When brands consider how well they perform on customer review sites such as Google, Yelp, Facebook and Foursquare, they too-often base their level of success on their ‘average’ review on a five-star scale.
Online review ratings matter because they influence peoples’ shopping, dining, and travel habits. Most consumers read online reviews before making significant purchases and say that reading a positive customer review increases their trust in a business [BrightLocal]. Monitoring your company’s online reviews gives you the opportunity to challenge inappropriate reviews, investigate bad customer experiences, and optimize your review presence.
Ironically, measuring success on customer review sites using averages is a failure. This is because few customers leaving online reviews ever have ‘average’ experience. A company with 550 online reviews might average “3 stars out of 5”, but very few of the 550 reviews (only 5%) might be in the 3-star average range. Instead, the distribution of reviews would look something like this:
This is why averages don’t provide an accurate view of customer experience. Instead, you need to look at the ratio of good reviews to bad reviews using a measurement called Net Customer Sentiment.
Net Customer Sentiment (NCS) is a single number (from -5 to +5) representing customer sentiment from reviews. A NCS score of -5 represents a company that receives only negative reviews and a NCS score of +5 represents a company with only positive reviews. A NCS score of zero represents a company with an equal number of positive and negative reviews. The metric is calculated by taking the difference between the number of negative reviews (1-2 stars out of five) and positive reviews (5 stars out of five) and dividing by the sum of negative and positive reviews. Here’s an example using the table above:
Starting Values: 550 mentions | 259 negative mentions (1-2 stars) | 242 positive mentions (5 stars):
difference: positive – negative ( or 242 – 259) = -17
sum = positive + negative ( or 242 + 259) = 501
net customer sentiment = (difference / sum) * 5 = ( or (-17/ 501) * 5) = -1.666… = -1.7
Net Customer Sentiment makes it easiest to accurately compare review performance over any time period (yearly, quarterly, monthly, weekly) by location, city, state or region.
Managing online review sites is challenging, but achievable. Since the reviews that appear on most review sites aren’t found social media monitoring tools and general search engines, monitoring reviews is a nuisance for single-location companies and a headache for companies with dozens, hundreds or thousands of locations. Companies in the former group need to monitor their reviews individually on each review site. Those in the later group leverage solutions like Review Trackers so that reviews for all locations, from all review sites, can be managed in one dashboard.
Unsolicited reviews from online review sites are the best means of judging customer sentiment. That is why companies need to pay as much (or more) attention to them as consumers.