Staying one step ahead of competitors is the goal of every business. Doing so can increase market share, improve brand reputation, strengthen customer loyalty and retention rates, and ultimately boost revenue.
There are hundreds of ways to overtake and get the edge over your competitors, with opportunities hidden across your business at every customer touchpoint.
In this article, we focus on an often-overlooked source of competitive advantage – your customer reviews. We’ll be diving into what makes them so beneficial to your business, the different types of customer reviews, and important statistics you should know about.
Customer reviews are the pieces of feedback left by your customers about your business. They can be collected for your products or services, customer service and support, delivery, website, operations and processes, and any other element of your business that your customers might come into contact with.
Don't assume that reviews are just for the big-ticket experiences, like how your product performs or how good your returns process is. Any interactions that your customers have, however small, can lead to a positive or negative review.
There are two key types of customer reviews: organic, in-the-moment reviews and 'invite-only' reviews.
In-the-moment reviews are pieces of feedback that your customer leaves immediately after an experience or interaction, capturing their real-time reaction within that moment.
If you collect reviews on your website, you might find this kind of review there. You can also find these reviews on your social media channels and on third-party review websites like TripAdvisor, Trustpilot, or Influenster. These reviews tend to be 'open' reviews, meaning they don't require any verification that they are genuine or from real customers.
'Invite-only' reviews are more likely to be verified, as only those who have had a genuine interaction with your business are invited to leave feedback. This means anyone that reads the feedback can be sure it's 100% authentic.
They are also much easier to manage from a customer service and business perspective because you can quickly locate the reviewer in your customer relationship management (CRM) system and see their history with your company if any action is required.
To understand more about the different types of reviews, read our guide to open vs invite-only reviews here.
At their core, customer reviews are crucial to understanding the individual experiences of your customers. These experiences can then help to isolate what’s working, or not working, with your business at a higher level.
A few other key reasons why customer reviews are important are:
Learn more about how your business can use customer feedback to its advantage by heading to our complete guide to customer reviews.
Now that we’ve established the different types of reviews and their benefits, let’s look at the numbers. Understanding the effect that customer reviews can have on your business will give you a significant edge over your biggest competitors.
It's clear from the statistics above that customer reviews can have a tangible effect on your business performance. In the simplest terms: more positive reviews and a better response to customer feedback can equal increased customer acquisition and loyalty.
As you prepare to start collecting customer reviews, go back to the very beginning of your customer's experience with your company. By providing fantastic service and high-quality products, you're already on the right track to earning positive reviews.
Here are some of the easiest ways to ensure you're organically generating great reviews from happy customers.
Your customers spend their time researching your business, using your website, interacting on social media, engaging with your content, and finally, committing to exchange their hard-earned money for your products or services.
They will have opinions and valuable feedback to share at every point of that journey, and by talking to them at each stage, you will build strong relationships that make them feel valued and listened to. Customers who feel heard and are included in the evolution of your company as it grows are more likely to give you fantastic reviews and feedback!
There are plenty of ways to let your customers know how much you appreciate their decision to use your company instead of a competitor. Not only will these special touches help to create happy, loyal customers, but they can also translate into positive reviews. Think about the end-to-end experience your customers have with your business and identify areas where you can go the extra mile.
Here are some ideas to get started:
You can then supplement your organic positive reviews by reaching out to your customers and requesting their reviews and feedback. This can be by email, over the phone, or even face-to-face.
It's all too easy to treat collecting and responding to customer reviews as a tick-box exercise and forget to measure their impact on your business. In theory, the more great reviews you get, the more improvement you'll see in key metrics.
Understanding how you perform in your chosen metrics is crucial before you start measuring so you have something to benchmark and check your progress against. Here are some metrics we recommend tracking as key performance indicators:
Your customer acquisition cost (CAC) is how much you spend across your whole business on acquiring customers, divided by the number of customers you acquire.
For example: if you spend £10,000 and generate 5,000 new customers, your customer acquisition cost is £2.
As you start to generate more positive reviews and increase your response rate to negative ones, you should find that more and more people are attracted to your business and it becomes easier to convert prospects into customers. This higher conversion rate will translate into a lower customer acquisition cost.
Your customer churn rate is the rate at which customers stop using your company's product or service within a specific time frame.
Collecting customer reviews is a great way of highlighting trends or themes that are causing your customers frustration or dissatisfaction. Not only will collecting these reviews allow you to fix each individual's grievance so you can retain their business, but it will also help you fix the bigger issues that are driving your customers away.
Brands around the world use Net Promoter Score to measure loyalty by asking their customers how likely they are to recommend their business to their friends and family.
As you invest time and resources into collecting and managing customer reviews, you should see an improvement in your NPS score. This is because your customers will see and appreciate your commitment to speaking to them, listening to their feedback, solving their problems, and using their input to make your business better.
The customer review statistics included in this article speak for themselves. Consumers expect brands to have plenty of reviews for their products or service, with timely responses visible. Businesses that fail to meet this expectation risk losing potential or existing customers. Or, they might unintentionally create animosity towards customers who do leave a review but never hear back.
So, if you’re not yet collecting customer reviews for your business, how can you get started?
You don't have to worry about managing your customer review project alone – here at Feefo, we make collecting and managing customer feedback easy. We can also provide you with the tools you need to start building your reputation with new, prospective customers, while also taking feedback from your existing customers. Get in touch with our friendly team today to learn more about how reviews can boost your business.
