bad reviews hurt small businesses
Dogan Kirnaz
Dogan Kirnaz Hi there! I'm a freelance writer specialized in copywriting and storytelling. I'm studying English Language and Literature at Akdeniz University and Public Relations and Advertising at Anadolu University.

Are you a small business in trouble with bad reviews?
Take a deep breath and lean back. Because the article you’re about to read will get you down. But don’t worry right away, we will help you find a way!

Harvard Business School has published a recent case study on reviews, reputation and revenue of companies that Yelp leads. This study examines reviews about restaurants on Yelp and finds a relationship with their incomes. Customer’s reviews can lead a restaurant to earn or lose money. Bad reviews can cause you to lose your future customers while good ones help you increase your reputation.

Bad reviews have much more effect.

Michael Luca’s recent study has shown that bad reviews have much more effect on your brand and company than you estimated. His research relies on restaurant reviews of the Yelp website and revenue data of the Washington State Department of Revenue. This research states that bad reviews can lead a company to go bankrupt.

People trust bad reviews.

Luca states that people trust bad reviews more than good ones. That means, if there is a bad review about your company, all eyes will be on it. Moreover, people will believe in this review without questioning whether it is true or not, and they will charge you about it.

They prefer easily accessible information.

People prefer easily accessible information rather than searching for it, according to this study. Your potential customers may prefer not to choose you even just looking at the average review score of your company. They don’t waste time reading all the comments about you, and you can’t stop customer loss if your score is below the average. 

Elite reviewers have twice more effect.

Yelp regularly brings some critics to elite status, and their comments are twice as powerful as others. So, if you get a bad review from an elite reviewer, your star falls like a restaurant that gets a bad review from a gourmet.

Even a one-star increase in reviews can boost revenue.

Luca states that a one-star increase in Yelp rating leads to a 5-9 percent increase in your revenue. Of course, this goes for the opposite. Good reviews can lead you to success in business, though bad ones can cause you to go bankrupt. 

Conclusion.

Bad reviews and company revenue is inversely proportional. One increases while the other decreases and vice versa. Bad reviews affect independent and small companies more than others. If you can’t find a realistic solution to deal with bad reviews, you may find yourself on the verge of bankruptcy.

Best practices.

Be aware of bad reviews before your potential customers. The more customers witness bad reviews about your company, the more reputation you lose. Be the first to see them and take care of them immediately. Take your time to watch our free courses to learn how our AI help you with this.

Learn how to handle bad feedback. The best thing you can do is solving your customer’s problems if you can’t get rid of a bad review. But turning bad feedback into opportunity is a challenging process. You should know a lot of things to do this. Check out our review removal page to get to know more.

Don’t create room for bad feedback. The best way to solve a problem is not to create a problem. Bad feedback often consists of poor service, customer dissatisfaction and poor self-promotion. It’s time to rethink your mission and vision if you often get bad feedback on the same issues.

Did you find this article helpful, or do you have any thoughts about the topic? Please share your feelings with us by writing a comment.

By the way, you can provide a bad review if you dare. Our AI will find you sooner or later. 😈

References & Further Reading:
Luca, Michael. “Reviews, Reputation, and Revenue: The Case of Yelp.com.” Harvard Business School Working Paper, No. 12-016, September 2011. (Revised March 2016. Revise and resubmit at the American Economic Journal – Applied Economics.)

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