The Influence of Reviews on Conversion
It’s a fair assumption that reviews play a significant role in influencing consumers to choose one business over another. After all, survey after survey has shown that most consumers read reviews before selecting a local business from the available alternatives, and review factors such as volume of reviews, star rating, and review keywords are considered by most local SEOs to be important factors in local ranking. Can the influence of reviews be quantified? This is one of the questions addressed by SOCi’s new State of Google Reviews report. The report examines the Google profiles of approximately 31,000 chain and franchise businesses, who together earned 4.9 million reviews from January 2015 to July 2022.
The study looks at month-to-month increases in star rating, review count, and the number of reviews responded to by the business and attempts to correlate those increases with changes in conversion rate. Conversion rate is defined according to the data points available in managed Google profiles, in particular Searches and Actions (called “Interactions” in the new NMX interface).
If we assume every Search is an instance of a business profile appearing in a SERP and every Action — including clicks to call, clicks for directions, and clicks to the business website — is an instance of a consumer taking a step that is likely to lead to a transaction, then we can define conversion rate as the proportion of Searches that result in an Action.
Across the entire dataset, SOCi found that the average Google profile generates 7,927 search impressions per month, and converts 4.2% of these impressions in the form of a phone call, direction request, or website visit.
Influence of Review Count
The study examines cases where a location gained new reviews from one month to the next, focusing on the most statistically significant range of results which consisted of gains of 0 to 45 new reviews. Line of best fit analysis was applied to a scatter diagram showing gains in reviews matched to gains in conversion rate. The result shows that conversion improves by 2.8% for every 10 new reviews earned by the business. The maximum gain in conversion rate, for businesses who earned 45 new reviews in one month, was 11.2%.
Influence of Star Rating
The study also finds that conversion of business profiles improves as average star rating increases. This part of the analysis found that the statistically significant range of increases on a month-to-month basis falls between 0.1 and 1.0 stars. Dividing this range into 0.1 increments, and again applying line of best fit analysis, shows that for every 0.1 star increase in average rating, a Google profile converts 4.4% better than before. Star rating therefore has an even greater influence than review count over improved conversion.
Influence of Review Response
Surveys have suggested that when businesses respond to reviews, consumers are more likely to look upon the business favorably. If that sentiment is accurate, then data analysis should show that business profiles convert more often when a business actively responds to its reviews. This part of the study examined the data to look for any correlation between conversion rate and the overall percentage of reviews to which a business has responded. If a business responds to 100% of its reviews as opposed to none, the study finds that conversion rate improves by 16.4%. Conversion also improves proportionally at lower rates of response.
The results are not as linear as with review volume and average rating. In fact, the most significant improvement in conversion rate occurs when a business responds to just 75% of its reviews, indicating that businesses need not respond to every single review in order to make a positive impression on consumers.
Takeaways: How Reviews Impact Conversions
Many business owners do not need to be convinced that having more reviews benefits their bottom line, or that responding to reviews creates a positive impression on consumers. But surprisingly, a large number of businesses still ignore these priorities, with only about a third of businesses responding to their reviews on Google. Data backing up the value of review building and review response helps to quantify the benefits.
Given the traffic and conversion rates cited above, a business earning an average of $30 per transaction will generate approximately $9,988 per month through Google — assuming for the moment that all calls, clicks, and direction requests result in a transaction. For this business, earning 10 new reviews equates to $280 in additional revenue; a rating increase of 0.1 stars boosts revenue by $440; and responding to all reviews (compared to none) results in a $1,638 increase. Many other factors influence conversion rates and these results are far from guaranteed, but they do suggest that the basic tactics of reputation management have a concrete impact on business success.