Old business model vs. new model.
- In traditional models, businesses and professional practices seek new business through word of mouth networking, advertising, and sales efforts.
- With the new business model of Reputation and Internet Marketing, it’s no longer about finding new business. It’s now about being found.
- The skyrocketing growth in the use of search engines has changed the dynamics, so that being found is now the key to successful marketing and business development.
- With this new internet-based model, consumers are not “sold to.” They “decide to buy,” and they go online to check out their options.
- When they decide to buy, it is critical to your success that they find you. So you need to rank high on search engines, by playing by Google’s rules. Google ranks you higher when you meet four key factors:
- Be optimized for search engines with extensive and accurate online directory listings.
- Have a mobile-optimized web page.
- Have a strong social media footprint
- Have lots of positive, recent customer reviews.
- For example, let’s say a consumer is looking for an Italian restaurant, or perhaps a dentist. So they do an online search and almost always start at the top of the list of the highest ranked and rated options. If you are far down the list, most people contact your competitors – not you.
- With this new model, when someone contacts you, they are already ready to buy. They are presold, because they can see you are highly rated by Google as well as by other consumers.
Word-of-mouth happens online.
- Due to the explosion of the internet and social media, people simply don’t talk to each other as much as they used to. Instead, they communicate via email, text, social media, blogs and online forums, etc. And they seek information via search engines.
- Word-of-mouth used to be how we gained our reputation and referrals.
- Today, most word-of-mouth is now actually happening online. People go online to search for something they need. They then instantly see the number of stars next to your business name, and can simply click to see what other, third-party reviewers say about you. It’s online word-of mouth with just the click of a mouse.
- When they contact you, positive reviews have already pre-sold them. They then simply contact you to place an order or set an appointment.
- The key to profiting from this online word-of-mouth is to make sure you are in front of people who are actively searching for your product or service, and who are pre-sold by positive third-party reviews. You need a comprehensive system to do that, and Be 5-Stars provides that system.
Consumers Believe Other
Consumers, Not You.
- The most comprehensive study ever done on consumer purchasing behavior was done by Prudential Insurance. The study concluded that the #1 factor in why someone chooses to buy from a certain company or professional is simply trust. People are risk adverse, and don’t like to take chances with providers who can’t be trusted.
- Consumers trust reviews. In fact, 80% of consumers trust reviews as much as a personal recommendation from a friend. (BrightLocal 2015 study)
- By comparison, 75% of people don’t believe that companies tell the truth in advertisements. (Yankelovich study)
- This is why good reviews of 4.5 generate more than double the sales conversion rate of reviews rated 1.0 – 2.9. (Expedia study on hotelmarketing.com)
- Positive reviews create trust and pre-sell new customers and patients. They are pre-sold before they even contact you, because they have already researched you. They are pre-qualified, and ready to buy.
Source: ComScore & The Kelsey Group study
Trust equates to premium prices, since consumers have less risk.
- Consumers gauge value based on cost versus benefit, as well as risk of purchase. Consumers believe there is a risk in any transaction. When all else is equal, they will choose the lowest price.
- However, when consumers see ratings and reviews, they have the ability to factor value into the equation. When you are highly rated and recommended, the risk of purchase is greatly reduced, and consumers will pay a premium for that.
- Research at Harvard & Cornell Universities show that a one star increase in ratings results in higher revenues. A major study by ComScore & The Kelsey Group shows consumers are willing to pay 20%-99% more for a one-star higher rating.
- With higher ratings and reviews, you will not only be able to increase your numbers of customers or patients, but also the price they are paying. This has a multiplier effect on your bottom line.
For example, consumers typically expect to pay more for a 4-star hotel compared to a 3-star hotel. Research shows that it’s an average of 38% more. For example, if a 3-star hotel costs $100 per night, they perceive that a 4-star hotel is worth more – about $138 per night for the same local market area.
Similarly, consumers typically expect to pay an average of 49% more at a 4-star restaurant compared to 3 stars. So if an average meal costs $20 at a 3-star restaurant, they expect to pay $30 per meal at a 4-star restaurant in the same local market area. And the higher rated restaurant can command higher prices, because they are in much higher demand, do to being ranked higher on Google searches, which drives inbound traffic to them automatically. In fact, just a half-star higher rating makes it 30-49% more likely that a restaurant will sell out its evening seats, according to a study by the University of California at Berkeley.