As the Restaurant Industry Adjusts to the Digital Age, Online Reviews and Ratings Sites Offer a Powerful First Impression

January 17, 2014 5:12 pm Leave your thoughts

As the Restaurant Industry Adjusts to the Digital Age, Online Reviews and Ratings Sites Offer a Powerful First Impression

Every restaurant owner knows that positive reviews will boost sales while negative reviews could spell disaster. In an age when everyone’s a critic, these reviews have never carried more weight in the court of public opinion.

A pair of economists from the University of California – Berkeley published a 2012 study in the Economic Journal that showed a distinct relationship between online ratings and consumer’s purchasing decisions. These researchers focused on the effects of positive ratings for 300 San Francisco area restaurants on Yelp. They discovered that a restaurant with a rating increased by just half a star – on a 1-5 scale – was much more likely to be full at peak dining times.

In terms of a restaurant’s 7 p.m. bookings, an extra half-star rating increased the chances of a sellout from 30 percent to 49 percent. The increase occurred without any price or menu adjustments, confirming that reviews drew customers into the restaurant in droves.

Online reviews and ratings sites play an increasingly important role in how consumers gauge the quality of products and services. One problem generally occurs when average ratings are posted. A restaurant with an average rating of 3.7 will display as a 3.5-star average rating, while a restaurant with an average rating of 3.8 shows as a 4-star average rating. Although these two restaurants might of nearly identical quality, this distinction makes a big difference.

The study collected reviews for 328 restaurants in San Francisco. It found that increasing from 3 stars to 3.5 stars improved a restaurant’s chance of selling out from 13 percent to 34 percent. Moving from 3.5 stars to 4 stars improved the odds from 30 percent to 49 percent.

Many restaurateurs might be tempted to post fake reviews. Some of them may even hire an outside firm to generate authentic reviews. Everyone’s trying to make their businesses. look better to prospective customers. Concerns that restaurant owners are manipulating the online reviews and ratings system is becoming a major issue. For example, Tripadvisor places a “red flag” next to hotels that have published gushing reviews on its website.

Restaurants are the most reviewed and searched for business type online, surpassing retailers, hotels and bars. Receiving nearly 46 percent of online reviews, restaurants are seen as the business for which online reputation matters most. For customers, searching for restaurants online, writing recommendations and reading reviews has become a regular occurrence.

With Google highlighting business listings and user reviews on page one of search results, prospective customers are likely to see several different reviews while searching for your website and Facebook page. In order to attract new customers and keep old ones, restaurant owners need to determine the review sites that matter most to their business and claim their business profiles.

  • Yelp is the current leader in online restaurant reviews, boasting 30 million total reviews and 100 million unique visitors each month. Yelp is the first place for online readers to seek out information about restaurants.
  • “Restaurants” is the most popular search term on Yelp, and restaurants are the second most popular business type reviewed on the review site (21%).
  • Yelp is the highest-ranking review site on Google when “restaurants” is included among the search terms. When an online user types “restaurant” + “city,” a Yelp review is the most likely first result.

Yelp recently eclipsed TripAdvisor as the most active review site. TripAdvisor’s content concentrates on hotel and airfare accommodations. Foursquare presents another opportunity to attract new customers, with 20 million users sharing recommendations with family members and features. With the prevalence of online restaurant reviews and ratings, and the ability to offer coupons, discounts and deals, Yelp should be at the top of any restaurant’s priority list.

Relying on the Internet for advice requires a watchful eye. Online review and rating sites are a popular place to obtain dining advice. A National Restaurant Association survey in 2011 found that approximately one in five adults read or post reviews on these sites. Twenty-six percent are likely to access them for more information about new restaurants. In this age of information sharing, word travels fast. The Internet has changed the traditional word of mouth in terms of restaurants and other entertainment locations.

The best thing about online reviews and ratings sites such as Yelp and OpenTable is that people will offer a wide range of opinions. Searching online reviews and ratings has helped countless users find the perfect dining experience. As a result, restaurant owners must be aware of what their businesses bring to the online table.

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Steven Wyer

Chief Operating Officer at The Review Solution
Steven Wyer is the Chief Operating Officer of Third Coast Interactive, Inc. and the author of Violated Online. As COO of Third Coast Interactive, Steven Wyer oversees platform development, sales, marketing and internal operations. These responsibilities include global expansion into targeted vertical markets that can best leverage the power of The Review SolutionTM, a service that offers consumers a convenient way to post online reviews for local, regional and national businesses.