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.
This is the third of a series of three posts that will help you to understand the importance of reviews and how you can protect and strengthen your brand reputation by handling your reviews correctly. In today’s post we will go through how Star Ratings works and how it can affect businesses revenues.
So, in the two other posts in this series, we’ve covered the things that a business owner can control when it comes to review sites, let’s get into the reviews themselves. We’ll start with what many business owners consider the most important part of their online presence—their overall star rating.
The sweet spot for local businesses is from 3.5 stars to 4.5 stars, with 4 to 4.5 star businesses earning the highest average revenue.
According to 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.”
One last note on star ratings; Womply suggests that while there is value in nurturing your star ratings, the real powerhouse here is claiming and handling 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