Even Half a Star Difference on Yelp Makes a Huge Difference for Restaurants, Study Finds

Online ratings are becoming crucial for small businesses

By on September 3rd, 2012 08:45 GMT

In the olden days, five, ten years ago, having an online presence for your small business was hip and forward looking. Now it's crucial.

In that time, online reviews went from a nice perk to make-or-break as a recent study has shown. The study found that even minor differences in online ratings had big implications.

The study focused on restaurants and Yelp reviews. Two Berkeley economists looked at 328 San Francisco restaurants and how full they were during peak hours, i.e. in the evening, while comparing to their online ratings.

The researchers found that half a star rating difference can lead to a significant change in the percentage of time the restaurant was full at 7pm, from 30 percent to 49 percent.

Of course, better-rated restaurants are going to offer a better experience than the others, so those restaurants should see more people coming more often even without the review. But the study took pain to differentiate between restaurants that offered very similar experiences but had different online ratings.

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Online reviews are becoming crucial to restaurants and other small businesses
   Online reviews are becoming crucial to restaurants and other small businesses