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How Bad Reviews Can Be Good for Business

They say that there is no such thing as bad publicity, and according to a study from Northwestern University’s Spiegel Research Center, the same is true for online reviews.

Millions of customer experiences were analyzed from two online retailers, one that sells mostly lower-priced products and another that sells high-end products.

The study showed at retailers that display online reviews see conversion rates rise by as much as 270 percent, with higher-priced products and services benefitting even more.

Roughly 82% of shoppers actively look for negative reviews during the purchase cycle, and interacting with negative reviews (reading, responding, sharing, etc.) leads consumers to spend four times longer on websites and actually boosts conversion rates by 67%.

Negative reviews also help keep ratings realistic. What does this mean? Many consumers are hesitant to purchase a product with a perfect 5-star rating because the feel it is “too good to be true.” They are more likely to purchase the item with multiple reviews and an average of 4.7 out of 5. With that being said, the most impactful reviews were shown to be the 5-10 most recent ones.

Price will always be a major factor for shoppers when it comes to making the purchase decision, but online reviews are becoming almost equally as important. This is the timeless tale of quality vs. quantity, and with online purchases more popular than ever, people want dependable opinions to make a better informed decision.

Negative reviews also give businesses a great opportunity to help other customers decide if they are a good fit for the product or service. Let’s take the true-story example of a popular boutique beachfront hotel in Puerto Viejo de Limon. One of their guests left a scathing review on TripAdvisor complaining about the lack of television and A/C (both of which they were aware of before booking) and every other minute detail. Not only did the hotel have a witty response, but they posted a direct link to the review on their homepage with the warning: “Our hotel is not for everyone.” Why would they do this you might ask yourself? The answer is simple: to set realistic expectations for their future guests. It’s a genius move and a great way to make lemonade when handed lemons.

In closing, we’d like to offer a few tips for businesses on how to manage reviews: