In the past, big name chains dominated the hotel, pub, and restaurant sector, based in large part on sizeable advertising budgets and brand awareness. But the dawn of smartphones and the exponential increase in mobile online searches have levelled the playing field. Today’s consumer has more access to knowledge and information than ever before, with smartphones providing answers anytime, anywhere.
Nearly half of all Google searches today are queries for local information, and the number of consumer searches for ‘hotel near me’ or ‘pub open now’ has skyrocketed. This change in consumer behaviour presents independent businesses with the untapped potential to get greater visibility online than ever before – and drive consumers to their doors.
Reviews are the new currency
Once consumers have the results of their ‘near me’ searches, their next step is to weigh up their options. Today, that means evaluating customer reviews. 95% of consumers say that online reviews influence their decisions and 88% now trust online reviews as much a personal recommendations, per Uberall’s Reputation Management Revolution Report. And reviews are particularly important in the hospitality industry, with nearly 8 out of 10 UK consumers who have checked online reviews having done so for hotels and restaurants, per Uberall’s 2019 survey of online review practices.
When it comes to deciding which business to choose, consumers are increasingly turning to the advice of their peers, backed up with the firsthand “proof” that online reviews provide. Whether it’s on Google, Tripadvisor, Facebook, or Yelp, strong review ratings are critical to convincing consumers your business is the one worth visiting.
Smaller businesses surpassing big brands with customer reviews
When it comes to online review ratings and engaging with customer reviews, smaller businesses – those with fewer than ten locations – are beating bigger brands according to new research by Uberall. Analysing the Google My Business profiles of 64,000 business locations across the UK, Germany, France, and the U.S.A., research reveals that across six different industries – including food and beverage, retail, travel, and automotive – smaller businesses have a higher average star rating than businesses with more than 10 locations. This is good news for independent businesses, as higher star ratings mean a higher conversion rate, with a star rating difference from 3.5 stars to 3.7 stars translating to a 120% difference in conversion growth from one year to the next. Whether it’s because – as studies have shown – consumers prefer to give their custom to small businesses over chains, or because smaller businesses are simply performing better, smaller businesses are scoring higher than big brands.
The research further shows that smaller businesses are more responsive than their larger competitors. Smaller businesses respond to online reviews 26% of the time, which is almost double the rate of businesses with more than ten locations (14%). The biggest brands – with more than 740 reviews per location – respond even less, replying to reviews only 0.2% of the time. Although smaller businesses are outshining their larger counterparts, there’s still substantial room for improvement for businesses of all sizes.
Reply more, win more
Conversion rates climb sharply when brands engage with online reviews left by customers. For instance, when a smaller business responds to 32% of customer reviews, it will enjoy nearly 30% higher conversion rates than if it replied to just 10% of reviews. Although smaller businesses are currently responding the most to customer reviews, as compared to bigger businesses with ten or more locations, a whopping 74% of their online reviews still aren’t receiving any reply at all.
Simply by responding to one in three, rather than one in ten reviews, smaller businesses can expect conversion rates to grow by nearly one-third, substantially increasing the number of people clicking for more information, whether that’s on a pub’s phone number, on driving directions to a restaurant, or on a hotel website link to make a booking.
Engage your customers IRL
When it comes down to it, strong review ratings are based on great customer experiences. Customers are inspired to write positive reviews when they feel like they matter and that you’ve given them a top notch experience. Happy customers tell their friends, share on social media, and give top ratings online. It’s the in-person moments that build a strong online reputation.
For businesses of all sizes, star ratings and responsiveness to reviews are absolutely linked to driving consumers who are searching online to offline stores. Currently, big brands aren’t doing enough to connect with consumers who are searching for products and services ‘near me,’ but by listening and responding to consumer feedback, larger brands can engage with customers on a local level – and stay competitive.
Online reviews have given smaller businesses a powerful tool to compete with much bigger brands. When it comes to online reviews, smaller businesses are outperforming the big chains – but it won’t be long before they start to take notice. With fewer locations and a more manageable volume of reviews, there’s no reason that independent businesses can’t maintain their lead. By making the most of the opportunity that online reviews present, responding meaningfully and providing great customer in-person experiences to begin with – smaller businesses can compete with bigger brands like never before.