Chapter 1: Why Online Reviews Are More Important Than Ever
Note: this is an excerpt from the book Delivering Five-Star Restoration Experiences from KnowHow. Click here to download your own copy for free.
Businesses today have more tools than ever before to spread awareness about their product or service. From billboards to commercials, search engine ads to Facebook
Video, the opportunities to get the word out about the services you provide have never been more plentiful. Yet with all these options at our disposal, there’s one marketing avenue that beats every other channel by miles, and it happens to be as old as language itself. We’re talking about good, old-fashioned word-of-mouth.
No celebrity endorsement or Super Bowl advertisement has the same level of influence in someone’s perception of a brand than a real story from a real person. Research shows that 91% of people regularly or occasionally read online reviews, and 84% trust online reviews as much as a personal recommendation. It turns out that trust still goes a long way these days, and consumers are far more likely to trust real words from real people, whether positive or negative, than paid words from a brand trying to make another sale.
The internet era has done a great job facilitating these conver- sations, with sites like Google, Angie’s List, Yelp and more giving real people an opportunity to share their real experiences with businesses, either as a commendation or a word-of-warning to future customers. Online reviews have put customers in the driver’s seat of the contractor-consumer relationship. Armed with a keyboard, your customers have the power to ruin your business more than ever before, or provide it with rocket fuel to blow past your competitors. Implementing strategies to increase the quality of online reviews must be a top priority.
These online reviews pack a serious punch, and have shifted power away from companies with the highest marketing bud- gets, and into the hands of ordinary people, who can use their personal testimony to either prop up a business that does an excellent job, or cut down one that missed expectations.
Even 1 negative review can drive away 22% of potential prospects
For many business owners, especially those in drive away the restoration industry, this isn’t news. We’ve all 22% of seen how positive reviews can lead to a sharp potential increase in new sales leads, and have felt the prospects sting of negative reviews on our ego, staff morale, and wallets. Whether a customer is complaining about a job done poorly, a bad run-in with subcontractors, or simply erratic driving from a new employee, these bad reviews can have a massive impact on your ability to win new customers, attract and retain top talent, and stay on an insurance provider’s good side.
Individually, positive or negative reviews can preserve in time the admirable story of an employee that went the extra mile, or a disastrous encounter thanks to a receptionist that missed her morning cup of coffee. In aggregate, these reviews can influence tens of thousands of dollars in potential business. A report from Harvard Business Review found that every 1-star increase on Yelp led to a 5-9% increase in revenue – no small impact. This equates to roughly $100,000 of additional in- come for a business accumulating around a million dollars in gross revenue.
Conversely, research shows that one negative review alone - one! - can drive away 22% of potential prospects, and the impact only increases from there. To bring this home, if your business does $2M in revenue a year, that one negative review could cost you 29 potential jobs. If your average job size is $8,000, then that’s $232,000 of lost revenue every year, because of one bad review.
To say that each positive or negative review could have an impact on future business would be an understatement.
KnowHow is a software tool designed to improve the consistency and quality of project outcomes. With so much at stake, we wanted to deeply understand what factors lead to bad on- line reviews in the restoration industry.
Was it poor workmanship? Major project delays? Bad customer service? If a restoration company understands their biggest risks, they can address, target, and eliminate issues before they arise, potentially avoiding lost revenue and creating a competitive advantage for themselves in the market.
In order to accomplish this, we captured and analyzed data from the most popular online reviews platform: Google Reviews. Over the course of our research, we collected over 1,000 1-star reviews from restoration companies in all 50 U.S. States, and then sought the perspective of some of the industry’s top experts, on a mission to discover the common factors that contribute to a company being publicly shamed by former customers, and how you can avoid a similar fate.
Our analysis proved insightful, surprising, and at times more eyebrow-raising than we were expecting. During our research, we came across stories ranging from the mundane (complaints about no-show appointments) to the truly wild (public drunkenness, theft, and accusations of marital infidelity). Don’t worry, we’ll share all the best ones with you, and for better or worse, we’ve chosen to keep everything anonymous.
The restoration industry often attracts customers who have experienced stressful situations such as fires, floods, or even death. Our analysis not only provides context into the think- ing, values, and desires of these types of customers, but also gives restoration companies a clear and actionable roadmap to avoid common pitfalls. By using this information, companies can mitigate risk and provide a world-class experience to customers who might be experiencing one of the worst weeks of their life.
We’ll unpack all the patterns and common failure points we discovered, diving deep into the eight most significant factors that led to poor reviews for restoration companies. These include delays, bad customer service, poor communication,