The impact of customer reviews on online sales

Why Are Customer Reviews Essential?

Shopping behavior has changed. Consumers today are well-informed, have high expectations, and are often influenced by what others say. In the world of online shopping, customer reviews are not just a nice addition—they are the deciding factor.

Think of the customer journey as a path filled with online touchpoints that a person navigates before making a purchase. Customer reviews act as crucial signposts along that path. A good review can give someone the final push to buy, while a bad review might make them turn away.

But customer reviews are more than just guides; they are a dynamic part of the online shopping experience, allowing buyers and sellers to communicate in real-time. They build a bridge of trust between you and your customers.

In this blog, we'll explore the impact of customer reviews. We’ll examine how reviews truly influence shopping behavior and offer tips on how businesses can use their reviews to boost sales and build a loyal customer base.
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The Impact of Customer Reviews

Every click, like, and review matters. But some interactions carry more weight than others, and reviews are the perfect example. They are not only an indication of the quality of your product but also a great opportunity to earn a customer’s trust.
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Genuine Reviews, Genuine Trust

In a world where everyone has an opinion, customers look for real experiences. Customer reviews provide an honest glimpse into what to expect, building trust. When people read an authentic review, they are more likely to make a purchase.
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The Influence of Others

We are social beings; we listen to what others have to say. This is the "herd mentality": if others like it, it must be good. So, if your website is filled with positive reviews, new customers are more likely to expect a positive experience as well.
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Honesty Wins

A business that prominently displays customer reviews comes across as transparent and trustworthy. It shows that you take all feedback, both good and bad, seriously. This makes you credible and shows that you’re willing to learn and improve.
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From Observer to Advocate

Customer reviews turn your customers into ambassadors. By writing a review, people feel involved and appreciated. They feel their voice is heard and that they are part of a community.

In short, customer reviews are essential. They play a key role in customer decision-making and help build long-term relationships between you and your customers. Next, we'll dive into how to manage and optimize this valuable feedback.

Want seamless integration of emails, SMS, forms, etc., with reviews? Read more about Klaviyo Reviews.
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Positive vs. Negative Customer Reviews

In the online world, you can’t expect only glowing reviews. Both praise and criticism will come your way. It’s important to know how this feedback can either make or break your business. Let’s look at the pros and cons.
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Positive Reviews: More Than Just Praise

• Building trust: A positive review is like a digital pat on the back. It reassures new customers and makes them more likely to open their wallets.
• SEO Bonus: A positive review isn’t just good for your ego; it’s also good for your Google ranking. The more glowing reviews, the better your visibility in search results.
• Free publicity: A positive review is often shared. That’s free advertising you don’t want to miss.

"Positive reviews reassure potential customers that they can trust your brand, your products, or your services. The data backs this up. Up to 84%..." (Terakeet)
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Negative Reviews: A Wolf in Sheep’s Clothing?

• Reputation damage: A bad review can spread like wildfire and damage your image. But, don’t panic.
• Learning opportunity: Negative feedback can be painful, but it’s also a chance to improve. Listen to your customers and adjust your offerings.
• Recovery opportunity: A good response to a bad review can work wonders. It shows you care about your customers and take their problems seriously.

"According to research, 94% of consumers say that a negative review makes them less likely to buy from a business, and 86% of consumers hesitate to purchase from a business that has negative online reviews." (LinkedIn)
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The Middle Ground: Neutral and Mixed Reviews

• Balanced perspective: Not every review is extreme. Sometimes, there are moderate opinions, and these can be just as valuable. According to the American Marketing Association, neutral reviews can actually change how consumers perceive positive and negative reviews.
• Complete picture: A mix of good, moderate, and bad reviews gives a more realistic view of your product or service. This mix helps consumers get a nuanced idea of what to expect.

In short, every review matters. By listening carefully and responding wisely, you can fine-tune your offerings and build stronger relationships with your customers.
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Case Studies

Customer reviews are like a double-edged sword. They can boost your business but can also hurt it badly. Let’s look at three companies that have experienced this firsthand.

• Amazon: The Power of Reviews in E-commerceAccording to research by Spiegel Research Center, Amazon, the e-commerce giant, has always understood the power of customer reviews. They’ve developed an extensive system where customers can share their experiences, which helps build trust and improve product recommendations. The result? Increased sales and a loyal customer base.
• Uber: The Danger of Bad ReviewsUber has experienced the harsh side of customer reviews when a series of negative reviews about driver safety and behavior led to a decline in app usage. This forced the company to overhaul its safety measures.
• Airbnb: Authentic Reviews as a Marketing ToolAirbnb takes a unique approach to customer reviews. They encourage both guests and hosts to leave reviews and actively respond to feedback. This approach has not only improved ratings but also strengthened their community, according to the Harvard Business Review.

Customer reviews significantly impact a company’s success, both positively and negatively. It’s crucial for businesses to actively manage and respond to these reviews.
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The Psychology Behind Customer Reviews

When you think of customer reviews, you probably see stars and ratings. But there’s much more to it. Reviews are tied to psychological factors that influence our decisions. Here are 5 key factors at play:

1. Follow the Crowd: People are herd animals. We like to see what others are doing before making a decision. In online shopping, this means that if others like a product, we are more likely to buy it too.
2. Authenticity is Golden: In a world full of fake news, real opinions are priceless. Customer reviews give us the feeling that we can trust a company. A few negative reviews? No problem—that makes it more believable.
3. Stories that Sell: We love stories. Detailed customer reviews are little stories that help us imagine what it’s like to use a product. This makes the choice much easier.
4. Decision Fatigue? Not Anymore! Online shopping can be overwhelming—too many choices! But customer reviews help us filter options and make a faster decision.
5. Safe and Secure: Nobody wants to make a bad purchase. Reviews from other customers make us feel that we’re making a safe choice. They take away some of the risk.
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3 Tips: Managing and Optimizing Customer Reviews

How do you get the most out of your reviews? Here are some simple tips to help you along.

1. Make Reviews Shine:
   • Filter options: Allow customers to sort reviews based on what’s important to them, like "best review" or "most recent." This way, they find what they’re looking for quickly.
   • Eye-catching quotes: Use beautiful visuals to highlight positive reviews. This draws attention to what really matters.
   • Reviews everywhere: Make sure reviews are easy to find, whether they’re on a product page, during checkout, or in an email.
2. Negative Reviews? Don’t Panic!
   • Be quick: A negative review is a chance to show you’re listening. Respond quickly and with understanding.
   • Solve the issue: Don’t get defensive. Instead, look for a solution that makes the customer happy, whether it’s a refund or a promise to do better.
   • Learn and improve: Take negative feedback seriously. It can give you valuable insights into what needs improvement.
3. More Reviews = Better
   • Just ask: Happy customers love to share their experiences. A simple email after a purchase can work wonders.
   • Reward loyal customers: Consider offering a reward for customers who frequently leave reviews, like a discount code or points for your loyalty program.
   • Keep it simple: Make it easy for customers to share their opinions. A complicated review process is off-putting.

By following these tips, you’ll turn every review into an opportunity to grow and improve. After all, reviews are more than just stars—they’re your customers’ voices.

Tip: Read our article on how to retain customers using a loyalty program.
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Measuring the ROI of Customer Reviews

Measurement is key, and that applies to the value of customer reviews as well. Businesses invest heavily in review systems, feedback programs, and even teams to respond to negative reviews. But how do you know if it’s all worth it?

Before we break out the metrics, let’s first acknowledge that reviews do impact sales. According to Frankwatching, “the impact of an online review is compared by nearly 90% of consumers to a personal recommendation.”

Which KPIs Should You Measure?

• Conversion Rate: If you notice more visitors becoming customers after you’ve added a review system, that’s a sign it’s working.
• Average Order Value: An increase here may mean customers trust you more, often thanks to positive reviews.
• Returning Customers: If people come back after reading or writing reviews, you know those reviews are making an impact.

Smart Tools for Smart Analysis

Various tools can help you measure how reviews affect your sales. For example, Google Analytics shows you how often people check the review section before making a purchase. Other tools can even analyze the overall sentiment of the reviews. If you’re using Klaviyo and Shopify, you can manage all your data on one platform with Product Reviews.
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Balancing Costs and Benefits

It’s essential to look not only at the returns (more sales, improved brand image) but also at what it costs you. Consider the expenses of setting up a review system, training your team, and responding promptly to negative feedback.

Measuring the value of customer reviews goes beyond just sales figures. It’s about understanding your customers, tracking key indicators, and using analytics tools wisely.
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More Than Just Stars and Comments

Reviews are real trust-builders between you and your future customers. Positive reviews can give your sales a significant boost, while also providing valuable insights to improve your product. Instead of viewing them as mere feedback, see them as an opportunity to strengthen your relationship with your customers and grow your business.

Do you have any questions after reading this article on how to best manage your customer reviews? Get in touch with Polaris Growth.