How Customers Use Online Reviews to Select Residential Service Providers

In an age where online reviews websites allow customers to share their opinions with the masses, residential service providers must do all they can to provide memorable customer experiences that encourage positive feedback.

Field service management functions like work order histories and intuitive scheduling and dispatching can have direct impacts on customer service.

But there’s still the question of how customers share their residential service experiences with others online, and what effect these reviews have.

To learn more, Software Advice surveyed residential service customers to determine how they use online reviews sites to select residential service companies.

These findings, along with commentary from industry experts, will help these companies better understand the impact of reviews sites and how they can maximize their online presence in order to attract the business of both new and existing customers.

Key Findings

  1. Eighty-six percent of respondents would pay more for a residential service provider with higher ratings and reviews.
  2. A majority of respondents (68 percent) say they find online reviews to be “extremely” or “very valuable” when evaluating residential service providers.
  3. The most important information respondents look for in online reviews is the quality of service provided (87 percent) and cost (78 percent).
  4. Fifty-six percent of respondents say they used online resources to find their most recent residential service provider.
  5. The majority (74 percent) of respondents in our sample consult Yelp when selecting a residential service provider.

Introduction

Consulting online reviews has become an integral part of the modern consumer’s buying process. A recent study from Dimensional research found that the buying decisions of 90 percent of respondents who read online reviews were influenced by positive reviews, while 86 percent were influenced by negative reviews.

“With the rise of social media and online reviews sites, consumers are talking about local businesses on the Internet more than ever before,” says Morgan Remmers, manager of local business outreach at online reviews giant Yelp.

“This kind of third-party validation in the form of consumer reviews is something that many people rely on when looking for a business these days, because it isn’t something a business can control like they can with traditional marketing and paid advertisements.”

Though Remmers points out the lack of control that businesses have with online reviews sites, there are still best practices for recruiting more (and better) reviews, as well as for creating and managing an online presence for your business.

This report will outline some of these best practices and help residential service business owners realize the importance of cultivating a positive presence on online reviews sites.

Many Would Pay More for Well-Reviewed Service Provider

Our most compelling finding for business owners is that an overwhelming majority of respondents say they would pay more for a service provider with higher rankings and better reviews, versus paying less for a provider that didn’t.

Willingness to Pay More for Providers With Positive Reviews

Willingness to Pay More for Providers With Positive Reviews

In all, 86 percent of respondents said they would pay more, to some degree, for a service provider with more positive reviews. Clearly, there is real revenue-generating potential for businesses with positive online reviews.

“Consumers highly value their dollars spent, and are typically willing to pay a higher price for what they believe is a better service or product,” explains Chris Sullens, CEO of Marathon Data Systems.

“Word of mouth has [been], and always will be, one of the strongest points of persuasion for consumers; now it is just digitized, and they trust what other consumers have to say more than any marketing material they might see.”

Software solutions that provide residential service business management functions can have a positive impact on the reviews customer leave for businesses.

“Businesses [using this software] can spend less time worrying about daily operations and tasks, and spend more time on building relationships with their customers and improving satisfaction—which ultimately will lead to a higher willingness to leave positive reviews for the business,” says Sullens.

96% Find Online Reviews Moderately to Extremely Valuable

In understanding how customers use online reviews to find residential service providers, we thought it’d be prudent to determine just how valuable these reviews are to customers.

Value of Reviews in Evaluating Residential Service Provider

Value of Reviews in Evaluating Residential Service Provider

It turns out that a majority of respondents do indeed value reviews when evaluating and selecting a residential service provider. In fact, 25 percent find the reviews “extremely valuable” for this purpose, and 43 percent find them “very valuable.” Another 28 percent of respondents find reviews “moderately valuable.”

Sullens says the value of these online reviews stems from the snapshots they provide of businesses’ relationships with their customers.

“Putting an emphasis on customer relationships can certainly help,” he says. “If a business consistently provides high-quality services, competitive pricing and quote accuracy, positive word-of-mouth from satisfied customers will come easily.”

An October 2014 report by Software Advice examining how software buyers use online reviews further exemplifies the value consumers place in online reviews. This report found a combined 68 percent of respondents indicate that online reviews are either “extremely” or “very valuable” when making a software purchase. Additionally, almost 30 percent found reviews “moderately valuable,” whereas only 2 percent found them “minimally valuable.”

To see if there is a difference in how males and females perceive online reviews, we broke down the previous chart by gender:

Value of Reviews in Evaluating Residential Service Provider
by Gender

Value of Reviews in Evaluating Residential Service Provider by Gender

While there are some similarities in how the two demographics value online reviews, a much larger percentage of women find online reviews “extremely valuable” compared to their male counterparts (36 versus 17 percent, respectively).

As such, business owners should strive to include positive reviews in any advertisements targeted at women, and should make an effort to recruit reviews from this demographic.

Customers Seek Quality of Service, Cost in Online Reviews

Now that we know the value potential customers place in online reviews, we next wanted to know what specific information they seek when evaluating residential service providers.

Information Sought in Residential Service Provider Reviews

Information Sought in Residential Service Provider Reviews

Among respondents in our sample, 87 percent look for information on the quality of services provided, while 78 percent seek pricing and cost information. These are two crucial elements that could sway potential customers towards or away from choosing to do business with a given provider.

While business owners can’t control what information people choose to include in their reviews, they can control what information is listed on their company profile on online reviews sites such as Yelp.

According to Remmers, when it comes to what businesses can do to improve their online profiles, the more information a consumer has when making a buying decision, the better:

Be sure to add your website and business hours, as well as a 3,000-character description about the services you offer. Adding photos is highly recommended. In fact, people searching Yelp stay on a business page with photos two and a half times longer than one without. Photos of your friendly staff and before [and] after photos of work you’ve completed are a good start.

Morgan Remmers, Yelp

She also encourages businesses to utilize Yelp Deals, which are essentially pre-paid coupons that businesses can send to encourage customers to choose them over competitors.

Yelp collects payment from the purchaser, and retains 30 percent of the purchase. Remmers says these are great ways to attract first-time customers as well as customers who are ready to make a decision on a provider, since they can do so directly from a Yelp business page.

Majority of Respondents Use Online Resources to Find Services

We began our survey by asking respondents how they found their most recent residential service provider. From this, we filtered out those who didn’t use online reviews, so that those answering the remaining questions had their online reviews experience fresh in their mind.

Thus, the chart below represents every respondent who participated, whereas the rest of this report only refers to those who used reviews sites to choose their last provider.

Resource Used to Select Last Residential Service Provider

Resource Used to Select Last Residential Service Provider

We found that 55 percent used online resources, such as reviews sites, search engines and Craigslist, to find their most recent residential service provider. The other 42 percent used traditional resources such as asking family and friends for referrals.

Given a majority are using online resources, it’s crucial for businesses to develop an online presence, especially as it pertains to reviews sites.

Next, we drilled into those respondents that used online resources to select their most recent service provider. Search engines are the most popular means of selecting service providers online, cited by 56 percent. Not far behind are online reviews sites, cited by 38 percent.

Online Resource Used to Select Residential Service Provider

Online Resource Used to Select Residential Service Provider

It’s important to note here that, while search engines are the most popular online means of selecting providers, many of the results these engines return are themselves for online reviews postings and websites.

To explore this further, we decided to examine how often online reviews sites appear on the first page of Google searches. We searched the term “plumber (city),” inputting the 30 most populous U.S. cities.

Out of 300 results, 127, or 42 percent, were for general reviews sites or for specific postings within those sites.

This finding indicates that not only are online reviews beneficial in and of themselves, but having a strong online reviews presence can capture many potential customers searching for providers through other online channels, as well.

Yelp Is Most Popular Online Reviews Site

When we broke down our Google search results data on plumbers in the top 30 U.S. cities, we examined which online reviews sites the results corresponded with. The highest percentage (43 percent) was from Yelp.

“People are often surprised to hear that, of the 67 million reviews on Yelp (as of Q3 2014), only 20 percent of the reviewed businesses on Yelp are restaurants, and 11 percent of the reviewed businesses are in the home and local services category,” Remmers says.

We also determined which online reviews sites are most popular amongst our respondents.

Most Used Online Reviews Sites

Most Used Online Reviews Sites

Most Used Online Reviews Sites, by Service Type

Most Used Online Reviews Sites, by Service Type

The data shows Yelp as the most popular online reviews site for all the service segments in question. In fact, 74 percent of respondents consult Yelp when selecting a residential service; nearly 10 percent more than Google+ Local reviews, which is the second-most popular online reviews site.

Sullens, of Marathon Data Systems, was surprised to learn the amount of residential service business listings on Yelp.

“While it wouldn’t come as a surprise that Yelp outranks other review sites for business reviews in the restaurant and hospitality industry, it is a little surprising that it is number one for residential services,” he said.

If residential services businesses don’t have a Yelp profile, it would be wise to create one. It certainly can’t hurt to increase exposure to potential customers, and there are multiple success stories, specifically in the residential field services industry, from businesses that saw great returns upon utilizing their Yelp business page.

However, creating a Yelp profile is only the beginning of leveraging online reviews to drive revenue and increase exposure for businesses.

As Remmers states (and as evidenced in this informative Wired article from April 2014), the best way for businesses to leverage online reviews is to thank positive reviewers and encourage them to refer their business to friends.

However, for small to midsize service businesses in particular, communication with reviewers who leave negative reviews in a must. Businesses should provide these unsatisfied customers with some restorative solutions to their pain points while at the same time being aware that there is simply no pleasing some customers.

Even still, data from our previously mentioned report found that when asked if a single negative online review would steer them away from a given software product, the majority (65 percent) of respondents said this was “not at all” or “minimally likely.”

But when asked if a cluster of negative online reviews would steer them away from a given software product, 44 percent of respondents said it would. Businesses should keep this in mind when interacting with reviewers.

Conclusions

All the data from this report is only beneficial to the extent that it can be made actionable. Given that, residential services business owners are advised to claim their free business profile on Yelp and other reviews sites. They also need to actively monitor and communicate with their reviewers, both positive and negative.

On the other hand, business owners should consider integrating field service management software that connects all facets of their business. As Sullens says:

This integration and connectivity [provided by residential services management software] gives business owners, managers etc. the insight they need to make improvements within their business and create a better overall, end-to-end customer experience that makes it easier to turn those customers into true advocates and cheerleaders for the business.

Chris Sullens, Marathon Data Systems

Methodology
To find the data in this report, we conducted a seven-day online survey of seven questions, and gathered 1,239 responses from random adults who have used residential services within the United States. All survey questionnaires undergo an internal peer review process to ensure clarity in wording.

Sources attributed and products referenced in this article may or may not represent partner vendors of Software Advice, but vendor status is never used as a basis for selection. Interview sources are chosen for their expertise on the subject matter, and software choices are selected based on popularity and relevance.

Expert commentary solely represents the views of the individual. Chart values are rounded to the nearest whole number.

If you have comments or would like to obtain access to any of the charts above, please contact justinguinn@softwareadvice.com.

 

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