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Updated Oct 30, 2023

How Much Can a Bad Review Hurt Your Business?

Positive customer reviews can build your business, and negative consumer stories can break it. How much can a bad review hurt you?

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Jennifer Dublino, Senior Writer & Expert on Business Operations
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Table of Contents

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Most businesses care about their online reviews, and for good reason. Positive reviews can encourage prospective customers to try your services or products and can answer questions or doubts that they have about your company. But it is inevitable that you will get a bad review at some point. How much damage can it do?

Some business owners seem to believe that any bad review is a personal reflection on the quality of their business and customer service. Others argue passionately that there is no such thing as bad press and that they don’t worry about bad reviews because they don’t hurt their reputation.

Can bad reviews hurt your business? Here are some things for owners to consider.

Does a single bad review hurt?

According to a 2023 study by Brightlocal, somewhere between 98 percent of consumers read online reviews at least “occasionally,” and 76 percent “always” or “regularly” read them when researching local businesses. 

It might seem then that any bad reviews would impact your sales in a negative way. After all, having a bad review shows that your company isn’t perfect, right? But this is not always a deal breaker. Consumers tend to give reviews more weight when the product they are shopping for is expensive or has higher stakes, such as something that impacts personal safety or health.

How do bad reviews actually help?

The truth is that any sensible customer knows that products, services, companies and entrepreneurs aren’t perfect. Instead of showing that customers choose to buy products or patronize businesses that have only stellar reviews, review of the available research shows that customers have more trust in companies that have a few bad reviews. Why is that?

They make the company look trustworthy.

Psychologically, since customers assume that nothing is perfect, a total lack of negative reviews means that companies are either burying the negative (not a good sign) or the reviews are not legit, which actually is worse than a few complaints. In fact, prospective customers are more likely to buy from you when the average rating is between 4.2 stars and 4.5 stars, according to research from Northwestern University. Once it gets higher than that, customer skepticism kicks in and purchase intention drops.

FYIDid you know
Consumers crave transparency and suspect that a review may be fake when it is just a star rating with no words (47 percent), when it is over the top in its praise (40 percent) and when it is over the top in its negativity (32 percent), according to Brightlocal.

They provoke empathy.

Most people assume that there will be some people who will never be satisfied, no matter how hard a company tries. Everyone has seen this sort of situation at some point, and it can make a customer or potential customer empathize with the business owner and want to give them the benefit of the doubt.

They give the company the opportunity to show concern about customer satisfaction.

If the business responds to the negative reviews to try to resolve the situation, this shows potential customers that the company cares about its clients and is putting effort into making them satisfied. It also demonstrates that the company cares about its reputation and is responsive.

Did You Know?Did you know
The top review factor that influences consumers to use a business is when the owner responds to all reviews, with 88 percent saying they would be more likely to use that business, reported Brightlocal.

What should you do about bad reviews?

Good customer stories can build your business, but too many negative reports from patrons can break it. So what should you do when your company or product inevitably gets some bad reviews?

Always respond publicly to all reviews, both positive and negative. 

For negative reviews, respond to the customer on the same platform where the review was left. Apologize for their experience, and offer them a gift card or a refund so that they can return at a later date and hopefully get a better impression. 

If they are still upset, extend an invitation to call or email and speak to you directly about what happened. Your goal is to get the conversation offline so that you and the customer can speak freely. Once you’re talking to them, listen to their concerns and make notes; some of them may be valid and need to be addressed. 

>> Learn more: The 7 Most Effective Ways to Manage Your Online Reputation

Look for patterns. 

If you find that customers who come into your restaurant at dinner are having a markedly different experience than those who come in at lunchtime, it’s worth looking into your staff to see what might be the problem. If you discover that all of your products are performing beautifully but there’s a regular complaint about one function or detail, test it out to see what could be improved. 

Likewise, if you see a trend of negative feedback over time, you will need to find and eliminate the problem by firing or disciplining an employee, improving product quality, or providing better training. 

Once you have resolved the issue, you can go back on the review platform and let the customer(s) who complained know that you are grateful for their feedback and that you have taken action to address the problem. Invite them to come back and try you again.

Let your customers know how much reviews matter. 

Suggest that they leave reviews on the sites that matter most to you, such as Facebook, Amazon and Yelp, and consider offering an incentive to customers who do choose to leave a review, whether it is positive or negative.

Don’t worry. 

One or two bad reviews aren’t going to tank your business. Focus on fixing what went wrong and collecting more positive reviews.

TipBottom line
Ask customers for reviews in person, during checkout or in an email. These are the methods most likely to result in a customer leaving a review.

When should you be concerned?

There are of course a few situations where you should be concerned about bad reviews.

Serious accusations.

If a customer alleges sexual or racial harassment of any kind, your goal as a business owner must be to immediately address what happened with your associates. You should reach out to the customer and get as much of their story as possible, showing them that you’re serious about their complaint and want to make it right.

If you can pinpoint the issue to a particular employee, immediately meet with that individual to make it clear that this behavior will not be tolerated. It’s not a bad idea to ask the employee to apologize (in a supervised manner) to the customer who issued the complaint.

If a customer alleges employee theft, you similarly should follow up immediately.

Defamatory language.

What if you feel a review is defamatory? For example, the customer calls all of your employees idiots or insults them on racial or sexual grounds or engages in libel, actively making untrue statements about your business as if they were facts. Most review sites have opportunities for you to either respond to the complaint or flag it to request removal. Be careful with your language here; be polite and stick to the facts.

For example, you might say, “Thank you so much for taking the time to leave a review regarding your experience. However, I noted that you said you were at our store Monday morning, and if you look at our schedule, you can see that we are closed until 2 p.m. every day. Is it possible this was for another business?” But avoid insulting the reviewer or demanding that they take the review down; that language won’t get you anywhere.

If you have serious concerns about a review, you might want to consult with a lawyer. Otherwise, except the most inflammatory reviews, just let it go, with the knowledge that the reviewer may have actually just given your business a boost.

Lots of your recent reviews are negative.

While a prospective customer can overlook a few bad reviews, if a significant number of your recent reviews are one or two stars, you need to react and fix the situation. First, take corrective action in regard to the issue that people are complaining about. After that, you can work on the perception by letting customers know about your solution, soliciting new positive reviews and, in the worst cases, engaging the best online reputation management company.

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Jennifer Dublino, Senior Writer & Expert on Business Operations
Jennifer Dublino is an experienced entrepreneur and astute marketing strategist. With over three decades of industry experience, she has been a guiding force for many businesses, offering invaluable expertise in market research, strategic planning, budget allocation, lead generation and beyond. Earlier in her career, Dublino established, nurtured and successfully sold her own marketing firm. Dublino, who has a bachelor's degree in business administration and an MBA in marketing and finance, also served as the chief operating officer of the Scent Marketing Institute, showcasing her ability to navigate diverse sectors within the marketing landscape. Over the years, Dublino has amassed a comprehensive understanding of business operations across a wide array of areas, ranging from credit card processing to compensation management. Her insights and expertise have earned her recognition, with her contributions quoted in reputable publications such as Reuters, Adweek, AdAge and others.
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