Have you ever searched online for a product or service and gone ahead with the first local business result that you saw? Probably not.

It’s natural to want to know if the business is legitimate and if they provide quality products or services. So where do we turn to find that? The answer is simple, we use trusted online review platforms like Google, Facebook, Yelp and Foursquare, where customers typically leave star ratings and reviews.

A study was conducted by Womply which examined more than 200k businesses across a range of industries. What makes this study different from others is local business transaction data.

The study found that:

  • Businesses that claim their listings on at least 4 (main) platforms earn 18% more revenue.
  • Businesses that reply to their reviews earn about 35% more revenue.
  • Businesses with 3.5-4.5 star ratings earn more than businesses with higher and lower star ratings.
  • Businesses with more reviews (than average) earn 54% more revenue.
  • Businesses with 15-20% negative reviews earn 13% more revenue than businesses who only 5-10% negative reviews.

You may think that businesses with a 5 star rating would earn more than businesses with a 3.5 star rating, or that businesses with more negative reviews would earn less business than businesses with fewer negative reviews, but according to the study this is not the case, it seems that there is an optimal range for both of these scenarios.

Why Should You Care?

Having an online local presence has become crucial for any local business. 

If you have a local business and want to thrive, it’s extremely important to claim (and optimise) as many listings as you can, especially on all of the main review platforms.

While businesses can’t control the star ratings and reviews customers leave, they can encourage customers to leave (honest) ratings and reviews

Businesses should also ensure that they reply to as many reviews as they can (where applicable), especially if the review is a negative one.

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