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Why negative reviews can be good for business
Source: takingthoughtscaptive.net

Why negative reviews can be good for business


In my Q & A this week with Robert Tolliday – General Manager, True Local we discuss why negative reviews can be good for business.  Areas covered include: what customers think of online reviews – positive and negative, how to encourage customers to leave a review and how best to respond after receiving a negative review.

True Local is an online directory and review website used by millions of Australian businesses. It attracts an average of 3.5 million users every month reviewing everything from restaurants to hair salons, tradies to accountants.

Q1: Recent research conducted by True Local has revealed that 3 in 5 (59%) review site users are more likely to visit a local business if they have online reviews.

In addition, nearly 9 in 10 (87%) review sites users deem it necessary for a business to have at least one review before they would consider them reliable/trustworthy – on average it takes approx 10 reviews before an Australian reviewer believes the business to reliable/trustworthy.

What differences were there if any, by age, gender or region?

The biggest variations existed between the age groups. Out of any other age demographic, 67% of Gen Ys are more likely to visit a local business if they have online reviews. We also found that 31% of women are more likely to consider a business trustworthy if they have 1-4 online reviews while only 21% of men tend to agree.

When it comes to increased activity across online review websites, again, Gen Y are leading the charge with 36% increasing their usage of online review sites. Whilst, Gen Ys’ are currently more engaged with online review websites, we can see that there is a growing interest across the board with an increase of usage by 28% of Gen Xs’ and 24% of Baby Boomers.

In terms of region, the True Local research found that people in capital cities are more likely to use online review sites more frequently than the rest of Australia. And those in capital cities are more likely to follow through and leave a review on the day they use a business or service.

Q2: Which type of businesses tend to attract more online reviews.  Do businesses such as plumbers and electricians receive less reviews compared to hotels or restaurants? 

Tradies such as plumbers and electricians do garner a high number of reviews on the site – this is because the customer-tradie experience is much more personal and usually one-to-one. However, if a business provides a great service and positive experience for customers, they are more likely to leave a review of their experience to assist others and help to inform future decisions.

Why negative reviews can be good for business

Q3: The research also indicated that 4 in 5 (82%) of respondents said they felt motivated to leave an online review after a positive experience – most commonly to thank and/or congratulate the service provider for their excellent service (46%). What can businesses do to encourage customers to give an online review? 

There are ways of incentivising feedback that will encourage customer reviews despite what kind of small business you manage. Depending on what marketing or communication channels a business has access to; True Local recommends small businesses to consider the following:

Great service – across the board, the easiest way to generate quality reviews are always to consistently provide excellent service.

Businesses can create a service questionnaire for themselves; does your business provide a service that rivals or beats competitors? Is your customer service second to none? By being the best at what you do, your customers are more likely to leave you positive reviews.

Just ask. At the end of a transaction, mention you’d really appreciate a review of your service if the customer has the time because you really do value their feedback but, don’t push it.

Be thankful – Once a customer has left a review, businesses should remember to respond to each review. If a reviewer sees their effort is appreciated, they might feel even better about your business, and help to spread the word and encourage others to leave a review.

Getting social – Social media can be an excellent place to get more reviews. People trust the reviews of their friends and contacts on social media e.g. post a link to your listing, and you can also link to a few great reviews too.

Q4: What % felt motivated to leave an online review after a negative experience? 

Interestingly, our research has shown that people are more likely to leave a positive review than a negative one.

We found 82% of people are leaving positive reviews after a great customer experience while just 61% saying they would leave a negative review after a bad experience.

Out of the different reasons one might leave a negative review, the majority (49%) of people would do so in order to warn others of an unreliable product or service. Only 14% said they would leave a bad review in retaliation for bad service.

Q5: How should small businesses respond to negative reviews? Should they respond to all of them?

For small businesses, a negative review online can be unsettling.

While there’s no doubt that having positive reviews will help to attract new customers, our research revealed that two-thirds of Australians question the credibility of a business with only positive reviews.

So in fact, a negative review isn’t necessarily a bad thing. It can provide businesses with an opportunity to develop the business model through feedback, and impress new customers.

True Local research found that 9 in 10 (93%) Australians said they feel more positively about a business that has responded to negative reviews in an attempt to resolve the problem.

So, we advise businesses to respond to all negative reviews in a way that reflects favourably on the business and business owners.

For instance, if a business receives a negative review, True Local recommends addressing it as soon as possible. By responding promptly, a small business can demonstrate its commitment to providing the best possible customer service.

There are few things to note; as responses are visible to both existing and potential customers, it’s important always to be conscious of your approach when replying to feedback.

Businesses should try to remain polite and professional at all times, and outwardly show they understand the customer’s point of view. After all, a customer has taken the time to share feedback in the hope it will help to improve a business offering or overall experience for other customers in the future.

True Local recommends the following review response steps.

  1. An Introduction by providing a name and business title, this shows customers that real people work there, making the process much more personalise and conversational.
  1. Thank them for using your business and their feedback.
  1. If it’s a negative review, apologise for the fact that their experience didn’t satisfy them.
  1. Outline what their concerns are and how your team will try to rectify the issue now and in the future.

Q5: A lot of small businesses feel they don’t have the time or skills and resources to manage their online reviews. How would you suggest they manage them?

Managing online reviews can be time-consuming for a small team; however, the benefits of interacting with your community online can have incredible results.

There’s a lot of content on the Internet to guide you in best practice for interacting with your customers online. At True Local, we are constantly sharing new tips and how-to guides that can help businesses to enhance their online presence and get the most from customer reviews.

For more information on how to make reviews work for your business, you can go to http://www.truelocal.com.au/blog/make-reviews-work-for-your-business/.

At True Local, we believe reviews can have a great impact on a business for a number of reasons, such as:

  • Reaching new audiences: As a small business, online reputation can have a direct impact on success and ability to gain more customers. With the changing digital landscape, online reviews have become a digitally enhanced version of word of mouth. Recent research, conducted by True Local, shows that over two in five (42%) Australians are reading reviews regularly (1-3 times a week). Meaning, small businesses overall ratings, the number of reviews, reactions and responses online can directly influence and attract new customers.
  • Online reputation: With three in five (59%) of review site users more likely to visit a local business if they have online reviews, small businesses can profit from building an online presence and implementing marketing key strategies to make a lasting impression online, with new and existing customers.
  • Service of Excellence: With the usage of review sites increasing, there is a real opportunity for businesses to listen and learn from a customer experience. Reviews enable small businesses to take advantage of what is essentially free research that can challenge and enhance its service. Customers also provide valuable insights and information, including what you’re doing well, suggestions, tips, questions or problems you can quickly solve. If businesses can constructively and efficiently apply feedback to improve services, both the rate of customer retention and new clients are likely to increase.
  • Engaging with customers: Reviews give businesses an excellent opportunity to engage in a two-way dialogue with customers via review websites, which can build trust and generate positive word of mouth.
  • Online search: Reviews can help businesses to get more visibility online, and can even improve search engine optimisation by building more search links to a website.



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