Before the internet era, it was easy for a company to control how potential customers perceived them: spend lots of money on advertising and hope no prospective clients bump into someone that has had a bad experience with your company.
Today, things are much more complicated. The proliferation of tools like Google, Yelp, and Angie’s List gives all the power to customers to control how people perceive your company. All it takes is a bad day from your receptionist, or a sub-contractor cutting corners, to give a customer reason to paste a giant “1 star out of 5” beside your logo when people search for your business.
The impact of one-star reviews for restoration companies is so significant that it led us at KnowHow to conduct a unique deep dive into the reasons customers give one-star reviews. As a result, we analyzed over 1,000 bad reviews of restoration companies across the United States. What emerged was seven distinct reasons why customers complained about a restoration company (read about the Top 3 here), but our findings also provoked a bigger question:
Do 1-Star Reviews Actually Have a Measurable Impact on a Restoration Company?
Of course, they’re not great for the ego, and “brand consultants” hate them, but what is the true, dollars and cents cost of a one-star review? Is it worth stressing out about when you have a million other fires burning?
We decided to crunch the numbers and do our research, and we were shocked at the findings. It turns out that we weren’t overestimating the impact of a bad review - in fact, we were underestimating the colossal impact even a single bad review online can have on your bottom line.
Skeptical? So were we. Here’s what we discovered.
Losing Customers Before You Can Gain Them
Imagine you’re searching online for a service, whether that’s a plumber, lawyer, or hot tub installer. Thanks to Google’s layout, whenever a business pops up, right next to the “Contact Us” button is their reviews, with an average rating out of five. It turns out that number has an outsized impact on whether you’ll ever click that “Contact Us” button or not.
Studies show that 93% of consumers say reviews impact their purchasing decisions. In fact, nothing has a larger influence on a customer’s buying decision than their impression of a company’s online reviews – especially if they don’t have a lot of pre-existing knowledge of the industry. With over 91% of 18-34 year olds trusting online reviews as much as a personal recommendation from a family or friend, your reviews are hugely consequential.
To bring it to a tangible number, our research revealed that even a single negative review can drive away 22% of new prospective customers. If you’re an average restoration business that does $2M/year with an average project size of $15,000, that means one negative review could cost you 29 potential jobs/year. That’s $438,000 of lost potential revenue in a year because of a single bad review.
They Can’t Pay You if They Don’t Know You Exist
Furthermore, businesses with bad reviews are doubly punished because Google makes them harder to discover in the first place. SEO software Moz discovered that the quantity and quality of a company’s Google reviews was one of the top five influencing factors in determining where they would rank in a potential customer’s search engine results. Considering the average user doesn’t scroll past the first five search results, this is critical real estate. Additionally, Google pays attention to which websites customers click on when they search for a subject. If your business has a 3.8 star rating, and it’s right beside two businesses with a 4.8 star rating, which website is a potential customer more likely to click on? Over time, what started as a few angry customers online could snowball into an avalanche of lost opportunity without you even knowing about it.
So What Do You Do?
First things first, if you’ve been faced with a bad review and are tempted to take the easy road out, let me be clear: do not buy fake Google reviews. If Google detects that your positive reviews are inauthentic, it will pull down your business listing, making it nearly impossible for any new customers to discover you. Also, faking reviews is illegal, and the FTC will fine prosecutors $100,000 per fake review. If you’re seeking to improve your review score, it will have to be done the good old-fashioned way.
During our analysis of 1,000 bad online reviews, we learned that almost every problem is preventable: from communication breakdowns to bad customer service, constant project delays to customers complaining about price, there’s always a way out. The key is to standardize the performance of your best performers, taking their expertise and know-how and putting it in the hands of all your staff.
If you know you’re already delivering a 5-star experience, it’s just that your reviews online aren’t reflecting that, here’s the great news: surveys have shown that 77% of consumers polled agreed they’d be happy to leave a positive review if a business asked them to do so. Shockingly, in the same poll it was discovered that only 13% of all small businesses ask their customers for a review! This is a huge gap! If you’re walking away from most job sites with satisfied customers, you’ve got no excuse to not ask each one of them to go online and share their positive experience with the world.As we’ve seen, the consequences of bad reviews are too great to ignore, and too expensive to put on the back burner. For some businesses, this will require a re-examining of the processes and structures they have (or don’t have) that are leading to customers angrily taking to the internet to complain about a job poorly done. For others, it will require a concerted effort to capture happy customers’ experiences online. Yet, when done correctly, businesses can create a world where every new job that comes in not only brings immediate cash, but also creates a cycle of future business success as well.