Cofounder and CEO of PissedConsumer, a review platform that helps consumers be heard and brands improve their customer service processes.
As someone who has worked in customer service for more than 20 years, I’m well aware of the impact online reviews can have on a business. Positive reviews can serve as free marketing for a brand, attracting new customers and developing trust. Conversely, negative reviews, if not addressed promptly and properly, can seriously damage your company’s reputation and prospects.
In my experience, it’s crucial for businesses to monitor and manage online reviews across Google, Facebook and online review platforms. Online research is now a staple of the customer journey. In fact, according to a survey by my company, PissedConsumer, as much as 84% of consumers refer to online reviews before parting with their money. Now that review sites have such an impact on consumer purchasing decisions, brands must understand the financial consequences of bad feedback and how to calculate them.
Do negative reviews turn customers away?
Setting eyes upon a poor review is more than likely to put a potential customer off, that’s a given. But how likely?
Let’s use a real-world example to illustrate what the impact would be on income. Visualize a local furniture store receiving several negative online reviews that 200 potential customers see over the next year.
If, based on the given statistics, we assume that negative reviews can deter 80% of viewers, that’s a loss of 160 potential sales. If an average sale, for example, is valued at $500, then the annual cost to the business would be $80,000—a considerable loss.
The damage of negative reviews: Quantifying the costs
If you want to estimate the overall financial impact to your business that negative feedback would bring about, there are steps you can take using commonly available tools.
First, analyze the search keywords most relevant to your area of business. Useful online tools such as Google AdWords Keyword Planner, SEMrush, Google Analytics, etc. can help bring to light the search terms that attract the greatest volume of traffic to your site.
Check brand-related phrases along with relevant verbs, such as “[Company Name] reviews” or “[Company Name] complaints.” The keywords or phrases that return the highest conversion rates can then be identified using Google Analytics.
Then note any negative reviews ranked above you on the first two pages of search results for those keywords (there’s no need to go further than this, as only 0.63% click on the second page of Google search results).
Use keyword traffic data from AdWords and estimate your revenue per visit based on current rankings and analytics data. Then compare your traffic share and estimated revenue from your website’s ranking to the traffic share and revenues of the higher positions held by negative reviews of your business.
Let’s assume that your company website holds the fifth position on the first page, and a negative review about your company published on one of the online review platforms is in the third position on the first page.
The third position typically receives 11.4% of keyword traffic, whereas the fifth position receives 6.1%.
If a negative review holds the third spot with 1,000 monthly searches, it could, therefore, be expected to receive 114 visits, with the fifth position getting 61 visits.
Higher position traffic (114 visits) – your position traffic (61 visits) = 53 additional visits per month for the higher position.
Estimating $5 revenue per visit based on your analytics, 53 additional visits x $5 revenue is $265 estimated lost monthly revenue.
The $265 difference quantifies the minimum recurring monthly cost of the negative review outranking your website.
It’s also important to consider the long-term impacts of online reviews on brand reputation in the analysis because that may, over time, multiply the financial effects of negative reviews.
Turning the situation around with good customer service
As these kinds of calculations show, even a single poor review demands timely action. However, addressing complaints constructively can work in a company’s favor. Even after negative reviews, customers are willing to give a brand another chance if the issue that led to the bad feedback gets resolved satisfactorily. A good customer service experience will bring people back.
Promptness pays off
The majority of negative reviewers will first try to contact a company directly to resolve their issue before resorting to posting a public complaint. Make your support easily reachable. For instance, many businesses today use AI-powered chatbots to enhance customer service and ensure that issues are sorted out quickly and efficiently. Respond to all feedback, whether positive or negative, in a timely manner. Unaddressed complaints reflect poorly on your business and online reputation.
Review monitoring
Staying on top of online criticism needs to be a priority, so it’s critical to have a review management system in place to monitor all major review sites like Google, Facebook and industry-specific platforms relevant to your business. Set up Google alerts for your business name and brand keywords to catch any feedback as soon as it appears online or use specifically tailored review platforms that help track customers’ sentiment.
Acknowledge fault and make up for it
If a negative review can’t be avoided, look at actions you can take to remedy the issue. Respond humbly, express empathy and understanding and, if appropriate, offer a discount or refund. Thank repeat customers publicly to showcase your commitment to good customer service.
Authenticity is valuable currency with today’s consumers. Acknowledge both praise and criticism with equal sincerity. The financial costs of complaints can be significant, but with good customer service, they can be mitigated and even withdrawn.
Only by truly listening to feedback, admitting faults and taking corrective action—not just when things go wrong but at all times—can we earn loyalty and build brands that stand the test of time.
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