Friday, July 12, 2024
CEOWORLD magazine - Latest - CEO Insider - Online Reviews are the Underrated Fuel Powering the American Economy

CEO Insider

Online Reviews are the Underrated Fuel Powering the American Economy

Joe Fuca

Businesses have gone through a lot over the last several years. From the global pandemic to inflation to an economic slowdown, they’ve had to find ways to innovate and thrive as consumer preferences change – which is faster than ever before. How can some businesses seemingly thrive amid the chaos, while others have faded into oblivion?

Here’s the secret: embracing the feedback economy. It’s powered by the conversations taking place on every touchpoint in the digital customer journey — from customer ratings to product reviews to social media posts.

Thanks to the digital age, one person’s opinion of a business can ripple across the entire consumer landscape with lightning speed — and live on as a permanent stamp of approval or badge of shame for the brand.

Reviews do more than influence a single company’s reputation. They shape purchasing behavior across the entire economy – to the tune of trillions of dollars.

Consider the reality that nearly half of all internet users post online reviews every month. And nearly 95% of people consult reviews before buying anything. Now consider that the total value of goods and services produced in the United States was $25 trillion in 2022, and you can easily start adding up how important reviews are. In 2021, reviews influenced $3.8 trillion, with $4.26 trillion spent globally on eCommerce alone.

These numbers make sense. From one industry to the next, reviews hold sway, as research from Reputation, shows:

  • 90% of retail consumers read a review before making a retail purchase, and 72% read multiple reviews.
  • 84% of renters read reviews before touring an apartment.
  • 85% of consumers say reviews are important when selecting an automotive dealership, and 70% will travel more than 20 miles to visit a top-rated dealership.
  • 86% of U.S. adults read online patient ratings and reviews when researching a healthcare facility or physician.

Let’s face it: no industry is beyond the reach of the impact of reviews.

How did reviews become so important? Because of the power of digital to amplify opinions. Reviews that were typically word of mouth are now amplified through digital. When Google turned online search into an everyday behavior in the 2000s, more people and businesses alike realized that reviews were popping up in search results when we looked for things to do, places to eat, and things to do. And those reviews began to make businesses more visible in Google search results.

Businesses began to take note and started paying attention to reviews. Responding to them. Learning from them and improving company operations, whether a restaurant was adding a new menu item based on a review or a retailer was stepping up its customer service because of star ratings.

And then social media exploded. Reddit. YouTube. Facebook. Twitter. Instagram. Snapchat. TikTok. And new platforms continue to pop up every day. Consumers were (and still are) swarming to these sites and talking up their experiences with businesses, whether rating a new car purchase on TikTok or sending a flaming tweet to an airline or internet provider. Now 61% of the world’s population are active on social media, and reviewing businesses is woven into that experience, no matter the channel.

Consumers shouldn’t shy away from leaving feedback. In fact, savvy businesses will welcome it – they  now recognize that being an active participant in the feedback economy is critical to growth. Business leaders are now tapping into technology, including AI, to constantly monitor the vast landscape of reviews and social media to find patterns – especially those with multiple locations.

Those businesses are using feedback from reviews and social media comments to make improvements across the board and develop or enhance products and services. Like Chipotle creating new menu items based on TikTok hacks. Or Airbnb achieving profitability sooner than expected after embedding customer feedback in every aspect of its business. Or national and regional auto dealerships relying on review feedback to improve every aspect of their businesses. On average, reviews can result in an 18 percent uplift in sales.

As a consumer of goods and services, like everyone reading this article, reviewing businesses has become a natural part of my buying process. Whether I had a particularly good experience at Levi’s Stadium during a 49ers game, or visited my doctor and had to wait longer than expected, I prioritize sharing my experience. My positive comments will empower a business to double down on what’s working, while constructive comments may help highlight a persistent challenge that needs to be addressed.

One of the most important battlegrounds for profitable growth going into 2023 is the customer experience (CX). According to the 2022 Gartner CMO Spend and Strategy Survey, marketers who use customer data, such as reviews, to heavily influence business decisions are 1.6 times more likely to see greater revenue growth in their organization.

So, how does a business win in the feedback economy? The key to success is to tap into technology to be an active participant. That means:

  • Asking for reviews, responding to them, and learning from them.
  • Combining those learnings with all sources of feedback, such as real-time social media insight, comments made in online chat, formal surveys, and more.
  • Using these myriad sources of feedback across the entire customer journey to continuously improve all aspects of the business.

I call this process of continuous improvement based on feedback ‘the infinity loop of feedback.’

The infinity loop of feedback is achievable through an AI platform that automates the heavy lifting of collecting all sources of review data from multiple digital locations, synthesizing it with your first-party data, and reporting customer sentiment, trends, and other important inputs through an analytics-rich dashboard. A strong technology platform applies social listening to monitor white-hot sources of real-time input, such as Twitter.

To be successful at reviews, businesses need to combine data with the inputs collected from formal surveys – and then synthesize the data with the input from the CRMs to improve customer and employee experiences, develop new products, and transform. And to enable this success, consumers need to speak up – tell the businesses that they interact with what they love about the customer experience and what could be better.

Many of Reputation’s customers have mastered this process. Utah-based integrated health system Intermountain Health revamped its review program and saw a 510% increase in review volume over six months, which helped it improve local search rankings for the system’s physicians, making it easier for consumers to start their care journey with Intermountain Health. In Europe, one of our restaurant customers noticed a repetitive comment from customers that left reviews about tomatoes on a specific sandwich. After removing the tomato from this particular menu item, their reviews improved and they saved $1 million per year.

This is achievable now. Businesses that learn how to manage feedback in real-time will win. Those that don’t will fall behind. Which one are you?

Written by Joe Fuca.

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CEOWORLD magazine - Latest - CEO Insider - Online Reviews are the Underrated Fuel Powering the American Economy
Joe Fuca
Joe Fuca, CEO of Reputation, a leader in changing the way companies gather and act on customer feedback to enhance customer experience. Reputation is a social listening platform that gathers feedback and data from social media platforms and translates it into prescriptive insights that companies use to learn from and grow.

Joe Fuca is an opinion columnist for the CEOWORLD magazine. Connect with him through LinkedIn.