How Negative Reviews Affect Your Business

Jed Smith Profile image

Written by:

Updated October 28, 2022

Negative online reviews are something that a business owner dreads, and for good reason- it’s been proven in study after study that a single negative review has a far bigger impact than multiple positive reviews. Knowing how negative reviews affect your business can help you respond to them in ways that minimize their impact.


  • Business ratings based on online reviews have been proven to directly affect reported revenue
  • The vast majority of consumers make decisions on goods and services based on online reviews
  • Search engine rankings are directly affected by a business’s online ratings on major platforms like Yelp

There are a number of key things to understand about negative customer reviews, negative feedback, and the statistics that show their effect, and that knowledge can help a business maintain repeat business and attract potential customers. Ultimately, the more you know will help offset negative and even fake reviews you might receive. Be sure to know how to respond to fake reviews to avoid hurting people’s perception of your business.

Understanding the Impact of Bad Reviews

Studies show that 90% of consumers now use Google and social media to do online research before making purchasing decisions or accessing services from a business. Furthermore, upwards of 75% of online customer reviews are found on Facebook or Google, meaning customers have more power and reach than ever to make or break a business. A business has options as well, you can learn how to use email marketing or take advantage of social media for your business.

Positive reviews and happy customers are a good thing, of course, as is responding to them, but bad reviews can drive consumers away far more than positive ones do. In fact, one study showed that it takes up to 12 positive online reviews to make up for the impact of one negative review. You may also be curious as to why people write fake reviews too, but first;

Here are all the key ways in which negative reviews have been proven to affect business.

Insider Tip

A business with a 1.5-star Yelp rating or lower will reliably report at least 30% less revenue than one with a rating on the higher end.

Direct Loss of Revenue

The data on the actual loss of revenue and poor ratings due to bad reviews that businesses experience is clear. Studies show that a business with a 1.5-star Yelp rating or lower will reliably report at least 30% less revenue than one with a rating on the higher end.

Damage to Reputation

Negative reviews can greatly impact a business’s reputation, even if they’ve spent years building a positive reputation. It’s been proven that one negative review has many times the impact that one positive review does, in no small part due to the fact that more potential consumers will engage with negative feedback on social media left by disappointed customers. This is also why word of mouth is important, as people will tend to trust someone they know more than an anonymous online review. Like how you trust a friend or family member, trust is important in business. It helps the consumer see the business’ character and commitment to its product/service.

Related: Learn how to get app reviews.

Driving Customers to the Competition

Again, studies have proven time and time again that negative reviews drive consumers away from a business and towards the competition. Research has shown that one negative review alone will typically drive a minimum of 30 customers away from your business and into the hands of a competitor. More than four consecutive negative reviews can increase your loss of customers by 70%. For example, you can read about the Casper mattress lawsuit.


One study showed that it takes up to 12 positive online reviews to make up for the impact of one negative review.

Lower Search Engine Rankings

Review-based business ratings can sink a business to the bottom of search engine rankings. Search engine algorithms recommend the highest-rated businesses first in search engine results, meaning that poor ratings can have an exponential effect- low ratings lead to low rankings, which leads to fewer potential customers discovering your business.

Rehabilitation Costs Decrease Profitability

Another effect bad ratings and negative reviews can have- though slightly less directly- is in the costs that usually accompany any serious attempt to rehabilitate a business’s reputation after it has experienced low ratings and poor search engine performance due to negative reviews. These costs can include expanding a social media budget, hiring more employees or contract workers, and purchasing licenses for new software needed.

These extra costs directly decrease the overall profitability of a business, and the effect can last for quite a while as a business works to recover its online reputation.


Why are online reviews important?

Countless studies show that online reviews and ratings for businesses have a bigger impact now than any other form of consumer engagement or media- 90% of consumers will avoid a business based on even a bad review or low rating.

How do negative reviews affect SEO?

Reviews drive a business’s online rating on every major platform, and search engines will drive consumers to businesses with high ratings first, meaning far fewer people will discover businesses with low ratings via search engines.

Do negative reviews affect a business more than positive ones?

Yes, studies show negative reviews have a far greater effect on businesses than positive reviews for potential new and repeat customers.

STAT: 85% of consumers say they trust online reviews as much as recommendations from friends and family (source)

STAT: An average business with a 1.5-star Yelp rating will typically report 33% revenue than one with an average score (source)

STAT: 93% of consumers read local online reviews to make purchase decisions for local businesses (source)

Jed Smith Profile image