JC Lupis | Marketing Charts | Thu, 27 Aug 2015 13:30:09 +0000

North American consumers are increasingly reading online customer reviews to determine if a local business is a good business, though maybe not quite with the same frequency as last year, according to BrightLocal’s latest annual Local Consumer Review Survey. The survey – fielded among 2,354 US (90% share) and Canadian (10%) consumers – finds that 92% at least occasionally read customer reviews to judge a business, up from last year’s 88% and 71% in 2010.BrightLocal-Use-of-Online-Customer-Reviews-Aug2015

Compared with last year, slightly fewer respondents this year reported regularly reading reviews (33% vs. 39%). And the influence reviews have on their decisions appears to have also slightly dropped, as slightly fewer said that positive customer reviews make them trust a business more (68% vs. 72%).

Indeed, when asked how online customer reviews influence their decision to use/select a local business, fewer respondents this year chose the option that positive customer reviews make them more likely to use a local business (51% vs. 58%). But that was still 3 times as many as said they read reviews but those reviews don’t influence their decision on which local business to use (16% this year versus 11% last year). It was also more than said they tend to select a local business based on other factors such as location and price (33%).

BrightLocal-Influence-Customer-Reviews-Local-Biz-Selection-Aug2015

A recent MarketingCharts study pitted online consumer reviews against various media advertising channels in purchase influence, finding that they influenced more adults than all paid media save for TV ads (which they were only slightly behind). As with the BrightLocal results, the study found the influence of consumer reviews to have slightly diminished from last year, when they were cited by more respondents than TV ads. Other results from the MarketingCharts study indicate that consumer reviews have broader purchase influence among Millennials and higher-income households.

Returning to the BrightLocal study, the results indicate that more respondents have read local business reviews in the past year on PCs (73%) than on the mobile internet (38%) or on mobile apps such as Yelp (24%). Restaurant and café reviews (60%) remain the most commonly read, followed by doctors and dentists (35%) and general shops (30%). On average, consumers reported reading reviews for 3.5 different types of businesses, up from 2.7 a couple of years ago.

When reading reviews, the great majority (73%) of respondents feel they can trust a business by reading 6 or fewer reviews. Asked to select the top 2 factors they pay most attention to when judging a local business on its reviews, respondents pointed first to its overall star rating (60%), followed by the quantity of reviews (44%), the sentiment of reviews (38%) and the age of reviews (33%). Regarding the age of reviews, almost 7 in 10 believe that they need to have been written within the last 2-3 months to be relevant.

Given the importance of star ratings, it’s interesting to see what the minimum rating threshold is for respondents to use the business. Only 6% said that their minimum threshold was 5/5 stars, while another 38% said 4/5 stars and a plurality 43% 3/5 stars. In other words, a majority (57%) of respondents would use a business if it had 3/5 stars.

For the most part, consumers trust online customer reviews as much as they do personal recommendations, as only 1 in 5 said that was not the case. But, various conditions need to be met, such as a belief in the reviews being authentic and the existence of multiple reviews to read. Only 8% reported that they always trust online customer reviews as much as personal recommendations.

Word-of-mouth, the leading purchase influencer among US adults, was again the leading method by which respondents said they had reviewed or recommended a local business to people they know, beating out Facebook by a 2:1 margin (34% vs. 17%). This is supported by recent CrowdTwist survey results, in which face-to-face topped social as a word-of-mouth vehicle among both Millennials and Gen Xers.

In other results from the BrightLocal survey:

  • The most common step respondents take after reading a positive review is to visit the business’ website (48% share), followed by visiting the business (23%) and shopping around (21%);
  • The most important reputation attribute to respondents when selecting a local business is reliability, followed by closely by value and professionalism; and
  • Reliability and professionalism are the factors that would make respondents most likely to recommend a local business, followed by the business being friendly and welcoming.

About the Data: The survey was fielded in July 2015 among 2,354 respondents from BrightLocal’s Local Consumer Panel.

The post Online Customer Reviews Remain Highly Influential in Consumers’ Local Business Decisions appeared first on Marketing Charts.