Online reviews can increase business revenues by 40%

Online reviews are having a significant impact on the bottom line for businesses

It’s no surprise that online reviews are having a significant impact on customer service, and ultimately the bottom line for businesses. The British Retail Consortium (BRC)  said December 2013 was a record-breaking month for online shopping, with close to one in five of all non-food purchases made online. The report also found a 19.2 per cent growth in internet purchases compared with the same month in 2012, the fastest increase in four years.


As Nielsen’s Global Trust in Advertising report demonstrated, opinions posted by consumers online (both good and bad) are the most trusted form of advertising today. But how do we quantify this impact and better understand its value to the growing ecommerce economy?


At Trustpilot we wanted to investigate this further, so we partnered with renowned Cambridge University mathematician William Hartston, to develop a formula to calculate the economic impact of online reviews on UK businesses (see notes below). This was supplemented by a survey of over 2,000 UK consumers.


According to the formula, which takes into account the number of positive and negative reviews received by the average UK business, online reviews can increase business revenues by up to 40 per cent – a significant figure.


The consumer research also revealed some interesting insights into online shopping behaviour. A key finding is that 77 per cent of UK consumers using the internet will look towards online reviews before making their purchasing decision. British consumers are leaving their shopping fate in the hands of online reviewers, with 62 per cent claiming they’re more likely to do business with a company after reading a positive review and one in five spending at least 10 per cent more with that same company.


In contrast, the survey reveals that almost all British consumers (89 per cent) are influenced by negative reviews, with 78 per cent claiming it could deter them from making a purchase altogether. For those businesses looking to cash in from the growth in ecommerce, it takes on average just 3-4 online negative reviews before consumers (38 per cent) stop purchasing from a brand.


Retailers hesitant to find out what their customers will say should be not put off however, as the survey reiterated that it’s equally important for a company to respond to criticism - 15 per cent say they are actually more likely to do business with a company after reading a response to a negative review that was resolved.


We find that many retailers are reluctant to ask for reviews as they’re worried about what their customers might say, but the reality is that most serve a raft of satisfied customers. People accept that brands aren’t perfect, so negative reviews are to be expected – the acid test is how you handle them. To find out more about how to turn negative reviews into customers, check this post out.


These results are a sure sign that the old days of broadcasting engineered marketing messages at consumers doesn’t work. Today’s consumers believe in their fellow buyers and have the power – because of social media – to make or break a business. Our research highlights the significant impact that online reviews are having on purchasing decisions, and ultimately to the British economy, showing that customer service has to be an absolute priority for any business.


The fact that two in five have never written an online review, yet 77 per cent say online reviews help them make a purchasing decision shows that we need to encourage more people to share in their experiences, whether good or bad.


Consumers today have such a powerful voice to influence others online, so businesses need to encourage a two way conversation with their customers or they will be left behind. When a purchase decision comes down to a company with no reviews versus one with hundreds of people praising the customer service, it’s clear who will win – and this is a model that will only become more and more prevalent in the future.




The survey was conducted in partnership with CensusWide of 2,000 adults throughout the UK who have made Internet purchases in the past year.


William Hartston has developed the online review formula:

V = 7.9 (.62P -.17N²+ .15R)


This gives V, which is the predicted percentage increase in revenue due to online reviews in terms of:


P = number of positive reviews

N = number of negative reviews

R = Number of satisfactorily resolved negative reviews

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