The power of social media is truly astounding but we often hear that it’s difficult to measure its effect to a business’s bottom line. Well last week economists at the University of California, Berkeley released a study that quantified the impact of positive reviews for restaurants.
According to the study, restaurants with higher reviews on Yelp are fully booked about 50% of the time where as those with lower ratings maintains just a 33% reservation rate. That is not unexpected but what was most interesting about their findings is for restaurant’s whose ratings increased by just a half star, business during peak hours jumped up by 19% on average.
Think about that for a moment. Most local businesses don’t have hundreds of reviews on Yelp unless they are one of the most popular destinations in their city. So the difference in sales going up or down significantly could literally rely on what one or two customers thinks about your business.
That’s a scary proposition for many entrepreneurs but one they have to deal with nonetheless.
In June of this year as we were preparing to launch our local gift card product, we held several focus groups with small business owners in the Pittsburgh area. It was interesting to hear from many local restaurant entrepreneurs that they were tired of dealing with local review sites and social media.
Out of the dozens of business owners we’ve met with around 10% did little to nothing to manage their online image, 70% kept up to date but were more reactive, and the remaining 20% embraced social media and had a proactive approach. The roughly 80% who were not doing all they can to grow their brand online sited lack of time or understanding of how to do so.
As the Yelp study highlights social media can increase your business. So entrepreneurs need to stop looking at it like a necessary evil and embrace it as part of their marketing strategy.
Negative reviews are going to happen. That’s why it’s important to be proactive and engage with your regular customers online for positive comments so when the occasional poor review comes in, it doesn’t have as much impact on your overall image.
Here are three simple steps to help manage your online image:
The best part about social media the various review sites is that they are free (minus your time). If you don’t have the time or knowledge to dive into this, I’ll bet you have a number of employees who are in touch with all of this and would be happy to spend a couple hours during their work week to help out.