Reputation Management: Effects of Negative Online Reviews on Consumers

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Reputation Management: Effects of
Negative Online Reviews on
Consumers
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A study on the effects of negative business
reviews on consumers’ product attitude, risk
perception, and purchase intention shows that
the rapid growth and proliferation of electronic
word-of-mouth (eWOM) created a new threat
to Internet marketers.
According to the study, this occurs as paid
online reviewers flood sites with service and
product reviews that deter and confuse
customers. Furthermore, the findings revealed
that Internet Water Army Attack (IWWA) —
which refers to a hired reviewer’s post aimed at
ruining the reputation of certain businesses —
is effective in changing a customer’s attitude
and intention in buying and increasing risk
perception towards a product.
Given that negative business reviews can
immediately 
turn 
customers 
away,
understanding how to deal with negative
reviews online will allow you to develop a good
reputation management strategy. Furthermore,
it will provide you with insights into improving
your brand and how people see it.
Effects of Negative Business Reviews
Consumers today use search engines like Google
for research before making a purchase. Their
research usually includes comparing brands,
products, and prices online. During their search, it
is highly likely that they would encounter both
positive and negative reviews of products and
services.
In general, online reviews affect 67.7% of
consumers’ purchasing decisions. According to a
study, online reviews also differ depending on the
online platform. While positive reviews lead to
increased sales and better search engine ranking,
negative online reviews pose detrimental effects
on businesses, including:
Loss of Revenue
Bad reviews on Google, Facebook, and Yelp
significantly affect revenue. For one, a business
with a 1- to 1.5-star rating reports 33% less
revenue than an average business. Interestingly,
Forbes mentions that 94% of consumers steer
away from a company that gets bad reviews.
Undermined Business Reputation
While you spend a lot of time and effort to
protect your reputation, negative reviews
have the power to sabotage what you’ve built.
Several people do not make transactions with
businesses that have questionable credibility.
In a Forbes report, 85% of customers say they trust
negative and positive reviews as a personal
recommendation. 
The 
report 
stresses 
the
importance of responding well 
to negative
reviews by expressing genuine concern towards
the negative experience and offering viable
solutions. Doing so helps build trust for both
reviewers and prospective clients.
Lower Site Visitor Count
Research shows that negative online reviews drive
away 22% of prospects, which is around 30
customers. As negative online reviews increase in
number, the percentage of lost customers also
increases. Specifically, three negative reviews
cause 59% of lost customers, while more than four
negative reviews drive away 70%.
Low Search Engine Ranking
Review ratings affect how your business would
rank on search engines. More specifically, negative
ratings make your business rank poorly, as search
engines would only recommend enterprises with
the least number of negative reviews.
Less Profit
Negative online reviews drive customers away
and consequently decrease your revenue. More
so, using different means and solutions to rectify
the situation can also affect your profitability.
Online Reputation Management: What Is It?
As the internet continuously shapes the business
landscape, hiring professionals for reputation
management services has become a must for
every business.
The developments in the online business world
have caused changes as to how customers relate
to you and how they get to know about your
business’s online reputation. While this scenario
makes it easier for customers to leave bad
reviews about the service, it becomes more
difficult for the different companies that serve
them to conduct online reputation management.
In the past, the speed of word-of-mouth limited
the extent of damage from a single negative
customer experience. Today, a single negative
online review can destroy a business under the
right circumstances. Because of this, it becomes
imperative for businesses to know how to deal
with negative reviews online smartly.
As more businesses — from solopreneurs to big
corporations — become aware and try to protect
their online reputation, many now recognize the
importance of online reputation management.
Online Reputation Management: How To Do It
Right
Deliver Good Work
An essential part of your online reputation
management strategy involves starting at the
roots — boosting your work quality. It pays to offer
excellent work and make it easy for customers to
give you a positive review. In addition, it boosts
your popularity and increases your SEO rankings.
Involve Your Customers When Making Business
Decisions
Engagement is a practical way to conduct
efficient reputation management services. To do
this, you can use informal questions, ask their
ideas, and use customer surveys. You’ll be
surprised as to how this form of business relations
brings about goodwill.
Respond Properly to Negative Reviews
Many businesses make the mistake of ignoring
negative reviews when they spot them. Your
silence may sometimes translate as agreement
and may signal a lack of care. Alleviate this with
an effective reputation management strategy to
make sure that you keep your cool and respond
to reviews appropriately.
Online reputation management is easier said
than done, but we’re here to help!
As a long-standing full-service digital marketing
company specializing 
in online 
reputation
management, Advanced Digital Media helps you
establish a reliable online presence 
in a
competitive 
industry. 
Leverage your online
reputation and handle negative business reviews
with grace. For inquiries, contact our team today.
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