In a research report for the restaurant industry, Harvard Business School professor Michael Luca published a study that demonstrated that a 1-star increase in ratings equals a 5-9 percent increase in revenue.
“We believe (and have the data to back it up) that Social Proof is one of today’s best marketing tools in order to boost consumers’ confidence and build trust earlier in the (sales) funnel,” Luca wrote. “Social Proof helps consumers buy a product or subscribe to a service they will most likely enjoy based on the ‘wisdom of the crowd.’
Today, 92 percent of consumers read online reviews and 80 percent of shoppers trust reviews as much as personal recommendations, according to trustpilot.com.
Nick Choat is an award-winning franchise owner who knows the challenges small business owners face. As a certified SCORE mentor, Choat enjoys helping others grow their businesses through digital marketing and Social Proof. He has worked with industry giants, including The Walt Disney Co., Boeing and Ernst & Young. He applies these insights to his own e-business and as a digital marketing trainer and consultant.
According to Choat, Social Proof is about how to use trust and transparency as a bedrock strategy to grow your business. Social Proof should be the centerpiece of your digital marketing strategy. It amplifies mobile-friendly website design, search engine optimization and search engine marketing, social media, paid advertising, email marketing and content marketing.
Choat says, “Social Proof means we use other people to determine what is correct.” Social Proof comes in many forms, including expert, celebrity, user, wisdom-of-the-crowd and wisdom-of-your-friends. According to Tech Crunch, “Social Proof is the new marketing.”
Simply put, Social Proof is where people’s behaviors are influenced by the action of others. A great example is Oprah Winfrey’s Favorite Things list. Winfrey’s endorsement of a product can cause websites to collapse from increased activity and purchases.
An example of expert Social Proof might be a blogger giving your product a positive review, an Instagram post showing an expert loving your product, or displaying an expert certification. Having an expert tell others they like your product produces a “halo effect.” If the trusted expert likes it, customers know it must be good without having to do outside research. An example of expert Social Proof is Fitbit having fitness experts leave reviews. It joined forces with Adidas to show customers that they have the best fitness tracker.
The Trust Sentiment Index
According to the Better Business Bureau’s 2017 Trust Sentiment Index, for every 10 problems customers have, only seven will complain. In only four cases will the customer have their problem resolved to their satisfaction and only three customers will return. That’s a 70 percent loss of existing business where a problem exists. Therefore, a Social Proof strategy begins with customer retention. As a business owner, you must listen to and act upon what your customers are telling you. Customer acquisition will increase when your Social Proof is strong.
Online reviews are good for consumers and for search results. These reviews provide a transparent window into your business.
Three elements of your user Social Proof strategy
1. Control (own) where the reviews happen. You can get reviewed on dozens of sites, such as Google, Facebook, Yahoo, Twitter, Linkedin, Instagram, Bing, Zillow, Yelp, Trip Advisor, etc. Here are the ways to own it:
• Claim each listing (ie: Google My Business)
• Provide complete business information
• Turn on alerts
• Commit to customer satisfaction
• Develop an approach to build your user Social Proof
• Actively manage your Social Proof
• Flaunt your Social Proof
2. Solicit reviews. Be proactive and ask your customers to review your business.
3. Respond to reviews. If someone takes the time to write a favorable review, respond to it. If you receive a negative review, respond immediately.
Anatomy of a review response
Thank the writer for the review (personalize with the name of the person). Acknowledge the experience. Discuss future action(s) you will take to make a bad experience right.
Don’t sabotage your business with negative behaviors. Cyberbullying, fake reviews, friends-and-family reviews, paying for reviews, arguing with the customer, and overall defensiveness should be avoided.
Mr. Choat owns two SportClips Haircuts franchise locations in Sarasota and Bradenton. He was named Small Business of The Year in 2018 by the Manatee Chamber of Commerce. His last corporate gig was with The Walt Disney Co., where he learned how the magic was made. His biggest takeaway was Disney’s obsession with guest and fan satisfaction. He has leveraged what he learned from his earlier business experiences. His book, “Online or Flatline, the Small Business Owner’s Guide to Digital Marketing” (Elevate – Feb. 21, 2017) codified these experiences.
Social Proof leverages word-of-mouth marketing. Before the internet, if someone had a good or bad experience with your business, they told their friends. That feedback is magnified to friends and hundreds or thousands of your potential clients. If the feedback is positive, your business benefits. If the feedback is negative, your business suffers. A Social Proof-based marketing strategy will enable you to leverage positive comments and help insulate you from negative feedback that could hinder business growth.
Dennis Zink is a volunteer, certified mentor and chapter chairman of SCORE Manasota. He is the creator and host of “Been There, Done That! with Dennis Zink,” a nationally syndicated business podcast series. He facilitates CEO roundtables for the Manatee and Venice chambers of commerce, created a MeetUp group, Success Strategies for Business Owners, and is a business consultant. Email him at [email protected]