Post Covid-19, customers’ reliance on reviews to make a purchase decision has increased exponentially. An obvious reason is that the pandemic took practically everything digital. People simply shifted their spending from the real world to the virtual world, which meant a lot more people shifted to transact and purchase online.
Lockdowns resulted in a boom in e-commerce. Suddenly, popular e-commerce brands were facing supply-chain and logistics issues. Customers needed alternatives and hence, started looking at other lesser known and hitherto unknown companies. Their only way to assess the reliability of this hitherto unknown brand was customer reviews.
While prospective customers started assessing reviews, there was an interesting trend that showed up. Firstly, businesses that enjoyed a comfortable rating of 3.5+ were no longer customers’ choice. Via the virtual world, customers definitely started preferring businesses that had a 4+ rating. But that was not the only criterion. Customers started assessing star ratings with reviews. And they did not just read customer reviews subjectively, but looked at certain factors in a very logical order that influenced their purchase decision:
If even one or two of these above factors does not appeal to the prospective customer, the customer may move on to explore other businesses.
Let me explain this with an example. A customer searches for a salon near his preferred location that offers home services. He finds two well-rated businesses. Let’s name them Business A and Business B. Let us now assess these with the logic shared above:
|Assessment statement||Business A||Business B|
|Number of reviews||30||118|
|Recency of reviews||Two months ago||Three days ago|
|Frequency of reviews||An odd review once a month or lesser||Four to five reviews every week|
|Customer emotions||Mixed||More positive|
|Business’ interaction with customers||Response to only positive reviews||Resolution provided for negative reviews and pleasantries for positive reviews|
|Comparison of star ratings with the comments||Leaves doubts||Wins the customer’s confidence|
This tectonic shift on customer reliance on reviews to make purchase decisions also brought up some very interesting insights that can absolutely change the way businesses interact with their customers. Our partner Podium conducted a robust research in Australia and identified the following changes in the way customers have been doing business in recent times. These findings ratify the way customers are engaging with businesses based on online reviews across economies that have a large smartphone user base. According to Podium’s research:
We all know that several small businesses suffered great economic losses since Covid-19 struck. It was however, wonderful to see many customers show their magnanimity by patronizing many of these small local businesses. In fact, 39% of the respondents to Podium’s research said they have found a local business near their home that they did not know about or engage with before Covid.
Hence, if customers visited large format retailers and malls for their weekly groceries pre-pandemic, many of them shifted their purchases to nearby local supermarkets and smaller retailers to patronize them in a difficult time. Some even travelled a fairly long distance just to patronize a local business such as a salon or a restaurant during these difficult times solely based on customer reviews.
Hence, one of the primary factors that helped few local businesses get patronized more over their competitors was that they made it very easy for customers to leave reviews. These were businesses that either had a small QR code at the exit point of their shop or at checkout. They would request customers to scan and share their experience of doing business with them. Some businesses made it a lot more convenient by sending links to their customers via email or phone and asking them to share a review. And not surprisingly, a majority of the requests resulted in reviews. In fact, a few research studies that I looked at showed that at least 50% customers write a business review when asked provided the process is easy.
But the businesses that benefitted the most with more frequent and an increased number of customer reviews were the ones that sent an SMS to their customers requesting them to leave a Google Business Review for their latest interaction.
The power of customer reviews for small and medium local businesses
A clever thing that I have found certain local and small businesses do in recent times is leverage the power of customer reviews to identify their strengths and shortcomings. Their proactive asking for reviews by customers and their constant engagement with them has given them a wonderful outside-in perspective, which has helped them identify several customer purchase intents and change their inside-out strategies. Acknowledging their customers’ needs and providing them with tailored products and services has helped these organisations develop strong customer loyalty. This alone has helped them re-engage with detractors.
A hidden benefit that not many businesses know is that when a business increases the number of reviews by encouraging its customers via online review platforms such as Google’s business review solution and also responds to reviews both positive and negative, the brand’s online presence automatically begins to grow too, thus improving its SEO score. This translates into the business showing up more frequently during customer searches online not just as a suggested business, but also shows driving directions on Google Maps. Such comprehensive information about your business showing up organically just on the sheer power of your customers’ reviews becomes a strong and effective marketing tool.
Hence, if you want to increase your sales and gain an unfair advantage over competitors in your local market, you need to fully understand how your prospects find you and then make a decision to select you over your competitors. The secret is how effectively you manage your reviews and your online reputation, while simultaneously building your business offerings.
Article by Christopher Roberts
Managing Director, Engaged Strategy