Online Reviews used to be a “nice to have.” But that was years ago when people assumed they only applied to a few local categories, like restaurants or hotels. Now they’re mandatory for everyone.
Enlightened companies large and small have long been attuned to the value of reviews for multiple reasons. They offer an important customer feedback mechanism and give consumers confidence to make buying decisions. However, when Google identified reviews as a ranking signal (under “prominence”) the stakes were considerably raised.
And as those stakes have grown, so have the challenges and problems: review fraud, review inflation and “pathing” or screening for satisfied customers. (As an aside, see this very interesting piece on the future of reviews from Milestone Internet Marketing’s Sathya Krishnamurthy.)
Location3 Review Impact on SEM Conversions Study
Source: Location3 (pdf)
More data in support of the importance and value of reviews was released in the form of a new study by Location3 on how the presence of reviews and business owner engagement (responding to reviews) impacts paid search conversions. The firm, which primarily manages campaigns for multi-location brands and franchises, looked at 16 months of AdWords data for more than 7,000 business locations as well as 72,000 reviews to determine correlations and connections.
Conversions in this context means a range of actions on landing pages and websites such as form fills, requests for quotes, email inquiries and so on. So we’re not talking about just clicks.
More and better reviews — in terms of the number of stars — were related to better conversion performance. A ~1.5 star rating bump improved conversions from 10.4% to 12.8%. Location3 said that represents (for these businesses in the aggregate) about 13,000 more leads in real-world terms.
The firm added that review-response rates also positively impact paid search conversions. Locations that did the best job of responding to reviews in the study saw an average conversion rate of 13.9%, while those at the bottom saw a 10.4% conversion rate. Google similarly encourages business owners to respond to reviews, though it doesn’t say that factors into local rankings.
It’s clear that reviews influence search rankings and now SEM performance. They map directly to conversions and revenue, which makes the future of reviews even of a cat and mouse game, as more and more firms try to game the system.
Source: LSA Insider