6 Ways a Poor Star Rating Hurts Your Business

Poor Star Rating Hurts Your Business

Just like the report card we got in school that graded our academic performance, local businesses receive a report card of sorts that grades their online reputation. These grades come in the form of an average star rating. This rating is derived from customer reviews and is found on sites like Google, Facebook, Yelp and many others.

Ways a Poor Star Rating Hurts Your Business

Because average star ratings are shown prominently in local search results, it’s one of the first things a potential customer sees about your business. Therefore, it’s critical for you to make a good first impression here.

Obviously, a 4.5 to 5-star average rating is optimal, but anything less can have a negative impact on your business. While a low average star rating causes potential customers to buy elsewhere, it also can have negative effects in areas of your business you may not have thought of. Here are “5 Ways a Poor Star Rating Hurts Your Business”.

1. Lost Sales

Clearly, online customer feedback impacts a businesses’ bottom line. It’s simple: people want to do business with brands that receive high marks from their customers.

When a potential customer searches online for the products and services you provide (and they all are), they will see your average star rating and compare it to your competitors. A study has shown that negative reviews about your company can risk you losing 67% of potential customers. A low rating will cause customers to buy from someone else.

2. Lowers Employee Morale

If you have happy employees you will likely have happy customers. However, a quick way to bring down the morale of your staff is if the business has a poor average star rating. And, yes, your employees will find out this information.

Now, imagine how your employees would feel in this situation – knowing that their place of work is viewed negatively by their customers. How excited would they be to come to work every day? And, when they do, what would their interactions with customers look like?

Businesses need their staff to be positive and enthusiastic when dealing with customers. Because delivering exceptional customer experiences consistently is crucial to driving sales.

If you have unhappy employees, there’re not going to be at their best when it comes to engaging with customers. And, this will lead to a poor customer experience, more poor online reviews and an even lower average star rating.

3. Hurts Employee Recruitment

Getting the best applicants for open positions is a priority for any business. In today’s competitive job market, experienced candidates are choosier regarding the businesses they want to work for. And, a quick online search by these job hunters can eliminate your business from consideration if you are not careful.

Your brand’s reputation is an important factor in their decision-making process. For this reason, you need to make sure your average star ratings on Google and employment sites such as Glassdoor and Indeed are in good standing. Job searchers want to work for companies that are well-regarded by their customers and former employees. If your business has a low average star rating, they will likely pass on your job opening.

4. Detriment to Supplier Relations

Another way a poor star rating hurts your business is negatively impacting vendor relations. Your suppliers are a key lifeline for your business. Every business owner should strive to be a preferred client with their vendors. You want to get preferential treatment, uninterrupted support, high touch account management and consistent, on-time deliveries from them. Having a great reputation will make sure this happens.

However, a low average star rating online can negatively impact your relationships with suppliers. If they see that your online reputation is poor, you may lose favor in place of their other clients or they could see you as too risky from a contract standpoint. To make this a non-issue, monitor your reviews across the web and ask customers for reviews to help build a higher average star rating.

5. Lowers Business Resale Value

For many business owners, selling their business someday is an end goal. When that time comes, factors such as longevity, solid financials and future market potential all affect the value of a business. But don’t discount the impact your brand’s online reputation can have on valuation. You can be assured that potential suitors will be doing their due diligence before contacting you. Seeing a less than stellar average star rating online can cause potential buyers to not consider purchasing your business at all or offer a lower price for your business.

6. Reduced Number of Referrals

Having a healthy stream of referrals is an important objective for any business. Not only do referrals help grow revenue, they also reduce your client acquisition costs. The source of a majority of referrals come from other businesses – including clients, vendors and peers.

To get more referrals, businesses develop relationships with these lead sources. However, having a good relationship is just part of the equation. When a business gives a referral, their own reputation is at risk. Because of this, they will ensure that the business will provide a high level of service and care before they refer anyone to them. Having poor online reviews and a low average star rating can reduce or eliminate your chances of getting referrals.


No business wants a poor online reputation. Because of this, it’s important for business owners to keep track of key statistics that can greatly impact their bottom line. One of those is their average star rating derived from customer reviews. If you let these ratings drop, it can hurt sales and other key areas of your business.

Your average star rating is prominently displayed across the web. When people see your rating, they will form an impression about you. And, they will then use this information to decide whether to buy from, work for or otherwise do business with you.

To ensure businesses have the highest average star rating, they need to put their customers and employees first, deliver exceptional customer experiences and commit to making online reputation management a major part of their marketing efforts. Doing this will get you more customers and more sales.

Need help with building your brand’s online reputation? ReviewIgnite specializes in helping businesses leverage their online reputation to get more positive online reviews, attract more customers and grow sales. See our online reputation management software in action. Click the button below to watch a demo now!

Editors note: This post was originally published on July 27, 2020 and has been updated for accuracy and comprehensiveness.

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