Staying one step ahead of competitors is the goal of every business and doing so can increase market share, improve brand reputation, strengthen customer loyalty and retention rates, and ultimately boost revenue.
There are hundreds of ways to overtake and stay ahead of your competitors, with opportunities hidden across your business at every customer touchpoint and within every internal department. In this article, we focus on an often-overlooked source of competitive advantage – your customer reviews.
What are customer reviews?
Customer reviews are the pieces of feedback left by your customers about your business. This can include your products or services, customer service and support, delivery, website, operations and processes, and any other element of your business that they might come into contact with. Don't assume that customer reviews are just for the big-ticket experiences, like how your product performs or how good your returns process is. Any interactions that your customers have, however small, can lead to a positive or negative review.
Why are customer reviews important?
Customer reviews are crucial to understanding the individual experiences of your customers, and whether these experiences translate into trends or common themes that are impacting your business at a higher level.
It's easy to get lost in your strategic plans, day-to-day company operations, and key business metrics. Keeping a line of communication open with your customers, through which they can share their honest feedback with you, can sometimes fall by the wayside when things get hectic. However, it's more important than ever to not only keep this feedback loop running, but use it to your advantage as a business. After all, customer reviews serve as a portal into the minds of your customers, and what can be more important than understanding the needs, concerns, frustrations, and joys of your customers?
What are the different types of customer reviews?
There are two key types of customer reviews.
The first is the organic, in-the-moment reviews that people leave when they are extremely happy – or extremely angry and frustrated! If you collect reviews on your website, you might find this kind of review there. You can also find these sorts of reviews on your social media channels and on some third-party review websites like TripAdvisor, Trustpilot or Influenster. These reviews tend to be 'open' reviews, which mean that they don't require any verification that they are genuine or from real customers.
The second type is 'invite-only' reviews. They are more likely to be verified, as only those who have had a genuine interaction with your business are invited to leave feedback. This means anyone that reads the feedback can be sure it's 100% authentic. They are also a lot easier to manage from a customer service and business perspective, because you can quickly locate the reviewer in your customer relationship management (CRM) system and see their history with your company if any action is required.
15 customer review statistics to give you a competitive advantage
We’ve talked about some of the benefits of reviews, but let’s take a look at the numbers. Understanding the effect that customer reviews can have on your business will give you a significant edge over your biggest competitors.
- 93% of customers read reviews of local businesses to determine their quality (BrightLocal)
- A five-star rated product is 270% more likely to be purchased (Spiegel)
- After reading a positive review about a local business, 54% of consumers will visit their website (BrightLocal)
- Responding to just one customer review can earn a business 4% more revenue on average (G2)
- You need to respond to at least 30% of your reviews if you want to out-do your competitors (Uberall)
- 92% of B2B buyers are more likely to purchase after reading a trusted review (G2)
- Companies who email their customers with a direct link to submit feedback can expect their average star rating to increase (Spiegel)
- 37% of Gen Zs either abandon a purchase or post a negative review due to a poor digital shopping experience (Sitecore)
- Consumers are watching how you respond to your customer reviews, with 89% reading how businesses reply to their feedback (BrightLocal)
- 47% of consumers believe that businesses should always respond to negative reviews (Feefo)
- 46% of adults admit they never purchase anything online without reading reviews first (Checkatrade)
- 79% of people say that they trust online reviews as much as they trust a recommendation from their friends and family (BrightLocal)
- People read an average of 10 online reviews before trusting a business (BrightLocal)
- 92% of consumers hesitate to make a purchase if there are no customer reviews (Fan and Fuel)
- 20% of consumers expect to receive a response within one day when they write a review (BrightLocal)
Getting started with customer reviews
It's clear from the statistics above that customer reviews can have a tangible effect on your business performance. In the simplest terms, more positive reviews and a better response to customer feedback can equal increased customer acquisition and loyalty. As you prepare to start collecting customer reviews, go back to the very beginning of your customer's experience with your company. By providing fantastic service and high-quality products, you're already on the right track to earning positive reviews.
Here are some of the easiest ways to make sure you're organically generating great reviews from happy customers.
Start a dialogue with your customers
Your customers spend their time researching your business, using your website, interacting on social media, engaging with your content, and finally, committing to exchange their hard-earned money for your products or services. They will have opinions and valuable feedback to share at every point of that journey, and by talking to them at each stage, not just after they become a customer and you have their money, you will build strong relationships that make them feel valued and listened to. Customers who feel heard and are included in the evolution of your company as it grows are more likely to give you fantastic reviews and feedback!
Make your customers feel special
There are plenty of ways to let your customers know how much you appreciate their decision to use your company instead of a competitor. Not only will these special touches help to create happy, loyal customers, they can also translate into positive reviews. Think about the end-to-end experience your customers have with your business and identify areas where you can go the extra mile to wow them. Some examples include:
- Use high-quality, branded product packaging that is personalised or designed to raise a smile.
- Create a no-quibble refund policy for unhappy customers.
- Optimise your returns process to make it as smooth as possible for your customers.
- Create offers and experiences for your customers that are personalised at an individual level, such as giving someone a discount on their birthday or on their first ‘purchase anniversary’ with your company.
- Involve your customers in your product and service ideas by asking for their input on new lines or upcoming changes.
- Create special touches for customers who have an anniversary or special occasion coming up.
- Assign a named case owner to complaints and optimise the process so unhappy customers can have a main point of contact who keeps the line of communication open and responds quickly.
These are just a few ways that businesses can create a small moment of happiness for their customers, which can lead to a big impact in terms of positive customer reviews.
You can then supplement your organic positive reviews by reaching out to your customers and requesting their reviews and feedback. This can be by email, over the phone, or even face to face. There are lots of platforms and tools on the market that are designed to help businesses collect and analyse customer feedback.
It's all too easy to treat collecting and responding to customer reviews as a tick-box exercise and forget to measure their impact on your business. In theory, the more great reviews you get, the more improvement you'll see in key metrics. We recommend the following metrics as key performance indicators. Be sure to find out how you stack up against each of these metrics before you start work on improving your customer review processes; this will ensure you have some benchmarks to measure your progress and performance against.
Customer acquisition cost
Your customer acquisition cost (CAC) is how much you spend across your whole business on acquiring customers, divided by the number of customers you acquire. If you spend £10,000 and generate 5,000 new customers, your customer acquisition cost is £2. As you start to generate more positive reviews and increase your response rate to negative ones, you should find that more and more people are attracted to your business and it becomes easier to convert prospects into customers. This higher conversion rate will translate into a lower customer acquisition cost.
Customer churn rate
Your customer churn rate is the rate at which customers stop using your company's product or service (within a certain time frame). Collecting customer reviews is a great way of highlighting trends or themes that are causing your customers frustration, disappointment or even anger. Not only will collecting these reviews give you the chance to fix each individual's grievance so you have the opportunity to retain their business, it will also help you to fix the bigger issues that are driving your customers away.
Net Promoter Score® (NPS)
Brands around the world use Net Promoter Score to measure loyalty by asking their customers how likely are to recommend their business to their friends and family. As you invest time and resources into collecting and managing customer reviews, you should see an improvement in your NPS score. This is because your customers will see and appreciate your commitment to speaking to them, listening to their feedback, solving their problems, and using their input to make your business better.
The customer review statistics included in this article speak for themselves. Consumers expect brands to have plenty of customer reviews for their products or service, with timely responses visible. Businesses that fail to meet this expectation risk losing potential or existing customers or creating animosity towards customers who do leave a review but never hear back.
Smart businesses will take these statistics on board and use them to implement a sophisticated customer review collection process. This should aim to drive genuine reviews from certified customers, with a team in place to actively respond to and manage the reviews that are collected. Review data should be analysed for trends relating to frustrated or unhappy reviews, and action plans to improve these issues should be introduced. By doing this, you are removing any catalysts for common negative reviews and improving your customers' experience.
Likewise, analyse your positive reviews to learn more about what your company is doing well and what your customers love. Then, simply, do more of it! The greater experience you can give to your customers, which make them feel valued and understood, the more organic positive reviews your business will receive. Providing special and personalised moments for your customers won't just generate positive customer reviews – they might also create stories or posts that get seen by other consumers, increasing your brand visibility and reputation.
You don't have to worry about managing your customer review project alone – there are plenty of review platforms available on the market, which make it easy to collect and manage customer feedback. These platforms can help you to scale your review collection efforts and analyse the feedback you receive.
Before embarking on any new customer review collection project, don't forget to benchmark your current performance against key metrics such as your customer acquisition cost, customer churn rate, and NPS score. Knowing your starting points for each of these KPIs and tracking their progress as you turn your attention to your customer reviews is vital to understanding whether your hard work and financial commitment are paying off. Check in on these metrics on a monthly basis, or even more regularly, and watch as your increased number of reviews and improved response times leads to improved performance across the board!