How Reviews and Ratings are Driving Local Search

Searching for a business in a location used to feel like a completely straightforward task. No matter the engine you searched on, you were going to get what looked like an objectively determined list of options. Search result rankings were a competition of SEO acumen and required some due diligence on the part of the consumer in order to make an informed decision. But today, with reviews and ratings sitting shotgun next to location information, local search results across platforms and devices have a way of telling consumers not only which businesses are nearby, but which among them is the “best” option.

Even though subjectivity rules the ratings and reviews world, consumers rely on them. According to a 2012 BrightLocal survey of over 2,000 consumers in the U.S. and Canada, 79% of consumers trust online reviews as much as personal recommendations (up from about 67% in 2011). Similarly, a recently released Nielsen study of a much larger sample set — 29,000 consumers across 58 countries — found that about 70% of consumers trust online reviews. This growing trust has led major platforms like Yelp, Google and Facebook to make some big moves to increase the prominence and quantity of local business reviews.

According to a 2013 study by Digital Marketing Works (DMW), the single most important variable in the ranking of search results on Google’s Local Carousel is the quality and quantity of reviews. On Yelp, in addition to the recently added capability of writing and reviewing businesses on a mobile device, search results are displayed based on factors including, “review text, ratings and number of reviews.”  And over the last few weeks Facebook has added a “Review” button and five-star rating system prominently on Place Pages below the cover photo.

Despite the tremendous amount of press we have seen on fake reviews, ongoing interest in reviews by consumers and local search providers make it clear that these services aren’t going away. As platforms give reviews more importance and improve their ability to filter out fake ones — and government officials crack down on dishonest practices — consumer trust and use of reviews can only be expected to grow.  This trend will continue to increase the impact of reviews on local businesses. While everyone has always been a critic, review sites and search engines are giving reviewers a larger megaphone — and local businesses are seeing the effects.

Positive ratings and quantity of reviews may lead to better search rankings, which can help to drive business leads and increase revenue. According to a study by Harvard Business School, a one-star rating hike on Yelp can mean a 5-9% rise in restaurant revenue.  While ratings may increase revenue, having all positive reviews can actually work against a business. A Reevoo study of 2.5 million customer reviews found that 68% of consumers trust reviews on a business page more when they see both good and bad scores. This suggests there is no need to sound the alarm for every negative comment, and business owners should pick their battles wisely when it comes to responding.

There’s a lot of great advice out there on monitoring and responding to reviews from Google, Yelp and this article, so I won’t get into that here. The greater challenge faced by local businesses is figuring out how to generate more reviews.  According to a Street Fight poll of 1000 respondents in 2012, only about 20% said they would submit a review after a negative experience, and about the same amount said they would submit a review after a positive experience. Regardless of the experience, consumers are more likely to read reviews than they are to provide them, and business owners have a great opportunity to close that gap.

While Google, Facebook and Yelp are making it easier to provide reviews, local businesses need to make generating them from among their customers part of their overall marketing strategy if they want to compete in local search rankings. From verbally asking a customer after they make a purchase, to private messaging a follower that recently checked-in at their business on Facebook, there are many ways for a business to request a consumer review. The key here is that the business only make requests, not solicitations.

To that point, business requests shouldn’t be broadcast out on public-facing outlets, but rather privately to individual customers. The request serves as a way for a business to show they are concerned with customer service on an individual basis. Think of it like this: one business owner is shouting at all of the customers in their store to provide a review about their experience, while another owner is asking each customer personally for a review after the purchase. A personal request shortly after a transaction is going to be much more successful and will reflect better on the business as a whole.

The ability to honestly and ethically generate more online reviews will be a major differentiator among local businesses moving forward. Not only are reviews becoming crucial to the ranking of local search results across a variety of platforms, but they are on their way to becoming the most powerful influencer of consumer action. According to a Nielsen study, online consumer reviews are the third-most trusted form of advertising. Whatever lack of confidence that still pervades the review space will be eliminated as platforms improve their filtering processes and dishonest practices are punished. Given these facts, local businesses can’t afford to ignore reviews any longer.

Joe Morsello contributes to the Local Search Insider and is the Communications Manager at the Local Search Association, a trade organization of print, digital, mobile and social media companies that help local businesses get found. Follow LSA on Twitter @LocalSearchAssn.