The value of online reviews is clear. Research indicates that as many as 97% of consumers consult online reviews before making a purchasing decision. That seems like a very high number for something you have no control over. Is there a way to determine how much each review is worth to your business? How much each bad one can impact your bottom line?
Begin by monitoring your reputation
Many hotels and restaurants don’t even look at their reviews. The ones that do may not know how to leverage that information.
Understand the impact
Even where a review doesn’t lead directly to a visit, reviews can increase your online visibility making your business easier to find.
According to a Nielsen survey:
- 82% of consumers visit Yelp before making a purchase
- 84% listed Google as their second choice, followed by Yahoo and Facebook
- 89% of these consumers make a purchase within a week of visiting review sites
According to a study from Harvard Business School, increasing your overall Yelp rating by one star can lead to a 5-9% boost in revenue.
How much could that mean for your business?
Harvard further noted that in communities where Yelp reviews are prevalent, revenues at chain restaurants decline, leveling the playing field a little for local establishments.
Can you use this information to calculate the real impact on your business?
- Good reviews can give you a reason to raise your prices if demand is increased. A Cornell University study found that a hotel can raise its prices by about 11 percent for every one-point increase in its star rating. Consumers are likely to spend 31% more on a business with excellent reviews.
- Negative interviews can show you where you’re losing business and give you the opportunity to rectify it. Don’t obsess over a couple of negative reviews that appear to be outliers. Consumers are less likely to trust businesses that have all five-star reviews.
- Competitor reviews can help you determine what other restaurants are doing well and what they are not and can prevent you from making the same mistakes.
By paying close attention to your reviews and spikes and dips in business volume, you can calculate the impact reviews have on your revenue and what each online review is worth.
Partner with an industry expert
The experts at Horizon Hospitality can help you recruit restaurant and hotel managers and executives with the skills and experience to boost your reputation in the industry. If you are ready to hire professionals who can make a significant impact on your business, contact our hotel and restaurant recruiters today.