"I don't care about what people say about my business online."
Those are the exact words of one small business owner during a one-on-one consultation of his business. He just didn't believe that a single review could have a noticeable impact on his bottom line.
But why SHOULD he care? Let's do a little bit of math.
In this case, the owner had a one-star review on the review website Yelp.com. Yelp has buttons below each review that shows when people find a review useful, funny, or cool. In total, 64 people clicked the "useful" button indicating that they read the review and it helped them make a decision whether or not to visit this small business.
Here's an example of what it looks like on Yelp:
On the original business owner’s page, a total of 64 people clicked the “useful” button indicating that they read the review and it helped them make a decision whether or not to visit this small business. That’s AT LEAST 64 people who found the review useful, because some customers may have read the review and not clicked that button.
Just to be safe we will assume that the bare minimum, 64 people, were turned away from this business by the negative review.
After talking more with the business owner, we learned that his average ticket price is $450 and the average customer visits his shop about twice per year. So, each customer is worth about $900 a year.
64 (customers lost) x $900 (yearly value of customer) = $57,600 (lost revenue in one year)
But let's dive into the numbers even more. Looking a little further into his business, most of his loyal customers have been frequenting his business for at least 3 years.
$57,600 (lost revenue in one year) x 3 (average customer relationship in years) = $172,800 (lost lifetime revenue)
Is negligence really worth the risk when it could cost you $172,800 in future revenue?
Imagine if this business owner would have taken the time to respond to the negative comment instead of ignoring it. The unhappy customer could have turned into a lifelong advocate for his business. At the very least, other prospective customers would have seen that the business cares enough to take care of customer complaints and concerns.
This is why it’s so important for business owners to understand the importance and impact negative online feedback can have on their bottom line. It could cost you a lot of money in the long run.
So, do you care about what people are saying about your business online?
If you do, fill out the form below and one of our social media experts will walk you through your online presence and show you how you can improve it.