Its common sense and something every restaurant owner knows, a good review can increase sales and table bookings and bad one can quickly lead to ruin. But the vast majority of restaurateurs do nothing to encourage positive reviews or to deal with negative reviews.
In an age where everyone is a critic thanks to websites such as Tripadvisor, Yelp or Qype or indeed anyone with a blog, having a good star rating and a clean online reputation has never been as important.
Two economists at the University of California, Berkeley, Professors Michael Anderson and Jeremy Magruder, have published in this month’s edition of the Economic Journal, work that represents the first attempt to gauge the relationship between online star ratings and customers’ purchasing decisions.
Focussing on the effects of positive ratings of 300 restaurants, they proved what was already long suspected that a restaurant with a rating that improved by just half a star – on a scale of 1 to 5 – was much more likely to be full at peak dining times.
In fact the extra half star rating caused a restaurant’s 7pm bookings to sell out on from 30% to 49% of the evenings it was open for business.
This increase in trade was confirmed to be solely down to the increase in star rating without any changes to staff, quality of food or price.
The economists note that, when review sites compute a business’s average rating (which ranges from 1 to 5 stars), it rounds off to the nearest half-star.
So, two restaurants that have similar average ratings can actually appear to be of very different quality to online viewers. For example, a restaurant with an average rating of 3.74 displays a 3.5-star average rating, while a restaurant with an average rating of 3.76 displays a 4-star average rating.
This, the economists claim, allows them to make important comparisons between restaurants that have different ratings – for example, 4 stars versus 3.5 stars – but are of nearly identical quality (for example, a 3.76 average versus a 3.74 average). Their conclusion? That half a star makes all the difference. The pair conclude that changes in consumer preferences “occur even though restaurant quality is held constant. This study demonstrates that these reviews have become a salient factor in consumer decisions.”
Significantly, they found that the effect was even more profound when alternative information was hard to come by, opening up the possibility that invented reviews could boost fortunes.
The pair write: “These returns suggest that restaurateurs face incentives to leave fake reviews.”
At Got Juice we have seen this happen on both sides and have had to clear up the mess. Its worth noting here that the practice of leaving fake reviews is illegal and you should never leave a fake positive or negative review under any circumstance, if caught the mud from these actions will stick for a long time and we can assure you that no one wants to deal with a fraudulent company.
If your business wants to encourage natural reviews or has a negative review problem, we can help. Just enquire about our review platform, its proven to get long lasting, quick natural results.
What ever you do. DO NOT create fake reviews.