A special report from Womply Research

How do online reviews impact revenue for health and beauty businesses?

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 health and beauty businesses like hair salons, day spas, nail salons, and the like?

Are reviews more (or less) influential on revenue for health and beauty businesses 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 health and beauty businesses, Womply's data science team conducted an in-depth analysis of transactions and online review data for more than 20,000 health and beauty businesses in every state.

Key findings include

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Health and beauty businesses that claim their free listings on 3 or more review sites earn 18% more revenue

Health and beauty businesses that don't reply to any reviews earn 5% less revenue

5 star rated health and beauty businesses have below-average sales—the sweet spot is 3 to 4.5 stars

Health and beauty businesses with more than the average number of reviews bring in 26% more in annual revenue

Health and beauty businesses whose total number of reviews are 25-35% negative average 20% more annual revenue than businesses 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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Health and beauty businesses that claim their listing on multiple review sites make more money

Key findings include

Health and beauty businesses that claim their free listings on at least 3 review sites earn 18% more revenue than the average health and beauty business

Health and beauty businesses that don't claim their listing on any review sites earn 20% less revenue

23% of health and beauty businesses haven't claimed a single review site listing

Google is the most important free listing site for health and beauty businesses

The average annual revenue across all health and beauty businesses in our study was $147,000. As with all businesses in our study, claiming your profile on more review sites correlated with more annual revenue.

Health and beauty businesses that don't claim their profile on one of the major listing sites earn 20% less revenue than the average health and beauty business. Meanwhile, those who claim even just one free listing profile earn 3% more.

As with other industries (although to a lesser degree), health and beauty businesses that claim their listing on multiple review sites earn more than those who only claim their listing on one site.

Health and beauty businesses who follow the simple practice of claiming their free listings on Google, Yelp, and Facebook average $55,000 more each year than those that don't claim any of their free listings.

More customers use Google maps to look for salons or spas in their neighborhood than ever before. Which is a likely reason why health and beauty businesses who don't claim their Google listing experience the largest decrease in annual revenue.

No matter which way you look at it, though, health and beauty businesses should be claiming their business listing on every review site.

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 health and beauty businesses that reply to reviews

Key findings include

77% of health and beauty businesses don't respond to any reviews

Health and beauty businesses that respond to even 1 review earn 12% more than the average health and beauty business

Health and beauty businesses that don't reply to any reviews earn 5% less in annual revenue

Health and beauty businesses that reply to reviews on a semi-regular basis earn 20% more in annual revenue

It's clearly beneficial for health and beauty businesses to claim their listings on as many review sites as possible, but they shouldn't just stop there. Our analysis shows that as customers search for salons and spas, one of the things they're looking for is a business that engages with customer reviews.

77% of all health and beauty businesses in our analysis haven't responded to a single review, and those businesses earn 5% less in annual revenue.

Once businesses engage with their customers online by replying to reviews, though, revenue starts to go up. Health and beauty businesses who respond to just even one review earn $17,000 more each year than the average health and beauty business.

As you can see in the charts above, health and beauty businesses show more revenue when they engage with their customers via online reviews. Health and beauty businesses that reply to their reviews between 1 and 25% of the time earn 18% more revenue than the average.

Interestingly, health and beauty businesses that reply to more than 25% or 50% of their reviews earn slightly less than those who reply more infrequently.

This is likely because health and beauty businesses with a huge number of total reviews are more established, busy businesses that earn more money than average and are more likely to have a much lower review response percentage.

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

Health and beauty businesses that responded to at least 1 review respond to a total of 11 reviews on average. Again, even health and beauty businesses that respond to just one review earn more than the average.

Health and beauty businesses who respond to more than the average number of 11 reviews earn 14% more than average, while those who respond to more than 50 reviews report more than $60,000 more annual income than those who don't respond to any reviews.

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

As we'll elucidate below, earning more reviews is indeed important, but staying engaged with clients in a meaningful way makes a real difference.

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 a health and beauty business's star rating impact revenue?

Key findings include

Health and beauty businesses with a rating between 3 and 4 stars earn more revenue than any other rating

5 star businesses earn less in revenue than 1 to 1.5 star businesses

Health and beauty businesses with a 3 to 4 star rating earn 22% more in annual revenue than the average

Only 6% of health and beauty businesses have lower than a 3-star rating

Now that we've covered some factors that health and beauty businesses can control when it comes to review sites, let's address the reviews themselves. We'll start with what many health and beauty business owners consider the most important part of their online presence—their star rating.

The chart below illustrates how much the average star rating matters to revenue at health and beauty businesses.

The sweet spot for health and beauty businesses is from 2.5 stars to 4.5 stars, with 3 to 4 star businesses showing the highest average revenue.

Interestingly, health and beauty businesses appear to be less sensitive to low ratings than other industries. Not only do health and beauty businesses with 2 to 2.9 star ratings actually earn more than the average, but businesses with a 1 to 1.9 star rating experience a smaller decrease in revenue than businesses in other industries.

5 star health and beauty businesses also average far less revenue than the typical health and beauty business. As with small businesses in other industries, this is possibly because most 5-star-average salons, spas, etc. have fewer reviews, are less established, or may be guilty of unscrupulous methods like paying for fake reviews.

Nearly all health and beauty businesses (94%) have a star rating between 3.0 and 4.9 stars, suggesting customers take a lot more than just star rating into consideration when searching for health and beauty businesses online.

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 health and beauty businesses?

Key findings include

Health and beauty businesses with more than 42 total reviews earn 26% more in annual revenue than average

Health and beauty businesses with less than 42 total reviews earn 11% less in revenue than average

Health and beauty businesses with 200 reviews or more earn 43% more than average

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

Health and beauty business owners often stress about their star rating, but our findings suggest they should focus more on increasing the number of reviews than almost anything else.

Local health and beauty businesses in our analysis averaged 42.6 reviews on review sites. This is significantly less than the 82.5 average across all businesses, suggesting health and beauty businesses may need to work a little harder than other industries to get reviews.

We analyzed the revenue of health and beauty businesses whose review counts fall above and below that average 42.6 review threshold.

The results of this analysis show a strong positive correlation between sales revenue and review count.

Health and beauty businesses with more than the average number of reviews bring in 26% more in average annual revenue than those with below-average review counts, while businesses with less than the average number show 11% less average annual revenue.

The results of this analysis show a strong positive correlation between sales revenue and review count.

Health and beauty businesses with more than the average number of reviews bring in 26% more in average annual revenue than average, while businesses with less than the average number show 11% less average annual revenue.

Taking a deeper look at the numbers, we see an even more distinct relationship between the number of reviews and average revenue.

Health and beauty businesses with fewer than 10 reviews earn far less than the average, while those with between 10 reviews and the average 42 earn much closer to the average business.

Average annual revenue at health and beauty businesses with more than 200 reviews is 40% more than the baseline average, showing just how important review count is for local spas and salons hoping to stand out from the crowd.

Google is far and away the most important when we look at individual review sites. Health and beauty businesses with an above average number of reviews on Google earn 38% more than average.

A lower review count on the platform isn't necessarily damaging, but with the massive upside it's clear that health and beauty businesses should focus on getting legitimate and honest Google reviews from as many real customers as possible.

Even if businesses get some negative reviews (which isn't the end of the world, as we'll explain later), there's little question that customers put value a healthy number of reviews more than a 5-star rating.

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 health and beauty businesses

Key findings include

The average number of fresh reviews (posted within the past 90 days) per health and beauty business is 4.5

Health and beauty businesses with more than 4 fresh reviews earn 30% more than average

Health and beauty businesses with no fresh reviews earn 22% less than average

Health and beauty businesses with more than 12 fresh reviews earn 35% more in annual revenue the average businesses

The number of reviews a health and beauty has on review sites is clearly important, but how important is the "freshness" of those reviews?

For health and beauty businesses, the average total number of fresh reviews (reviews posted within the past 90 days) in our analysis was 4.5. This is about half as many fresh reviews as the average business across all industries, continuing the theme of health and beauty businesses receiving fewer consistent reviews than some other businesses.

So we first looked at how much it impacted health and beauty business' revenue if they'd received more or fewer than 23 reviews in the past 90 days, or if they'd received no new reviews at all.

As you can see, getting fresh reviews is extremely important for health and beauty businesses. Those who don't bring in any new reviews in the past 90 days earn 27% less than average. Getting a few fresh reviews helps, but engaging consistently is clearly important, as those with a below average number of fresh reviews (1 to 4) earn 5% less than average.

Getting more than the average number of fresh reviews, on the other hand, correlates with a 27% increase in revenue. We can speculate that consumers place a premium on recent reviews and are more likely to patronize a spa or salon with more fresh customer feedback.

Breaking this down even further we can see that health and beauty businesses with just 3 to 5 fresh reviews (again, fresh means posted within the last 90 days) earn 9% more than those with zero new reviews.

Health and beauty businesses who get more than 12 fresh reviews, meanwhile, earn 35% more than average. Put another way, getting just 4 new reviews per month correlates with an extra $50,000 each year for local spas, salons, and other health and beauty shops.

The takeaway is that health and beauty businesses should focus on getting a steady stream of new,legitimate reviews rather than trying to chase a 5-star rating. And, even a handful of recent reviews clearly holds more weight than rave reviews that are a year old.

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

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Impact of negative reviews

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Customers expect to see negative reviews of health and beauty businesses

Key findings include

20% of the reviews the average health and beauty business receives are negative

Health and beauty businesses whose reviews are 25-35% negative earn 20% more in annual revenue than those whose are 5-10% negative

Health and beauty businesses whose reviews are 0-5% negative earn 26% less than average

Health and beauty businesses whose reviews are 50-75% negative still earn 6% more than average

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

Here's we see revenue at health and beauty businesses based on what percentage of their reviews are negative.

These findings demonstrate that while the number of reviews is important, when it comes to quality it's all about authenticity. Particularly when it comes to health and beauty businesses.

As with businesses across all industries, the health and beauty businesses who earn the most money on average are those with a mix of positive and negative reviews. In fact, health and beauty businesses appear to be even more impervious to a large percentage of negative reviews than the average business in other industries.

Health and beauty businesses whose total number of reviews are 25-50% negative average 20% more in annual revenue than businesses whose reviews are 5-10% negative! Even businesses whose reviews are 50 to 75% negative earned more than average.

Now, this is likely due to multiple factors, like the businesses in that sample having a larger total number of reviews, but it's clear that business owners shouldn't lose sleep over getting a bad review or two.

When customers browse spa, salon, and other health and beauty business listings on review sites, they may expect to see a certain amount of bad reviews. And a listing with little to no negative reviews might look unproven or even suspiciously guilty of unethically soliciting reviews.

Our takeaway: health and beauty businesses that focus on getting as many real and authentic 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 health and beauty businesses 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 health and beauty businesses.

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

New England is home to the most positive health and beauty business reviewers, as Maine, New Hampshire, and Vermont top the list of highest average positive review rates. South Dakota, Nebraska, and Minnesota fall close behind, all with average positive review rates above 83%.

Overall, though, Americans in every state are generally favorable in their reviews of local health and beauty businesses. Even the three lowest-ranked states—Hawaii, Oklahoma, and Nevada—all averaged between 73% and 75% positive reviews. This suggests that people are more likely to post positive reviews than you may have been led to expect.

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 health and beauty businesses the best at managing their online presence?

Finally, we looked at in which states health and beauty businesses manage their online presence best. First we'll note the percentage of health and beauty businesses in each state that had claimed at least one review site listing.

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

88% of Hawaii's health and beauty businesses have claimed at least 1 business listing, which earns them the top spot nationwide. Montana came in second with 87%, and Rhode Island, Arizona, and Nevada all tied for third with 84% of their health and beauty businesses having claimed at least 1 listing.

On the other end of the spectrum, 38% of businesses in Louisiana haven't claimed even a single listing, putting the Pelican State at the bottom of the list. Mississippi, Wyoming, Arkansas, Oklahoma, and Kentucky also all saw over 30% of their health and beauty businesses not claiming any review site listings.

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

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

Rhode Island health and beauty businesses are the most engaged with their reviewers, averaging a response rate of 29.8% among businesses who responded to at least one review. North Dakota came in close behind with a response rate of 28.3%.

Montana health and beauty businesses were the least engaged out of all states, averaging a reply rate of 8.2% among businesses who 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

Online reviews are a proxy for word of mouth in the digital age. Local health and beauty businesses that recognize and respond to how consumers use the internet to find, evaluate, and choose where to spend perform better financially than those that don't.

Specifically, local health and beauty businesses 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 3.0 and 4.5 on key review sites
  • Receive a steady flow of authentic reviews from real customers
  • Have a credible review profile, comprised of about 15-35% negative reviews

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

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