Never underestimate what your customers think about your business in today’s world. The importance of customer reviews cannot be overemphasised. It’s a multi-faceted asset that influences many aspects of a business. When managed properly, it can be a tool to promote brand awareness, create a better product-to-market fit, and adapt to a changing business environment. But if managed poorly, your customer reviews could be your undoing, regardless of the quality of your product or service.
In this dossier, we let the stats speak for themselves. Here’s a rundown of some key customer review stats in 5 key industries.
Interesting General Stats
First, some general facts about customer reviews you should know. 92% of customers make their purchase decisions based on customer reviews. 80% of customers who check out business reviews on Yelp are happy to recommend a good business to others.
The increasing availability of online reviews is inspiring more confidence in everyday consumers. According to Edelman, customer trust in consumer services has been increasing steadily year on year, currently sitting at about 70%. Customers are now feeling more confident when making purchase decisions thanks to online reviews, whether they’re looking for a HVAC technician, mould removalist, car mechanic, packing and moving services, etc. A Statistia report shows 62% of online users study reviews before choosing a consumer service.
An unresolved negative review can turn off 94% of your prospects. But proper customer engagement can turn them back on. When you respond to a bad review, you’re 33% more likely to convince a customer to come back and upgrade their 1- or 2-star rating. 67% of customers can be swayed by ‘Good customer service interactions’.
And it’s always worth trying to change a customer’s mind about a bad review. Businesses with between 3.5 – 4.5 stars earn more revenue than those with lower ratings. What’s worse, 56% of customers say they’d go out of their way to tell people to stay away from a business that they’ve had a bad experience with.
The review platform also matters. 76% of reviews are either on Google or Facebook. 97% of Yelp visitors make a purchase after looking up reviews on the site. 40% of digital consumers research new businesses on social networks.
Hospitality is one of the most sentimental industries, and customer here often takes things very personally and emotionally. Nearly 1 out of 3 customers choose a restaurant based on online reviews. The figures are even bigger in some places. 90% of U.S consumers on Tripadvisor make their dining decisions based on Tripadvisor rankings.
81% of travellers frequently read reviews to make their booking decisions. 52% of TripAdvisor users say they’d never sleep in a hotel that has no reviews. 79% of Tripadvisor visitors use ratings to choose between two or more close-matching hotels. Travellers are willing to pay more for a hotel with a better rating.
The source of the review also matters a lot when it comes to hotels and restaurants. 94% of US customers say Tripadvisor is the best place to get the most trustworthy, informative reviews of hotels and restaurants. Google, Facebook, and Yelp are close runners-up.
However, 31% of travellers lookup search engines for reviews when researching their destination, and 21% when researching their accommodation.
Emotions also run high in the financial industry since a lot is usually at stake. Customers want to know they can trust a business to take care of their personal finances, business finances, investments, insurance, and other critical aspects of their finances.
Good customer reviews are critical to your capacity to attract and retain customers. According to Edelman, the financial industry is the second least transparent among 15 sectors. Customers are less likely to perceive banks as being ‘customer-driven’ today compared to a decade ago. According to J.D. Power, one of the major problems with banks today is the continuous decline in overall levels of customer satisfaction, especially relating to customer care and dispute resolution.
But while trust levels are still far lower compared to a decade ago, things have been looking up over the past few years, with the internet compelling institutions to become more transparent. Between 2015 and 2019, trust in financial services increased by 8%.
When it comes to insurance, 61.2% of customers say reviews play an important role in choosing an insurance company. However, nearly 90% of insurance companies have less than 3 reviews. Over 90% of insurance companies can go for over a year without keeping in touch with their customers.
But in reality, the importance of customer engagement grows by the day. For the home and auto insurance subsectors, a 1% increase in customer satisfaction translates to an additional $215 million in total revenue, according to Forrester. On the other hand, a 1-point decline in the Customer Satisfaction Index of multichannel banks means a $124 million loss in revenue.
Banks with top rankings on Kanta’s customer experience index are nearly 2 times more likely to be recommended by customers to others. What’s more, 8 in 10 customers will happily switch to a new financial service for a better experience.
More patients are also coming to appreciate the importance of online reviews. More than 1 in 2 patients rely on online reviews when selecting a doctor, dentist, and other healthcare professionals. 72% of consumers begin their search for healthcare providers with online reviews. 83% trust online reviews more than personal recommendations. 68% are guided by online reviews when shopping for healthcare plans.
Just as they think it’s important to look up reviews, many customers also make it a point to leave reviews for other potential customers. 44% of patients deliberately leave reviews after each visit to a care provider. 94% will happily fill out a 10-question survey, and about 73% prefer to give reviews within a few days. 41% of those who write reviews do so on multiple sites.
Over 60% of patients will avoid a doctor with negative reviews. Some 84% expect a bad care experience to be followed up closely. But nearly one out of two patients says their negative feedback did not receive a response. However, nearly 2 out of 5 customers will overlook a bad review that has received proper attention. 80% of patients will happily switch to a service that provides a better experience, and nearly one out of two would go outside their insurance network to find a provider with better reviews.
And as with reviews in other industries, the source of the reviews determines their authenticity. 88% of patients under 40 say their choice of a medical provider relies heavily on a provider’s online presence. 90% of patients believe a poor digital experience is enough reason to leave a provider.
Google reviews are the primary source for about 1 in 2 customers. Other popular sites include Healthgrades, RateMDs, and Yelp. However, about 27% of patients prefer to see a provider’s ratings and reviews on a medically-specific website.
Providers themselves are not oblivious to all of this. Over 80% of providers reckon that their online reputation is extremely important, though most don’t know how to change it effectively. 45.5% of providers proactively solicit reviews. Just 10 minutes of “cultivating your online presence and addressing feedback publicly” every week can reduce the impact of negative reviews by 70%.