Regardless of the size of your business consumers often turn to the Internet to research a product before buying.

Online reviews can make or break you and it’s a difficult game to monitor and mange that’s for sure, but it’s one that can’t be ignored.
(see the infographic below)

According to Marketing professors Duncan Simester of the Massachusetts Institute of Technology and Eric Anderson of Northwestern University who carried out a study based on reviews posted on the website of a major private-label apparel company.

The practice of cyber-shilling (businesses posting negative reviews of their competitors, or rewarding users to write glowing reviews) is alive and well.

The duo found that about 5 percent of the reviews were written by customers with no record of actually buying the item. Those reviews were “significantly more negative” than the others.

While referrals are timeless it seems that over 72% of consumers will trust an online review as much as a personal recommendation. What’s more the proliferation of online review sites have mimimised the influence of traditional print based advertising (including coupons) on people’s buying decisions.

Are negative review really so bad for your business?

Well Yelp reports that higher rated restaurants are generally fully booked where as lower rated ones are only 1/3 filled.

And a study out of Berkly showed that a half-star improvement resulted in a 30-49% increase in site visits and sales.

Those bogus reviews have consequences, Simester said.

We have some evidence that these negative reviews do drive purchasing decisions and can reduce sales. Low ratings result in significantly less demand for an item for at least 12 months.


So how does this tie back to your business?

We recommend that you ask the following questions:

  1. Are you currently monitoring your online reputation?
  2. Are you receiving notifications when bad reviews are posted?
  3. Are you responding to them?
  4. Are you seeking ways to address customer negative experiences as a preventative to then posting a negative review?

Creating a business wide strategy for addressing honest negative customer experiences, and also bogus negative reviews may be key to managing your reputation.

If you need assistance with your reputation management we recommend Maya Mendoza and her team at Milagro Fusion Marketing


Are online reviews hurting or helping your business?