How much is a good reputation worth? It may be more than you think!
Improving your MSP business reputation has many benefits, including building trust, earning more customers, and saving your marketing dollars.
High star ratings and stellar reviews about your customer service can be worth their weight in gold and act as acquisition magnets, lowering your promotional expenses considerably
A Good Reputation is Marketing Gold
There are a number of benefits that companies reap by actively managing their reviews and business reputation. This includes gaining customer trust, earning higher revenue, and being able to hire top talent.
82% of people read online reviews before choosing a local business.
Not only do reviews help sell products, they can improve the sales of higher priced products by illustrating the value to the consumer in a way that is meaningful to them. More meaningful than marketing-speak.
A report on how reviews influence sales by Spiegel Research Center found that having five reviews for a product increased the likelihood of a purchase by 270% over a product without any reviews.
When reviews are placed next to products, they also increase the conversion rate for a sale. This is especially true for higher end products or services. Having a product review was found to increase conversion rates by:
- 190% for a lower-priced product/service
- 380% for a higher-priced product/service
If you’ve had to pour additional advertising dollars into some of your higher end services, improving your online reputation, can cost a lot less and help sell those higher ticket items for you.
Likewise, when customers identify your brand with excellent support, they’ll seek you out rather than you having to pay to find them.
Here are several ways that a great reputation can save you big time on your IT business marketing costs.
Free Marketing Through Online Reviews & Referrals
With Google restricting certain types of computer business marketing in their Ads platform, social media marketing is an outlet that MSP providers look to. Placing a Facebook or LinkedIn ad can help you be seen within your local market and you can target certain types of customers.
However, advertising on Facebook can cost you an average of $0.97 per click or $7.19 per 1,000 impressions, depending on your advertising bidding model and competition.
LinkedIn averages $5.26 per click and $6.59 per 1000 impressions.
But when someone posts on social media how great your company is… that’s for free!
Having a good reputation for excellent service can earn you free advertising through reviews posted on sites like Google My Business and social media sites like Facebook, LinkedIn, and Twitter. Happy customers also refer other customers to you directly.
A happy customer results in approximately 11 more people being referred to a business.
People also trust reviews and recommendations by others more than they trust advertisements, so that free marketing is actually worth more than your paid ads.
Lowers Your Cost Per Acquisition
One thing that companies really need to keep an eye on when it comes to their marketing activities is their cost per acquisition for a client.
If you’re not closely tracking this, you can end up paying more for advertising and your time/tools to provide a service than you’re making from the service itself, or you can greatly reduce your margins.
For example, if your cost in time/software to provide a virus removal is $30, and you charge $99 for the service, you profit $69 for that service.
But if you pay $60 in advertising to acquire a virus removal customer, that can mean your profit drops to just $9. Not a great return!
So, anything you can do to lower your marketing costs and cost per acquisition, means more money left in your pocket as profit.
Improving your business reputation and managing your reviews can bring customers to you for little cost on your part.
What do I mean by “managing” your reviews? It means to:
- Monitor your reviews
- Reply to reviews (both good and bad)
- Put a process in place to request reviews from all clients
- Actively work on customer service to improve reviews
- Use reviews in your marketing (on service pages, etc.)
It was found that having 50+ reviews for a product or service can increase conversion rates by 4.6%. Let’s see what this means in cost savings when you’re marketing to a B2B customer, with an average conversion rate of 3.5% (for business services).
At a conversion rate of 3.5% and a cost per click of $5.00, you would spend about $143 per customer acquisition.
With the additional boost from having reviews, your conversion rate would be 8.1%, which would be a cost per customer acquisition of about $62, a savings of $81 per customer!
Improves Your Brand Recognition
When people are first searching online for a computer or IT service, they’re going to do a Google search and potentially see your business in a listing along with a lot of other computer shops.
One thing that will cause a person to call you before any of the others is if they already recognize your company. They may have heard your company name from a friend or colleague during a conversation or they may have run across it while searching review sites in the past.
This is a situation where “your reputation precedes you” can be a good thing if you have a great reputation. And it can mean you don’t need to pay more for better search positioning through ads or pay as much for offline advertising.
It’s estimated that you need between 5 to 20 “touch points” before a customer will purchase. Those touch points can be things like visiting your website, seeing an ad, or hearing your name from a friend.
The more reviews and “good customer mojo” you have for your business, the more potential touchpoints that can be out there working for you without you even realizing it.
For example, by the time someone calls you to purchase web protection services, they may have already read reviews from your customers on five review sites, heard good stories about you from two friends, and seen your Google My Business listing. (There’s a lot of consumer research that goes on behind the scenes that you don’t even know about!)
If you have all those touchpoints working for you because of your reviews and reputation, that means you don’t have to spend nearly as much in marketing to create them.
Easier to Sell Higher Priced Services/Products
Reviews are proven to offer a value statement for a product or service that speaks to consumers. There is an additional trust factor that each review brings to help a sale.
Researchers at the University of Technology Sydney found that while consumers are willing to pay more for desirable features, they’ll pay an even higher amount if a company has a good reputation.
They found that on average, consumers were willing to pay 9% more for a product or service from a company with a good reputation, and even more when reputation was combined with desirable features.
One of the researchers, Paul Burke from UTS Business School stated the reason why:
“Marketing managers need to be concerned about corporate reputation not only because it builds loyalty and trust but also because product features appear more valuable, so consumers are willing to pay more.”
In the study, it was found that for the feature of additional screen size, consumers were willing to pay $121 more for a TV that was 55” over 50”. But if the company selling the TV had a good reputation, they were willing to pay 22% more (+$147) for the larger screen feature.
By boosting your business reputation, you can decrease the amount you have to spend to market your higher priced services and products.
You Can’t Buy Trust
One thing that you can’t buy with marketing dollars is trust. And trust is a big factor when it comes to taking someone from a lead to a customer in your IT business lead funnel.
Customers believe what other people say about your business more than what you say about it. 3 in 4 consumers say they avoid ads altogether. Instead, they look for what other people say about a brand’s reputation to decide whether or not to do business with them.
Without customer reviews to provide the information many people need to make a buying decision, you could end up spinning your wheels when it comes to your marketing efforts and paying much more than you need to.
Just a single business review can improve conversions of a product or service by 10%, because consumers just don’t trust businesses without them in many cases. 72% of customers won’t move forward with a purchase before reading reviews.
Reviews provide that all-important trust factor that many people need before they’ll do business with you.
Incorporate Reviews as Part of Your Marketing Strategy
Reviews are not only a way to reduce the money you have to spend on marketing, they’re also a vital part of your sales funnel to gain consumer trust. They should be a significant part of your marketing strategy.
Have your reviews reduced your marketing spend? Share your story with us in the comments!