How much does a Bad Review cost your business? 10000s of Dollars?

A bad review can be the deciding factor when potential customers are not sure if they want to buy from you or from a competitor. So it can cost you a lot.

Bear in mind that Google isn’t the only place your business can get reviewed, but it’s obviously a big player in that space, and is getting bigger. Facebook is getting in on the action as well, and there are dozens, if not hundreds of other Business Review sites out there. If you’re interacting with customers, it doesn’t matter what your business is about, it is now easier than ever for them to spread their opinion of you far and wide.

Not everyone is on board with that concept however, and a lot of tradesmen and women, and other business owners, are continuing to carry on with self-destructive habits that are leaving a trail of unsatisfied, and ultimately disappointed customers in their wake. And those customers are telling people.

One of the best advertisements of your business is the experience you leave the customer, and their willingness to tell other people about it. Word of Mouth advertising is free and incredibly effective. How many times have you asked a friend if they know a good tiler/carpenter/realtor? And when they give you a tip on one, what do you do? You just use them. And when they tell you to stay the Hell away from someone.

How much does a Bad Review cost your business?

The following are some easy habits to build into the way you run your business every day to ensure the customer experience is a positive one, and that when they tell their friends (or Google) about you, they are sending out the right message.

1. Keep Your Appointments

It’s highly unprofessional to continually re-make appointments. It doesn’t matter how polite you are on the phone, if you are ringing to reschedule a meeting (again) the client is not going to be happy, and they are going to form the impression that you are unreliable. If you make an appointment, stick to it. If you don’t think you can finish one job and get to the new one quite on time (by the way “on time” means ten minutes early – it always means that) then don’t make that appointment. A prospective client will tolerate you pushing an appointment back 30 minutes when you are making it, but they won’t tolerate you being 30 minutes late after the fact.

2. Stick to the Budget

There is no quicker way to earn a terrible review than going over budget. You will put the client in a difficult position, financially, but you will also appear incompetent at best, and untrustworthy at worst. None of those labels are good for business. Remember when you are setting the budget at the beginning of the contract that you are the expert, and you are meant to know what it’s going to cost. If the client’s budget is unworkable, tell them at the beginning, and compromise then. Don’t just go over budget like you’re going to be able to say, “But this is exactly what you wanted. I just couldn’t do it for the price I quoted.” That’s not going to play.

3. Keep up the Communication

Things may be going to happen on the project that are outside your ability to control. The weather might turn bad. One of your suppliers might go out of business. It could be any number of things. When this happens, the cost of the project is going to change, and as soon as you know this is happening, you need to get in touch with the client. They are not going to thank you later for hiding the truth from them. I think most people understand that unexpected costs may come up, and that’s why God created Contingency Allowances. But if you talk to the client as soon as you become aware of a change in the costs, you can compromise and adjust the rest of the project to accommodate that change. Or you get into a conversation and the client says, “That’s ok. I can cover that increase.”

4. Stay Reasonable Around Payment Terms

Depending on the size of the project, most clients will understand the need for milestone payments or deposits at contract commencement. They will understand that they can’t expect the contractor to carry the risk of payment through the entire project. But similarly, asking for too much capital up front is not going to be well received. This feeds off point 3. to a degree. Ultimately you need to be clear about where the payment milestones sit before you start working, and as the contractor, you will need to take a reasonable position, and spreads the risk between yourself and the client in a balanced fashion.

5. Pick Up After Yourself

Never, ever, leave a mess at the site when you leave. There is very little that is going to create an irate customer quicker than that. And that’s the stuff they will tell people about. Read some Google reviews of your competitors and see if this isn’t a common theme. The client is paying you as a professional, and they are going to expect you to act like one. That means leaving the worksite the way you found it. The job is not done until the site is clean.

6. Think in Their Shoes

There are a lot of things you do on a worksite because you always have. Ten years ago these things were probably fine and were almost expected by people in your trade. But if you take a moment now to think about those habits from the client’s perspective, are they still going to be acceptable? Do you park on their lawn? Do you use power-tools too early in the morning, or too late at night? Do you fail to inform the client about impending deliveries that might cause some inconvenience? Do you keep the client informed of your progress and schedule? How hard is that? You’re packing up to leave at the end of the day, take five minutes to knock on the door and say, “We’ve finished framing up today, but we’re expecting a delivery of timber early tomorrow, and that might block off your driveway for 30 minutes while we unload. Might be worth parking your car on the road tonight to make sure you don’t get trapped.”

The cost of a bad review for your business can vary greatly depending on several factors, but it can be significant. Here’s a breakdown of some ways bad reviews can impact your bottom line:

Direct Revenue Loss:

• Lost sales: Studies show that up to 90% of consumers say they consult online reviews before making a purchase. A bad review can deter potential customers and lead to missed sales.
• Returns and refunds: Negative reviews can also lead to customers returning purchased products or requesting refunds, further eroding your revenue.
• Reduced customer lifetime value: Dissatisfied customers are less likely to return and become loyal patrons. Bad reviews can damage your brand reputation and decrease customer loyalty, resulting in lost repeat business.

Indirect Costs:

• Damage to brand reputation: Negative reviews can tarnish your brand image, making it difficult to attract new customers and retain existing ones. This can lead to increased marketing and PR costs to repair the damage.
• Reduced employee morale: Negative reviews can also demotivate your employees, impacting their productivity and customer service.
• Crisis management: Addressing negative reviews publicly and professionally requires time and resources, diverting your attention from core business activities.

Quantifying the cost:

While it’s impossible to pinpoint an exact cost for a single negative review, some studies offer estimates:

• Steritech, an auditing and brand protection service, estimates that bad reviews translate to a whopping $200 billion in yearly losses for retail businesses.
• A study by BrightLocal found that a single one-star review can cost a business up to $3,000 in lost revenue over 12 months.

Additional factors to consider:

• Industry and target audience: The impact of a negative review will be greater for businesses in industries where trust and reputation are critical, such as healthcare or hospitality.
• Platform and reach: A negative review on a high-traffic platform like Google or Yelp can have a much wider reach and impact than one on a smaller platform.
• Nature of the review: Reviews that address specific issues with the product or service tend to be more impactful than those that are personal attacks or rants.

How to minimize the impact of bad reviews:

• Respond promptly and professionally: Address negative reviews publicly and show that you care about customer feedback.
• Resolve the issue: Take steps to rectify the situation and offer solutions to the reviewer.
• Encourage positive reviews: Actively solicit positive reviews from satisfied customers to balance out the negativity.
• Monitor and track reviews: Regularly monitor online review platforms and address any emerging issues promptly.

Each of these little tips is not much more than common sense and courtesy, but how many of them are you practicing in your daily routine? Set yourself a goal of incorporating these standards into your work routine and the reviews that get posted to Google about you will be positive, and people will tell their friends.