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Why Customer Ratings and Reviews Matter

  • by: Allen Graves
  • On: 2, Sep 2020
7 min read

Restaurant and retail marketing is truly complex. It is driven by seemingly countless digital marketing channels and even more tactics and strategies.

And then there are the offline campaigns – radio, television, proximity and WiFi marketing.

There’s certainly a lot going on, and marketing professionals are constantly under the gun to keep their advertising costs at a minimum.

In the midst of this marketing mayhem, there’s one often overlooked channel that can provide a huge bang for your buck, and restaurateurs may not be using to its full advantage - customer ratings sites.

Customer ratings and reviews can literally make or break your restaurant business. 

If you’re not paying attention to your online ratings and reviews, or you’re not working to improve them, you’re leaving money on the table. 

Why Are Customer Ratings Important

More and more, consumers are turning to the internet to help them make their dining decisions.

Ratings websites like Yelp, TripAdvisor, and Google receive millions upon millions of visitors every single day, and these sites can be one your restaurant’s most powerful and relatively inexpensive marketing commodities.

Obviously, positive reviews are a great thing, while negative customer reviews are somewhat of a bad thing.

The more positive ratings you receive, the more consumers will trust that they will have a pleasurable experience at your establishment.

But the truth comes in the research that has been done around these ratings sites and the potential effects that restaurant ratings have on your overall bottom line.

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Positive Customer Ratings Improve Foot Traffic

A study performed by Michael Anderson and Jeremy Magruder, professors at the University of California, Berkeley, concluded that positive reviews have a direct correlation to increases in foot traffic during peak times.

They found that a ½-star rating increase resulted in a 30-40 percent increase in the number of 7pm bookings.

Based on this study, although online rating websites may not generate attributable financial returns, they can certainly play a role in your restaurant’s success, driving more foot traffic and overall revenue.

At your next lunch or dinner peak time, think about what a 30-40 percent increase in bookings would look like at your restaurant.

Positive Customer Ratings Increase Revenue

Why Ratings MatterAnother study conducted by Professor Michael Luca at the Harvard Business School, sought a correlation between online ratings and actual revenue.

The study found that a rating improvement of one star led to an increase in revenue of between 5 and 9 percent.

Interestingly, Luca also found that the star rating of restaurants played a much higher role in consumer decision-making, finding that website visitors were often overwhelmed by the number of written reviews.

Luca concluded, “Online consumer review websites improve the information available about product quality. The impact of this information is larger for products of relatively unknown quality…On the consumer side, simplifying heuristics and signals of reviewer quality seem to increase the impact of quality information.”

Why Customer Ratings and Reviews Matter

There are many more studies about the effects of positive customer ratings and reviews.

In 2017, websitebuilder.org collected data and statistics about the effects of good and bad user reviews.

As you read through the statistics below, think about current foot traffic and revenue at your establishment and you’ll further realize how important and valuable positive user ratings can be.

Among the data, here are some interesting facts they found:

  • 72% of consumers say that positive reviews make them trust a local business more.
  • 61% of consumers have read online restaurant reviews, more than any other type of business.
  • 53% of 18-to-34-year-olds report that online reviews factor into their dining decisions, as do 47% of frequent full-service customers.
  • 34% of diners choose a restaurant based on information provided on a peer review website.
  • Consumers are likely to spend 31% more on a business with excellent reviews.

It’s plain to see that receiving more and better customer ratings is key to growing your customer base, increasing revenue, and driving down costs – and this is expected to remain the case for quite some time.

Therefore, you should be doing everything you can and being proactive in improving your ratings across all the major review sites.

Ask for Customer Ratings and Reviews

This includes leveraging your customer WiFi access to ask for a rating after a customer visits your establishment.

If the rating is good, you can send them a convenient link to the ratings website of your choice.

If the rating is bad, you can apologize, offer to resolve any issues, and give them an incentive to come back and re-rate your restaurant.

Click here to see how Bloom intelligence can automate that process for you. Look for the Ratings Feedback Loop section.

There will always be the occasional poor review, that’s just the nature of the internet. Remember that dealing with poor customer reviews the right way can actually have a positive impact on business.

At the end of the day, you should always be doing your best to provide quality service, excellent food and drink, and the best atmosphere possible.

If you do that, good ratings and reviews will naturally follow.

This will turn your restaurant’s pages on the ratings websites into a revenue generator, and one of the most powerful marketing tools in your arsenal.

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