Having all 5-star reviews won’t help your business. Here’s why.

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Everywhere you look, reviews are prominently on display and asked for. The local bakery on the corner wants a rockin’ Yelp page, the hole-in-the-wall restaurant everyone raves about could always use a few more positive accolades. Heck, even my dentist asked for a review. 

While it can sometimes seem like overkill, the enthusiasm is understandable. Consumers are savvier and better informed than ever before. Whether picking out a restaurant for Friday date night or an accountant for tax season, customers have plenty of reviews and websites to peruse before making a decision. 

But what is the actual impact of these reviews? Does it really matter if your business is a 4.6 or a 4.7? And how on earth do you respond to those customers who are determined to upend your positive TripAdvisor page with their own bad experience? 

INSEAD associate professor of marketing Paulo Albuquerque studies brands and consumer decisions. He recently conducted a study on the impact negative reviews can have on a company’s image, and walked me through how small businesses can manage their own brand image and reviews.

Below is an edited transcript of our conversation.

How important are reviews, both positive and negative?

More people believe reviews than what the firm or the brand tells them. In terms of numbers, 80-90 percent of people will believe what they read in a review, even though there are a lot of fake reviews. Consumers take both the positive and negative ones into account. But what we also see is that sometimes just one negative review on a page can shift their choices by 10 to 20 percent.

Most platforms are biased toward having more positive reviews. Majority will be four and five stars. Because of that, people discount the value of that and when it’s one or two stars, they pay more attention. It depends on what the ratio is of positive to negative. If it’s dominated by positive reviews [then] that unusual signal of a negative one gets more attention. If it’s more balanced, the views are also more balanced. 

People will pay more attention to what is unusual. If you only have positive reviews, that’s also not good. Consumers think it’s fake if a business has 1,000 reviews and all of them are five stars. There is a report that says 4.7 or 4.8 out of 5 stars is an optimal level and if you go up to 4.9, the brand will suffer.

What if a business doesn’t have any reviews at all?

Brands with reviews do better. When managers are thinking about generating reviews, they should first think if the brand is going to generate a good review. Is the product good enough? Will consumers be delighted or satisfied? That is the first step to take even before thinking about reviews because of course you can’t satisfy everyone.

How should a business owner handle those complainers and people who leave negative reviews? Should they respond?

The research shows that having a response is good. Being defensive is not good in that you’re apologizing but not showing how the experience for the next consumer will improve. Most of the time, the person reading the review is not the same person who already went to the service or hotel. It’s a new consumer exploring. People think ‘someone wrote this complaint, will I suffer from the same bad service?’ If the person sees in the response that the issue has been addressed or that it was unusual and will not be repeated, then they either have no impression or a positive one. In practice, you have to address the comment of the complainer but with the objective of knowing that new consumers will be reading it.

Businesses of all varieties have placards out asking their customers for reviews. What’s the best way of soliciting them?

People don’t like to be interrupted. There are a lot of apps like an online game or something where a window pops up asking you to write a review or give four stars. For those types of services, I would not advocate for that kind of approach. You could do it through a more passive way by basically saying here’s the website and you can offer your feedback. Another option is when you send the invoice from the last purchase, put an additional area for people to submit a review. It has to be the lowest cost possible and the lowest interruption possible where people see they’re helping the next customers but it doesn’t feel like a pain. When people go to write a review, it’s not because they want to but because they want to avoid you asking again.

Are there industries where it’s more crucial to have reviews?

Yes, usually for industries where the experience is more valuable to consumers than the technical part of the product. Hotels, restaurants, etc. Of course the food itself has to be good, but consumers are also looking for information about the experience. Is it in a good neighborhood or is there a lot of noise? Anything that is experience related, reviews will be more valuable because it’s information you can’t just see on the website. The other is for products that are more complex or expensive. Customers want to know more about it before they decide and make sure they’re making the right decision, which leads them to seek out more reviews.

How have you handled negative reviews of your business or product? Do you have a strategy for soliciting and showcasing the best reviews from your customers?

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