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How Negative Online Reviews Can Improve Your Small Business

Meredith Wood

Meredith Wood

Editor-in-Chief at Fundera
Meredith Wood is the editor-in-chief at Fundera. She has specialized in financial advice for small business owners for almost a decade, and is sought out frequently for her expertise in small business lending. Meredith’s advice has appeared in the SBA, SCORE, Yahoo!, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, and more. Email: meredith@fundera.com.
Meredith Wood
Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone.

If you own a small business, chances are there are reviews of your company somewhere on the internet—and some of them very well might be negative online reviews. While this may seem bad for a growing business, negative online reviews are far from being all doom and gloom. On the contrary, they can make a business better. 

No business is immune from negative online reviews. It’s part of being a business owner. Negative online reviews matter as much as other types (neutral or positive) of online reviews, because reviews of any kind can better a business and ultimately drive growth. You should only really be concerned if you have no online reviews of any type since these reviews make your business more visible, help shape your brand perception, and help build trust between your brand and consumers.

Keep reading to learn about how negative online reviews can make your small business better, or jump to the infographic below for the best ways to handle various types of online reviewers. 

Just How Much Do Online Reviews Matter?

Even if everything in your business seems to be running without a hitch, online reviews can reveal the actual health of your business. Reviews show what customers really think of your product or service, how the customer experience is, and any other issues that might not otherwise be immediately obvious to you.

Consumers Take Online Reviews Seriously

Online reviews are undeniably important to a small business, given that 86% of consumers read online reviews for local businesses, and 91% of surveyed consumers aged 18-34 trust online reviews as much as personal recommendations.

Customers also want to see social proof before giving you their business. Social proof is a psychological phenomenon wherein people look to the actions and opinions of others as a representation of what is considered to be “correct” behavior to mimic. Because so many shoppers look to online reviews to guide their purchasing decisions, online reviews are a powerful form of social proof. In fact, consumers tend to read an average of 10 reviews before putting their trust in a business. 

Online Reviews Shape Brand Perception

You have the most control over direct messaging from your brand, but how much can you (or should you) control what others are saying about you online? Online reviews can lead consumers to pass judgment on your business, which plays a large part in shaping your online reputation and your overall brand perception. 

A positive brand perception gives your business a greater chance to be patronized over competitors, but even if you have several negative online reviews that seem to be dragging down your brand perception, don’t fear. It’s not static. With a little work, you can change your brand perception for the better, but only if you face the negative reviews head-on.

Getting negative online reviews doesn’t instantly mean that your brand perception will suffer. In fact, negative online reviews—for all the fear they strike in business owners—could do your company some real good. 

Negative Online Reviews Are Valuable, Too

Contrary to popular belief, positive online reviews aren’t all you need to drive sales and business growth. While it’s a good idea to try to increase positive online reviews—seeing as consumers are apt to spend 31% more at a business with “excellent” reviews—getting exclusively positive reviews shouldn’t necessarily be the goal. 

Negative online reviews of your business provide an opportunity to demonstrate how well you diffuse difficult situations, can help boost your conversion and retention rates, and may even do more to paint your brand positively in the eyes of customers. 

Negative for some also doesn’t mean negative for all. A PowerReviews study found that 85% of consumers use negative reviews to make informed purchasing decisions, but that doesn’t mean that each negative online review is a turn off for all consumers. In fact, what’s perceived as a negative for one could actually be a positive for another. 

Not all negative online reviews come from malicious intent. Only 12% of American online reviewers claim to write reviews with the intent of exposing bad vendors. Above all, consumers want to feel heard and to know their issues are being taken seriously. Therefore, it’s an opportunity for a small business to see what their customers really think or if there are trends in complaints that hint at a deeper issue.

Poor reviews can give customers an idea of potential issues (or worst-case scenarios) they could encounter when doing business with you. One study even found that 59% of consumers found it more valuable to read negative (of the one and two star variety) reviews than to read positive ones. That’s not to say you should take comfort in an overall one- to two-star rating. A mere 14% of shoppers say they’d do business with a company with such a low rating. Instead, business owners should know how to strategize when dealing with negative online reviews. 

How to Utilize Negative Online Reviews

In the face of negative online reviews, small business owners can take several approaches to turn a seemingly bad dig on business into something that’s productive on all fronts. 

While the most trusted sites for online reviews are Yelp, Facebook, and Google, negative online reviews can also seep into your company’s social media in the form of direct messages, Twitter mentions, or comments on your posts. No matter where a negative online review comes from, it should be handled in a timely, thoughtful manner.

Respond to Negative Online Reviews

Handling negative online reviews is all in the response, and ignoring entirely them spells out trouble. Since the majority of consumers expect a company to respond to a review within 24 hours or less, it’s safest to respond sooner rather than later.

As a general rule of thumb, you should avoid giving a boilerplate template response. Thoroughly read the review, apologize and acknowledge the complaint, owning up to mistakes if you’ve made them. It’s important to be honest and authentic, because 94% of consumers are likely to be loyal to a company that commits to complete transparency.

Rather than immediately hopping on the defensive, share your side of the story with tact and composure. Your reaction to a negative online review can matter more than the review itself. In responding to a review that paints you in a bad light, try to turn the negative into a positive.

Humanize Your Company

Negative online reviews can be valuable because they prove that there are real people behind your company. In fact, nearly all customers suspect either fake reviews or censorship if they don’t see any bad reviews posted on a company at all. Negative reviews, then, can build trust among a customer base. 

Negative online reviews give you a chance to show off your customer service skills and how well your company embodies its own values. They also can give you insight into your company that you otherwise may have never known had customers not voiced their adverse opinions.

Track Any Negative Trends

The best way to leverage unfavorable online reviews is to turn negative feedback into opportunities for improvements. Customers will value that you’ve taken their feedback seriously if changes at your business are implemented in response to their complaints. For instance, if you see that several online reviews speak about a few problematic employees, a lacking customer service element, or another noticeable trend, you can address issues early on.

Responding to negative online reviews can also help you with customer retention. Research shows that if your business makes an effort to resolve a customer issue quickly and efficiently, 95% of initially unhappy customers will return and do business with you. Retention through handling negative online reviews can easily be the best move for a business on a budget, because it can be anywhere from five to 25 times more expensive to acquire a new customer than it is to keep one. 

Unpleasant reviews can also lead you to build out your internal processes to encourage customers to approach you directly with feedback first as opposed to taking it to the public sphere. Make sure your customer service is accessible—and encourage customers to use these channels. 

Negative Online Reviews Are Valuable For Growth

Without constructive criticism, how can a small business hope to grow and improve? Negative online reviews can help you know what to improve on. While it’s easy for a small business owner to get caught up in focusing only on the positives and trying to minimize (or at worst, ignore) the negatives, unpleasant online reviews are an important tool to better a small business.

Overall, negative online reviews could serve your business well, depending on how you respond to them and whether or not you use them as opportunities to learn and to grow. See the infographic below for different types of online reviewers and how to deal with them.

Sources:
PowerReviews | BrightLocal | Vendasta | Podium | MediaPost | Invespcro | YouGov | MyCustomer | LabelInsight | LSAInsider | HelpScout

Meredith Wood

Meredith Wood

Editor-in-Chief at Fundera
Meredith Wood is the editor-in-chief at Fundera. She has specialized in financial advice for small business owners for almost a decade, and is sought out frequently for her expertise in small business lending. Meredith’s advice has appeared in the SBA, SCORE, Yahoo!, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, and more. Email: meredith@fundera.com.
Meredith Wood

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