Why You Need to Reply to Online Customer Reviews

Ignoring online reviews can be a big mistake.

A 2019 report from the customer insight firm, Womply, revealed small businesses that reply to at least 25 percent of its customer reviews earn 35 percent more revenue than their peers.

This is a huge number that's hard to ignore.

Womply's researchers analyzed data from more than 200,000 small businesses across multiple industries and discovered some interesting conclusions. 

• A 4.5 star rating is better than a 5 star rating.

• Just 19 percent of reviews are negative.

• Businesses with at least 9 recent reviews earn 52% more revenue.

You can read the entire report here.

Let's take a closer look at why responding to reviews drives revenue growth and how you can do it gracefully, even when the reviewer is angry, mean, or unfair.

How responding to reviews increases revenue

There are two ways responding publicly to reviews can grow your business. 

1. Improve your search rankings

2. Send a positive signal to potential customers.

Improve your search rankings

Online review sites are also search engines. People actively look for businesses like yours on Google, Yelp, Facebook, OpenTable, TripAdvisor, and others. Most offer free listings for businesses. 

Womply's research found that just claiming your free Google listing can grow your revenue by 10 percent!

My own analysis confirms that Google is the most important listing site for a small business because it's the search engine customers use most often, even when they aren't specifically looking for reviews.

Here's the kicker.

Google is pretty clear that responding to reviews will improve your search ranking. One analyst estimates that actively responding to customer reviews accounts for 15 percent of Google's SEO algorithm for local businesses.

Let's say I'm in Austin, Texas and I want to find a coffee shop. 

Notice how Google serves up a map at the top of the search results along with three businesses that have high ratings:

Imagine how many more customers would find your business if you could get it on that map!

The Hideout Coffee House and Caffe Medici both have over 200 reviews, but the Capital One Cafe has just 32. So how did the Capital One Cafe get one the list?

One explanation is a high response rate to recent reviews, which helps it get ranked higher in the results.

You may notice that Capital One Cafe is part of a major corporation, Capital One. It’s actually unusual for a large corporation to respond to online reviews like this. Most haven’t caught on yet.

So ask yourself this question: Can you do a better job of responding to customer reviews than Capital One can?

Of course!

Send a positive signal to potential customers

Womply's research revealed that businesses with a 4 to 4.5 star rating earn 28 percent more revenue than average. That's even better than businesses with a perfect 5 star rating!

Why is 4.5 better than 5?!

The answer is trust. Many customers seek out negative reviews. They want to know what people complain about to see if there's a consistent trend or just a few grouches. When a business has a lot of reviews, but no complaints, something seems fishy.

Here's where responding to a review can really help.

The response isn't necessarily for the customer who writes the negative review. It's for all the other customers who read the negative review and your response. Research shows that customers are more likely to be empathetic to you and your business if your response to a negative review is polite and professional.

And you might even change a customer's mind. Here's a powerful example:

Image credit: Womply

How to respond to an online review

It's always important to be polite and professional when responding to an online review. The specific way you respond depends on the type of review you receive. There are three general types:

1. Happy customers

2. Neutral customers

3. Unhappy customers

I'm going to use one of my favorite companies, Ideal Plumbing, Heating, Air, and Electrical, to show you how a small business can effectively respond to different types of online reviews.

First, we'll look at a review from a happy customer. Ideal does a great job of acknowledging the customer and thanking them for their review.

There’s a few things to notice about the review:

• The response thanked the customer.

• It acknowledged the customer’s feedback.

• The reply was sent quickly.

The next type of review is from a neutral customer. This particular customer gave three stars, acknowledging Ideal's excellent work while complaining about the prices. 

Notice the friendly and helpful response.

• It sincerely thanked the customer for their review.

• The response called the customer by name to make it more personal.

• The reply politely offered an explanation for Ideal’s pricing, without getting defensive.

Keep in mind customers aren't reading these reviews in isolation. You'll notice the review right below it commends Ideal on sticking to the budget. So a potential customer might think that Jeffrey is a lot more price-sensitive than other customers like John who value fast service and high quality work.

The final review is from an unhappy customer. Some unhappy customers may have a legitimate gripe, while others appear to be unreasonable. And yes, a few even lie.

The review below is from a someone who didn’t even use Ideal’s services!

This person was upset about Ideal's charges for emergency air conditioning service on a very hot Saturday. Ideal's response is still positive, friendly, and helpful to other customers who might be reading the review:

There are a few things I really like about this response:

• It comes directly from the owner, Don Teemsma.

• Don adds important context that would be helpful to other customers, without getting defensive.

• He politely explains the fees while acknowledging the customer’s urgency.

Will this response change the angry customer’s mind?

Probably not. But that’s not really the point. Don’s polite and measured response likely assures other customers reading the review that Ideal is an honest business that takes good care of its customers.

I have personal experience with this situation.

Last year, I woke up on a Saturday morning to find my own air conditioner had stopped working. It was going to be one of the hottest days of the year, and I was truly worried about the heat.

I called Ideal first thing in on a Saturday morning to schedule the repair, knowing full well that Ideal was going to get a lot of calls just like mine that day. Fortunately, Ideal is very responsive. Phil, one of Ideal’s friendly and capable HVAC technicians, came out to my house and got my system working again before noon!

That type of service was definitely worth a premium!

Online Review Resources

There are a number of resources that can help you leverage online reviews to grow your business. Womply's report is a good place to start.

You can also watch a webinar with Jess Greene-Pierson, Womply's Director of Go To Market, where we talk in-depth about using online reviews to grow revenue.

Want to really dive in? You can take my LinkedIn Learning course, Serving Customers Using Social Media. There are three ways to watch the video:

• Use your LinkedIn Learning subscription to watch it for free.

• Access the course at no charge with a 30-day LinkedIn Learning trial.

• Purchase the individual course.

Here's a short preview.

Welcome from Serving Customers Using Social Media by Jeff Toister

Insider Perspectives: Ideal's Don Teemsma on Field Service

Don Teemsma, President of Ideal Plumbing, Heating, Air, & Electrical

Every home owner needs a few go-to service providers.

One of mine is Ideal Plumbing, Heating, Air, & Electrical. This company is my first and only phone call anytime I need a plumber, HVAC technician, or electrician. 

Ideal has remodeled two bathrooms in my house, installed a new heating and air conditioning system, installed a new hot water heater, fixed a slab leak, installed a new electrical panel, and made numerous smaller repairs over the years.

Yes, I'm a huge fan.

The work is first-rate, the prices are reasonable, and Ideal's technicians are consistently friendly, helpful, and reliable. The company consistently earns top customer service honors from companies such as Houzz and Angie's List.

If you live in San Diego, you should have this company on speed-dial!

There's one aspect of Ideal's service that particularly fascinates me. How does the company get its field service technicians to consistently arrive on time, do great work, and provide great service?

I sat down with Don Teemsma, Ideal's President and Owner, to ask him how his company sustains a customer-focused culture with its field service technicians.

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Q: Ideal offers two-hour appointment windows and your technicians are always on-time or even early. How do you manage this while other service companies struggle to maintain a four-hour appointment window?

"We've tried four-hour appointment windows, but people really don't like that, so we've made a commitment to stick with a two-hour window.

"It starts with our dispatch team. We keep track of all our appointments and technicians via computer and a dispatch board. It's the service manager's job to make sure we're on schedule.

"We're constantly moving the board around to make sure we can fulfill that two-hour commitment. If we see a service call is taking longer than expected, the service manager can proactively call the next customer to let them know there will be a delay or find another qualified technician to move the call to.

"Our service area is also an important factor. We really try to keep our service area tight and not overcommit. That's why we generally don't serve cities in [San Diego's] North County like San Marcos or Escondido. There are too many unknowns like traffic conditions that would make it difficult to keep our appointments and provide a rapid response.

"Maintaining the right parts and supplies on our trucks is also important. We try to keep our trucks fully-stocked so they can handle 80 percent of service calls with the parts on the truck."

Q: There's a stereotype of a typical repair technician who is pushy and will try to suggest a lot of expensive repairs. How does Ideal avoid that?

"A lot of field service technicians work on commission. This pay structure means it's in their best interest to try to sell additional repairs and services to their customers.

"We don't want to create that incentive because our business is built on relationships. We'd rather earn a customer's repeat business or get new business through referrals from customers who trust us.

"Our technicians don't work on commission. They tend to prefer it that way. They're in this business because they like to fix stuff and make people happy.

"Many of our technicians will refer to a customer as 'my customer,' because they take a lot of ownership and personal pride in helping the people they serve."

Q: What else do you do to ensure your technicians are customer-focused?

"It starts with hiring the right people. 

"We look for integrity in our hiring process. If we don't feel someone has an innate honesty about them, we won't hire them.

"Our interview process includes a few assessments but we also put candidates through three interviews to see if they will fit our culture. For example, one of the things I ask candidates about is whether they perform any service in their community. Are they involved in their church or do they volunteer for a nonprofit organization? People who give back to their community in some way are more likely to be successful in our culture.

"One of the things we do around here is encourage people to constantly improve. If you're not the best at a particular skill, keep working on getting better. Our culture is not to be perfect, but to perfect.

"We really strive to inspire technical excellence. Having good skills allows you to perform better work, get jobs done faster, and solve challenging problems. 

"Over the years we've hired a lot of technicians with good skills who have been nurtured by their coworkers until they've gotten really good at their trade.

"We also have an Ideal Mascot: Mr. Bill. He truly embodies our culture and is a great ambassador for showing care towards our customers."

[Editor's note: Bill has worked the front counter in Ideal's showroom for over 17 years and is a wizard at locating hard-to-find parts. His friendly and helpful service was one of the reasons I personally became an Ideal customer. He helped me track down a part for a leaking toilet tank that I couldn't find at any of the big-box hardware stores.]

Q: Ideal's managed to maintain a reputation for outstanding service for many years. How do you keep everyone continuously focused?

"We talk about service a lot. We have company-wide meetings four to six times per year. All of our technicians attend a smaller meeting every other week where we talk about customer service, share customer feedback, and discuss opportunities to improve.

"We're also fortunate that most of our customers are repeat customers or they came to us because they were referred by a customer. These customers tend to be understanding that things can and will go wrong occasionally because we've had a great relationship with them and they trust us to do a good job.

"Many of our technicians have worked here for a long time. They like working for a company with a great reputation and they like the culture, so they work hard to help us continuously deliver great service."

The 3 Ways to Wow in 3 Quick Stories

I know of only three ways to create an outstanding customer service experience. 

• Build Relationships
• Exceed Expectations
• Solve Problems

Here is a quick example of each one.

Build Relationships
I'm not the least bit handy, so when the spice rack in my kitchen got stuck and wouldn't open, I knew it would be futile to try to fix it myself. My first instinct was to call Don Teemsma at Ideal Plumbing, Heating, Air & Electrical. I knew that Ideal also remodels kitchens and bathrooms (they remodelled two of our bathrooms), so I figured he'd know someone who was a cabinet expert. Don was confident that one of his employees, Joe, could handle it. An hour later, Joe was at my house and not long after that the spice rack was unstuck and as good as new.

Without knowing someone like Don, I realize I would have to spend time blindly searching for someone to do the repair, schedule an appointment for the obligatory four hour window, and then hope everything turned out okay. Don helps customers like me avoid these hassles by making sure help is just a phone call away.

Go the Extra Mile
I overheard an interesting exchange while my wife, Sally, and I were enjoying a wonderful meal at Fleming's Steakhouse last Saturday. A guest at a nearby table asked his server if there was an ATM nearby because he didn't have any cash to tip the valet parking attendant. They server pointed out an ATM machine about a block away, but then suggested the guest simply add the valet's tip to his dinner bill. The server explained he'd be happy to take care of the valet's tip for the guest so he wouldn't have to worry about tracking down the ATM machine.

Simple gestures like this that save a customer some time and money (ATM fees - yikes!) make a lasting impression. It didn't require a lot of extra effort from the server, but taking the initiative to be extra helpful made a wonderful impression on the guest. And, since I'm writing about someone else receiving great service, this simple gesture clearly had a ripple effect.

Solve Problems
I made an appointment for my dog, Melrose, to spend a day last week at Furry Tales Doggy Day Care. The dogs have a lot of fun playing with each other in their open environment and Melrose always comes home tired after a great day. As I made the appointment, I learned they didn't have a record of Melrose's latest vaccinations, even though I had given them copies several months earlier. Melissa, the friendly employee taking the reservation, told me she would contact Melrose's vetenarian and have his office fax over her records so I wouldn't have to worry about giving them another copy.

Problems can and will occur. The speed and manner in which they get resolved is ultimately the difference between outstanding and poor service. Tracking down my dog's vaccination records might be been a hassle, but Melissa found a way to solve the problem without requiring any extra effort from me.

3 Ways to Wow
I mentioned I only know of three ways to deliver outstanding service. Is there another path I neglected? Please feel free to leave a comment and enlighten me or simply leave your own tale of outstanding service.