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Responding to Online Reviews Can Help Your Business

Andrew Martins
Andrew Martins
Staff Writer

Do you respond to online reviews about your small business? Here's why you should, regardless of whether they're positive or negative.

  • Responding to online reviews can help solidify your online reputation.
  • When responding to negative online reviews, acknowledge the customer's pain points and be open to further discussion.
  • When responding to positive online reviews, thank the reviewer and incentivize additional purchases.
  • This article is for business owners who want to know how to respond to online reviews and boost customer engagement.

We've all had a bad day. Things don't always go the way we plan in our everyday lives, and that can often spill into our professional lives. For small business owners, a bad day can affect your customers' experience, leading to one of the more difficult things to deal with in our tech-infused world – a bad online review.

Gone are the days of customers writing reviews solely about individual items. With platforms like Yelp and TripAdvisor, the average person can share their experience with professional services and local shops with millions of potential customers around the world. That means every good and bad review that makes its way online can affect potential sales.

Approximately 86% of consumers read reviews for local businesses. In addition, "80% of 18- to 34-year-olds have written online reviews," while 91% of that demographic trusts online reviews as much as word-of-mouth.

Since customer reviews live on the internet in perpetuity, it's important for small business owners to try to steer the narrative surrounding their business. That means responding to critics.

 

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"By monitoring and responding to reviews, a manager can make sure that when negative reviews come in – as they inevitably will – they can respond constructively and maybe even raise their firm's rating along the way," wrote the authors of a 2018 Harvard Business Review study titled "Replying to Customer Reviews Results in Better Ratings."

According to the HBR study, which "examined tens of thousands of hotel reviews and responses from TripAdvisor,"hotels that responded to reviews saw a 12 percent increase in the number of reviews that came in and a marginal increase in their overall rating.

After looking into why that was the case, the authors suggest those better rankings came regardless of whether management was responding to positive or negative feedback. In fact, analysis suggested to the authors that responding to positive reviews "has the same benefits" as responding to negative comments.

These findings, the study reads, come from people's natural aversion to conflict.

"If the consumer notices a manager responding to past reviews, they might decide not to leave a trivial or unsubstantiated negative review, to avoid a potentially uncomfortable online interaction with the manager," the study's authors wrote. "Even though reviewers don't have to meet the manager in person, an online interaction between the two parties is permanently recorded and available for anyone to read in the future. To avoid situations like this, some consumers might choose not to leave a negative review."

Key takeaway: Responding to online reviews – both good and bad – can bolster your online reputation.

Should you always respond to online reviews?

study from the University of Denver's Daniels College of Business found marked impacts on the financial performance of hotels that responded to reviews on TripAdvisor. The research revealed that if a hotel had very few negative reviews, the company's financial performance dropped when company leaders responded to those posts.

The study also found that responding to online comments hurt financial performance when there were a lot of positive reviews. The study's authors said that responding to reviews in this situation can create unnecessary information overload.

"If subsequent consumers have already seen a very strong and clear signal about the quality of products and services from a large group … external disturbance from the completely different source (managers from the firm) would make consumers react to it negatively," the study's authors wrote.

For example, consumers may raise questions in their minds about the soundness of the business, which may lead them to become suspicious about the underlying motives of the response.

However, researchers found that if there are only a few positive reviews, responding helps increase revenue.

"Such actions can augment signaling of very positive ratings to potential consumers to accelerate the formation of brand relationship and then deepen customers' trust," the researchers wrote.

In addition, responding to comments when there are a lot of negative reviews can also improve financial performance, the study found.

"In the backdrop of firms shifting their social media emphasis from passive listening to active intervening, our findings provide important implications for practicing managers," the study's authors wrote. "Using our findings, managers can effectively utilize the efforts and resources required to manage online [reviews] and truly benefit from the wisdom of online crowds."

Key takeaway: Only rarely does responding to reviews negatively impact your company.

How to respond to negative online reviews

When it comes to responding to negative online reviews, Ryan Erskine, manager of client services at BrandYourself, wrote on Forbes that business owners should keep the interaction simple and to the point while calmly handling the criticism.

"A little sympathy goes a long way toward defusing the situation," Erskine wrote. "If the reviewer is complaining about bad service, you can still apologize that they had a bad experience without supporting their criticism of your attention to detail."

Responses should also be simple and direct, with some specifics based on the individual customer's problem.

"It's often a good idea to briefly speak to the reviewer's primary concern," Erskine wrote. "Doing so shows that you're paying attention to their review – that you hear them and care enough to tailor your response to their unique situation."

When possible, offering to handle the problem over the phone or in person could show potential consumers that you are willing to iron out any kinks while personally addressing a problem.

To hit all the above points that Erskine named, take the following steps:

  1. Respond within a day rather than several days.

  2. Address the customer by their name.

  3. Thank the customer for voicing their concerns.

  4. Apologize for not meeting the customer's standards.

  5. Directly name the concern.

  6. If a valid explanation exists for why the customer experienced subpar service, provide it. However, don't make up excuses if they don't exist. Instead, show how you'll address the issue with future products or services.

  7. Give the customer a refund, credit, discount or another perk unavailable to other customers.

  8. Invite the customer to contact you outside the review to discuss the situation further.

  9. End your response here to keep things appropriately brief.

You should never remove a negative review. Always take the above steps instead. A deleted review could lead to a new review from the customer saying that you deleted the review, which makes your company look even worse.

Key takeaway: To respond to negative online reviews, address the customer by name, thank them for sharing their concerns, and offer to discuss the matter further.

An example of a response to a negative online review

To best understand how to respond to negative online reviews, let's use a theoretical example. If a customer named John leaves a negative review saying that your company's tote bags constantly tear at the seams, an appropriate response given the above nine steps would be:

"Hi, John. Thank you for noting that you've seen our tote bags repeatedly tear at the seam – we apologize that you're experiencing this. We'd like to offer you a credit to buy a different bag, and if that one also tears, we'll give you a full refund. Please contact us at [your email address] for your credit, and feel free to request a call to discuss the situation further. We look forward to hearing from you, and again, thanks for voicing your concerns." – [Your name]

How to respond to positive online reviews

To respond to positive online reviews, you should:

  1. Respond promptly.

  2. Address the reviewer by their name.

  3. Thank the reviewer for leaving a review.

  4. Acknowledge the reviewer's key points.

  5. Reward the customer – perhaps with a discount on a future purchase – for their feedback.

  6. Share your positive reviews elsewhere.

Key takeaway: To respond to positive online reviews, thank the reviewer – by name – for their praise, and offer incentives for future purchases.

An example of a response to a positive online review

Using the above seven tips, let's craft a response to a customer named Jane, who praises your interior design firm's transparency and creativity. This response might look like:

"Hi, Jane! Thanks for your kind words about how transparent we keep our design process and how outside the box we are with our designs. Remind us of this review if you use our services again, and we'll give you 20% off. Thanks again!" – [Your name]

Additional reporting by Max Freedman.

Image Credit: Rawpixelcom / Shutterstock
Andrew Martins
Andrew Martins
Business News Daily Staff
See Andrew Martins's Profile
Andrew Martins has written more than 300 articles for business.com and Business News Daily focused on the tools and services that small businesses and entrepreneurs need to succeed. Andrew writes about office hardware such as digital copiers, multifunctional printers and wide format printers, as well as critical technology services like live chat and online fax. Andrew has a long history in publishing, having been named a four-time New Jersey Press Award winner.