The secret ratio that proves why customer reviews are so important

While good customer reviews can increase sales, bad reviews can hurt them – these are obvious correlations. But did you know that there is a relationship between good and bad reviews even more important than the reviews themselves? That’s right, and it could make or break your success.

Understanding how customers interact with your brand and the customer experience you create is critical to your success. Consider the following:

  1. When customers are not satisfied, there is a 91% chance that they will no longer do business with a company (Lee Resources).

  2. Dissatisfied customers usually tell nine to fifteen other people about their experience; some say 20 or more (White House Office of Consumer Affairs).

  3. A negative customer experience is the reason 86% of consumers stop doing business with a company (Customer Experience Impact Report).

  4. Good customer experiences lead 42% of consumers to buy again (Zendesk Customer Service study).

Negative customer experiences lead to bad reviews, and a bad review can cause serious damage, the kind that takes more than a good review to fix. Read on to understand the theory behind the good / bad valuation ratio and find out how you can use it in your favor.

Report revealed

Here’s the ratio: It takes about 40 positive customer experiences to undo the damage caused by a single negative review. The report is derived from a combination of human behavior, math, and logic. Here is how I discovered it:

  1. A customer who has a negative experience is very likely to share this experience leaving a bad review.

  2. A customer who has a positive experience, on the other hand, is unlikely to leave a good review. In my experience, only 1 in 10 happy customers leave a good review.

  3. The rating of your business or product (usually out of five stars) reflects an overall average of good and bad reviews. So if your goal is to maintain an overall four star rating, you will need four five star reviews to make up for each one star review.

  4. Assuming that only one in 10 satisfied customers leaves a positive five-star review, and knowing that it takes four five-star reviews to compensate for each one-star review, you can imagine that it takes 40 positive customer experiences to compensate for one. only bad review.

All of this results in a good-to-bad valuation report that is virtually impossible to ignore. I’ve witnessed this firsthand with my business, and it increases the importance of getting great reviews by delivering great customer experiences.

Good customer experiences are priceless

There are a myriad of ways that positive customer experiences and reviews can benefit your business. Here are a few.

  1. Sales increase. In a study by Zendesk, 88% of customers have read an online review that influenced their purchasing decision.

  2. Brand reputation. Good reviews build your brand’s reputation without any extra work on your part.

  3. Free marketing. Satisfied customers provide valuable word of mouth marketing and often prove to be your biggest advocates. According to a study by American Express, 42% of consumers said a recommendation from a family member or friend would influence their purchase more than a sale or promotion.

  4. Product and company validation. If you are fundraising, investors and partners will no doubt be looking at your ratings and reviews. A high rating confirms that you have a great business that is worth investing in.

  5. Promotional material. Good reviews can be used as testimonials on your website, in your marketing creations, and as part of your social media marketing campaigns.

There is only one solution

If one bad review can negate the value of 40 great customer experiences, then your best bet is to focus on customer satisfaction. If it isn’t already, customer happiness should be just as important to your business as the product or service itself.

Here are three keys to customer happiness.

  1. The quality of the products. Your product, service or application must deliver the value you promise in a reliable manner. It should work so well that 99% of your customers never call customer service.

  2. Customer service. Great customer service not only prevents bad reviews but also helps define your brand. Keys to the customer service equation include knowledgeable and compassionate representatives, a manager who can effectively handle escalations, multiple means of contact (email, phone, chat, etc.), and convenient opening hours.

  3. Educate users. I am an advocate for educating clients on how to use a product. For example, when some of our customers at SkyBell complained that our video doorbell motion sensor did not activate immediately, we responded by explaining why we added a five to 10 second delay. Once educated, our customers were grateful for the functionality instead of being frustrated.

When you focus on improving customer happiness, it helps prevent negative experiences that lead to bad reviews. And, by the calculations, avoiding bad reviews is even more important than getting good reviews.

Positive customer reviews are one of the most important factors in your success, and the surest way to get them is to provide a great customer experience. Take the time to understand the customer review rate, then evaluate your product, customer service, and training efforts. This will help you keep customer satisfaction under control and avoid the bad reviews that are so hard to reverse.

The opinions expressed here by the columnists of Inc.com are theirs and not those of Inc.com.

Joseph P. Harris