Bad online reviews are costing UK firms £125k each year

Surveys | Technology

More than half (56%) of British companies selling online have been the victims of negative reviews and star ratings in the last year, and the cost of managing the online flack is rising.

The problem is now costing online brands an average of £125k a year to put right, a new study reveals, as Brits increasingly become a nation of online moaners.

A third of shoppers have left a negative review online, with seven in 10 having done so in the last year, as Brits take to social media or online review sites like Trustpilot or Yelp to share their anger or dissatisfaction.

In a poll of 1,000 decision-makers (and 2,000 shoppers), 29% said poor reviews are getting worse – and four in 10 (42%) business owners remain flummoxed by them – admitting they don’t know how to tackle the negative online reviews that they do receive.

Most business owners – 76% – said online reviews and star ratings are very important to their financial status and reputation, and one in five agreed that a single one-star negative post could severely damage their business.

The research was undertaken by Brightpearl, a retail operations platform, which found that 46% of respondents regularly check star ratings for online retailers before buying from them, and two in five consumers have been put off a brand or a retailer they might have shopped with – by a single unfavourable review.

UK online brands are now spending significant sums of money each year responding to and managing negative reviews – on average £125k is spent yearly, whether through in-house social media managers, reputational agencies, or on promoting positive endorsements.

The study also reveals that just 23% of brands always respond to negative reviews – despite the majority of shoppers (58%) looking more favourably upon retailers who actively respond to negative reviews posted about their services online.

Nick Shaw, Chief Revenue Officer for Brightpearl, said: “Reviews – whether they are positive or negative – can make a huge difference to the choices consumers make when it comes to selecting a brand or retailer. It’s absolutely right that consumers should have a moan when they receive sub-par service – and brands need to start paying closer attention.”

On average, Brits want a brand or retailer to have a whopping 30 positive online reviews before they’d trust it enough to part with their cash. Shoppers become highly dubious about shopping with any brand that has more than five negative reviews in a six month period.

“Retailers are increasingly aware of the wide-ranging financial and reputational impact a negative review can have on their business”, adds Shaw, “But they need to understand where those problems are coming from – be that items not arriving on time or at all, a lack of delivery updates or cancelled purchases.

“Customers pay attention to middling and lower reviews, resulting in lost sales opportunities and potentially damaged reputation. Rather than spending hundreds of thousands of pounds a year to fix poor reviews after the fact, the best approach is to identify and fix the issues that can lead to unhappy shopping experiences in the first place – and those problems typically occur after the buy button.”

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