PinMeTo - Online reviews pt. 3 - The mystery behind Star Ratings

Star Ratings - There’s a sweet spot for revenue, and it’s not 5 stars

Yes, you read that correctly: you don’t want a 5 star average. Ironically, or maybe not depending on how skeptical you are, the optimal star rating for companies is between 3.5 and 4.5 stars. While low scores are as damaging as you might suspect, having a 5 star average creates a “too good to be true” vibe that turns customers off. See image below.

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Womply’s study, they examined this surprising result and offered some potential explanations. They stated that 5 star rated companies may earn less income “…because most 5 star average businesses have fewer reviews, are less established, or may be guilty of black-hat practices like buying fake reviews.”

“Overall, high star ratings have an impact on revenue at local businesses, but not nearly to the extent that many business owners might think.” - Womply

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Does the number of reviews counts?

Well, according to Womplys study, the total number of reviews has a larger impact on revenue than the average star rating.

Many business owners fret about their star rating, but in Womplys study, findings suggest that businesses should focus much more on increasing the number of reviews than almost anything else.

Businesses in the analysis averaged 82.5 reviews across all review sites. We analyzed the revenue of businesses whose review counts fall above and below that threshold.

The results of this analysis reveal a strong positive correlation between review count and sales revenue. Businesses with more than the average number of reviews bring in 82% more in annual revenue than businesses with review counts below the average.

There’s certainly a lot of nuance behind these numbers, but it’s clear that local businesses benefit from getting legitimate and honest reviews from as many customers as possible. Even if some of those are negative reviews, customers seem to put more value in a higher number of reviews than they do in a 5-star rating.

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