Why 5-Star Online Reviews Aren’t Perfect for Business

It would be difficult to overstate how important online reviews and ratings are in terms of their effects on sales.

Research from Spiegel has found that the likelihood of purchase for products with five or more reviews is an astonishing 270% greater than the purchase of a product with no reviews. This is particularly true for higher-priced products.

Ninety-seven percent of shoppers report that reviews influence their buying decisions, and given two products with similar ratings, consumers are likelier to buy the one that has more reviews.

Online reviews matter tremendously, but it would be an oversimplification to say that your goal should be a 5-star online rating. That’s because people’s reactions to online reviews are becoming more nuanced.

People Think 5-Star Ratings are Too Good to Be True

When people see a business or a product rated five stars out of five, they are skeptical for several reasons. If there is only a single 5-star review, they tend to think that the single review is not enough data on which to make a decision. If there are only a few reviews, it’s easy to conclude that the business owner had friends give the 5-star ratings, again making the data less informative.

Woman sitting at her desk looking up in contemplation.

Perfect ratings tend to seem less legitimate to consumers.

And if a product or business has a 5-star rating based on a lot of reviews, consumers may be suspicious that the reviews are fake. No matter how great a product or business is, it isn’t perfect, and a string of 5-star ratings can make consumers question rating validity.

Why 4- to 4.7-Star Ratings Are the “Sweet Spot”

Consumers are realistic when it comes to reviews. They know that just about any business or product is going to get the occasional bad review, and they mentally account for this when looking at ratings. They trust 4- and even 3-star rating averages more than they trust a 5-star average, because they know that the occasional bad rating is a fact of life for most businesses.

Spiegel research indicates that purchase likelihood peaks when star ratings fall between approximately 4.0 and 4.7, but as ratings approach 5.0, purchase likelihood decreases. Additionally, reviews and ratings given by verified buyers carry more weight than do anonymous reviews.

People trust 3- and 4-star ratings because they feel like they reflect reality. They trust 5-star ratings less, because they seem too good to be true. And they distrust 1- and 2-star ratings because they feel like they may be fake or that they don’t tell the whole story. In short, people trust certain star ratings more than others, as you can see in the following chart.

Industries Where Reviews and Ratings Matter Most

Mechanic working on an engine.

Car repair, healthcare and insurance are business categories where ratings are especially important.

There are a few business categories where reviews matter more. These are typically industries that involve highly personal service, expensive products or services or services where the provider has significantly more knowledge than the consumer (putting the consumer at a perceived information disadvantage). The following table lists business categories where reviews are most important, along with the percentage of people who consider reviews important to making the best decision for each.

Type of Business% of Consumers Who Consider Reviews Important
Car Repair67
General Practice Physician66
Car Dealer65
Insurance61
Restaurant55
Bank55

The good news is, every business can take steps to bring their online review rating to that 4.0- to 4.7-star sweet spot. Perhaps the most important step is simply soliciting more reviews and doing so consistently. Increasing the number of reviews not only helps people trust your reviews more, but it also helps your reviews more accurately reflect reality. For more information, Reputation.com encourages you to download our free 5-Step Guide to Improving Your Online Reputation.

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