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5 Ways a Poor Star Rating Hurts Your Business

Poor Star Rating Hurts Your Business

Just like a report card from school graded your academic performance, local businesses receive ratings from customers that grade their online reputation. For businesses, it’s their average star rating, derived from customer reviews, 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

This first one should be obvious. Clearly, online customer feedback impacts your businesses’ sales. And yes, a poor average star rating leads to lost sales. It’s simple: people want to do business with brands that receive high marks from their customers. A study has shown that negative reviews about your company can risk you losing 67% of potential customers.

If a potential customer is searching for the products and services you provide (and they all are), part of this process is comparing your average star rating to your competitors. A low rating will cause customers to buy from someone else.

2. Lowers Employee Morale

Having happy employees is very important to any business. And a quick way to bring down the morale of your staff is having a poor average star rating resulting from negative customer reviews.

Just imagine how your employees would feel in this situation – knowing that their place of employment 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. This will lead to poor customer experience, more poor online reviews and an even lower average star rating.

3. Hurts Employee Recruitment

Every business wants the best candidates when hiring new employees. In today’s competitive job market, experienced candidates are choosier regarding the businesses they want to work for. And a quick online search can eliminate your business from consideration if you are not careful.

They will be evaluating you as much as you are evaluating them. So, you can be sure that they will be researching potential places of work to make certain they land with the right company. As a business owner, you need to make sure your average star ratings on Google and employment sites like Glassdoor and Indeed are in good standing. If your business has a low average star rating, they will likely pass on your open position.

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.

Conclusion

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.

These ratings are prominently displayed on sites like Google, Yelp and Facebook. And when people see your average star rating, they will form an impression about you. 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!

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