reading our analysis for businesses in a different industry.

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Replying to reviews

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People spend more money at local bars and lounges that reply to reviews

Key findings include

75% of bars and lounges don't respond to any reviews

Bars and lounges that respond to reviews between 1 and 25% of the time earn 37% more than average

Bars that don't reply to any reviews earn 11% less in annual revenue

Bars and lounges that respond to even just one review earn 13% more than average

It's clearly important for bars and lounges to claim their listings on as many review sites as possible, but they shouldn't stop there.

Our analysis reveals that, perhaps even more than other industries, bars and lounges should focus as well on engaging with their customers by responding to reviews.

A substantial 75% of bars and lounges in our study hadn't responded to even a single review, which goes to show just how few businesses are taking advantage of this simple practice. Let's see how it impacts revenue for local bars and lounges.

As you can see in the charts above, bars and lounges who don't respond to reviews should start considering doing so.

Bars and lounges who don't respond to any reviews earn 11% less than average, while those who responded on a more frequent basis, up to 25% of the time, earn 37% more than average. As reply rate climbs to more than 25%, revenue dips slightly.

This is likely because bars and lounges with a large number of total reviews may be likely to earn more money than average, but may also be more likely to have a much lower review response percentage.

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

Again, the vast majority of bars (75%) don't respond to reviews at all, but bars and lounges that respond to just one review earn 13% more than average. And as you might expect, bars with a higher number of review responses earn more than those with a lower number of responses.

By the time you get to bars with more than 20 review responses, they're earning over $105,000 more each year than average.

It appears that for bars and lounges, a little goes a long way when it comes to engaging customers through online reviews. So local bar owners should consider taking the time to post thoughtful responses to both positive and negative reviews on their online review sites.

Go deeper by reading our analysis for businesses in a different industry.

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Star ratings

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How much does star rating impact revenue for bars and lounges?

Key findings include

Bars and lounges with a rating between 3.5 and 4.5 stars earn the most revenue

5-star bars earn 35% less than the average

Bars and lounges with a 3.5 to 4-star rating earn 11% more than average

Only 2% of bars have lower than a 3-star rating

Now that we've discussed things that a bar or lounge owner can control when it comes to review sites, let's get into the reviews. We'll begin with what many owners consider the most important part of their online presence—their overall star rating.

The chart below illustrates how much the average star rating matters to revenue at bars and lounges.

As you can see, bars and lounges appear to be more sensitive to negative ratings than other industries. Bars and lounges with a star rating of 2.9 or lower earn 34% less than average, which is a much larger drop than businesses across all industries.

Bars and lounges with a star rating between 3.0 and 4.5 earn more than the average bar, with those between 3.5 and 4.0 earning the largest increase on average.

Finally, bars with a perfect 5-star rating earn nearly the same as those with a rating of 2.9 stars or lower. Once again, our hypothesis here is that perfectly rated bars and lounges are more likely to be newer and less established than their 4-star competitors.

When you consider that 92% of bars and lounges in our analysis had a between 3.5 and 4.9 stars, you can see why star rating may not have as much an impact as other things like total number of reviews.

Go deeper by reading our analysis for businesses in a different industry.

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Number of reviews

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How much does the number of reviews matter for bars and lounges?

Key findings include

Bars with more than the industry average of 156 total reviews earn 66% more in annual revenue than average

Bars and lounges with fewer than 156 total reviews earn 23% less in revenue than average

Locations with 300 reviews or more earn 89% more than average

An above-average number of reviews on Google has the largest positive impact on revenue of all review sites

Bar owners often stress about their star rating, but as we detailed in the section above, average star rating isn't always the clearest indicator of financial success for local bars and lounges.

On the other hand, our findings suggest that bar owners should perhaps focus more on increasing their number of reviews than almost anything else.

Bars and lounges in our analysis average a combined 156 reviews per business across all review sites. This is nearly twice the number of reviews for the average business across all industries, suggesting bars and lounges may need to gather more reviews than other types of businesses in order to stand out online.

To test our hypothesis, we started by analyzing revenue at bars and lounges whose review counts fall above and below that average 156-review threshold.

As suspected, total number of reviews is indeed extremely important for local bars. Those who have more than the average number of reviews earn a substantial 66% more in annual revenue than the average bar.

Those with fewer than 156 reviews, meanwhile, earn 23% less.

Looking closer at the numbers helps further clarify the relationship between the number of reviews and average revenue for local bars and lounges.

Bars and lounges with fewer than 25 reviews earn a staggering 43% less than average, and bars with up to 75 reviews don't fare much better. It's not until bars get between 76 and 156 reviews that they start to more frequently earn above average revenue.

Then, as you can see, the more reviews a bar or lounge gets, the more money they earn.

Annual revenue at bars, pubs, lounges, night clubs, etc. with more than 300 reviews is a whopping $215,000 more than the average bar and lounge business in our study.

This is clear evidence that when a customer searches online for a place to grab a drink, a large number of reviews outweighs a high star rating.

Once again Google is clearly the most important review site for bars and lounges, as those with an above-average review count here earn 62% more than average.

But still, local bars and lounges should work to get as many reviews on as many sites as possible. Some bar owners worry that pushing for reviews may expose them to getting more bad reviews, but as we'll explain in a section below, bad reviews can actually be a good thing.

Go deeper by reading our analysis for businesses in a different industry.

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Fresh vs stale reviews

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Fresh reviews are crucial for bars and lounges

Key findings include

Bars and lounges average 18.8 fresh reviews (posted in the last 90 days)

Locations with more than 18 fresh reviews earn 57% more than average

Bars and lounges with less than 18 fresh reviews earn 17% less than average

Bars and lounges with 30 or more fresh reviews earn 73% more than average

The number of reviews a bars or lounge has on review sites is clearly important, but how important is the "freshness" of those reviews?

The average total number of fresh reviews, (defined as reviews posted within the past 90 days) per bar in our analysis was 18.8. This is twice as many as the average across all industries, continuing the trend of bars and lounges receiving more consistent reviews than some other businesses.

To see how much fresh reviews affect a bar's revenue, we analyzed businesses that had received fewer or greater than 18 reviews in the past 90 days.

As you can see above, getting new reviews is just as important for bars and lounges as amassing a lot of total reviews.

Bars that don't bring in any fresh reviews in the past 90 days earn 30% less revenue than average. Getting more than the average number of new reviews, on the other hand, correlates with a hefty 57% increase in revenue!

A closer look shows just how important fresh reviews can be for bars and lounges. Bars with just 1 to 10 fresh reviews didn't do any better than those with no fresh reviews. But as bars approach the average range (11 to 20 fresh reviews), they earn 16% more than average.

From there, you can see how quickly average annual revenue grows as bars and lounges amass more fresh reviews. By the time you get to bars who have 30 or more fresh reviews, annual revenue is 73% more than the average local bar or lounge.

Put another way, getting just 10 new reviews per month correlates with an extra $175,000 each year for local bars and lounges.

The takeaway is that bars and lounges should focus on getting a steady stream of real, recent reviews rather than trying to chase a perfect star rating. And, even a handful of fresh reviews clearly holds more weight than glowing reviews from last year.

Go deeper by reading our analysis for businesses in a different industry.

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Impact of negative reviews

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Patrons expect to see negative reviews of bars and lounges

Key findings include

19% of the average bar's reviews are negative

Bars and lounges whose reviews are 10 to 15% negative earn the most

Bars and lounges whose reviews are 0 to 5% negative earn 21% less than average

Bars and lounges whose reviews are 20 to 25% negative earn 4% more than the average bar

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

On average, 19% of the reviews posted about a given bar or lounge were negative. This puts bars and lounges right at the average negative review rate across all industries.

Does this mean bars and lounges are more or less affected by a large number of negative reviews? Let's find out.

For the most part, negative review rate appears to have little impact on revenue at bars and lounges.

As with other industries, bars and lounges with a healthy mix of good and bad reviews earn the most on average. The ideal range is a negative review rate between 5% and 35%, with bars whose reviews are 10% to 15% negative averaging the largest increase in revenue at 8%.

Bars and lounges do appear to be more vulnerable to an extremely large percentage of bad reviews than other industries. Those whose reviews were 75% to 100% negative earn 31% less than average.

But, like other industries, bars whose reviews were only 0% to 5% negative earn far less than average.

When customers browse bars or lounges on review sites, they likely expect to see some negative reviews. In fact, many customers actively seek out negative reviews first, and a bar or lounge with little or no negative reviews might appear untested or even a little "too good to be true."

Our takeaway: bars and lounges that focus on getting as many real reviews as possible reap the rewards.

Go deeper by reading our analysis for businesses in a different industry.

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Kindest and harshest states for reviews

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Where in the U.S. are consumers kindest (and harshest) to bars and lounges in reviews?

Next we analyzed online reviews at a state-by-state level to see which parts of the country are kindest (and harshest) in their reviews of local bars and lounges.

*Note: There was insufficient data for bars and lounges in the following states: Vermont, Hawaii, Delaware, Rhode Island, New Hampshire, Alaska.

rank state positive review rate
FL TX NM AZ AK CA NV UT CO OR WA ID HI OK MT WY ND SD NE KS MN IA MO AR LA MS AL GA SC IL WI MI IN OH TN KY NC WV VA PA NY ME VT NH RI CT NJ DE MD MA DC

North Dakota's bars and lounges were the best-reviewed in the country, averaging a positive review rate of 91%. Southern states round out the top five with Tennessee, Arkansas, South Carolina, and Alabama bars all holding positive review rates above 86%.

Bars and lounges across the country are generally well-reviewed, however. Even the lowest state on the list, Georgia, has a 76% positive review rate.

Go deeper by reading our analysis for businesses in a different industry.

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States best at managing online presence

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Where in the U.S. are bars and lounges the best at managing their online presence?

Next we looked at which states' bars and lounges were the best at managing their online presence. We started by analyzing the percentage of bars and lounges in each state that had claimed at least one review site listing.

*Note: There was insufficient data for bars and lounges in the following states: Vermont, Hawaii, Delaware, Rhode Island, New Hampshire, Alaska.

rank state claimed at least one listing
FL TX NM AZ AK CA NV UT CO OR WA ID HI OK MT WY ND SD NE KS MN IA MO AR LA MS AL GA SC IL WI MI IN OH TN KY NC WV VA PA NY ME VT NH RI CT NJ DE MD MA DC

89% of New Jersey's bars and lounges had claimed at least 1 review site listing, which was good for the top spot on our list. Virginia, Florida, New York, and North Carolina also had over 80% of their bars and lounges claim at least 1 review site listing.

On the other end of the spectrum, 67% of the bars and lounges in our analysis from Utah and Mississippi haven't claimed a single listing, putting them at the bottom of the list.

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

rank state responded to at least one review
FL TX NM AZ AK CA NV UT CO OR WA ID HI OK MT WY ND SD NE KS MN IA MO AR LA MS AL GA SC IL WI MI IN OH TN KY NC WV VA PA NY ME VT NH RI CT NJ DE MD MA DC

Virginia's bars were the most engaged in our list, with 59% of local bars responding to at least one review. Maine was a close second with 50% of bars having responded to at least one review.

South Dakota and Mississippi bars were the least engaged, as not a single one of the bars in our study from either of those states had responded to at least one review.

Go deeper by reading our analysis for businesses in a different industry.

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Conclusion

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Conclusion

In the digital age, online reviews are the new word of mouth. Local bars and lounges that engage customers online perform better financially than those that don't.

Specifically, local bars and lounges experience the best revenue performance when they:

  • Claim all their free business listings on relevant review sites
  • Are highly responsive to customer feedback posted on review sites
  • Get and maintain a star rating between 3.5 and 4.5 on key review sites
  • Receive a steady flow of authentic reviews from real customers
  • Have an authentic review profile, comprised of about 10-20% negative reviews

Go deeper by reading our analysis for businesses in a different industry.

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