Senior Living Can’t Ignore Bottom Line Impact of Online Reviews

| May 30, 2013

Senior living providers have lagged behind other industries in cultivating a strong online presence, marketing professionals agree. But as online consumer reviews on their communities grow more prevalent, so will the reviews’ impact on their bottom lines—making them impossible to ignore.

That one-star review that was left four months ago by a disgruntled adult child of a former resident about an isolated incident? It could be the difference between a community making a prospective resident’s shortlist, or falling by the wayside, says to Blake Hodges, director of digital media and analytics at marketing firm GlynnDevins.

If that keeps happening, and without any sort of timely response from the community, that can have a very real impact.

“Reviews already have a measurable impact, and it will only grow,” Hodges says.

Yelp.com, a site founded in 2004 that allows consumers to leave star ratings and reviews for businesses ranging anywhere from restaurants to auto mechanics, already has more than 10 million business reviews and receives about 40 million unique visitors each month, according to a Harvard Business School study that was published this past April.

For each star rating increase a restaurant received on Yelp, found the Harvard researcher, there was a correlating 5-9% increase in revenue.

That clicks with the findings of a 2012 Nielson Report which revealed people trust online consumer ratings and reviews (62%) more than the ratings/reviews of industry experts (57%)—second only to recommendations from friends and families.

A separate study by Convergys found that just one negative review can cost a business almost 30 customers. Eight in ten consumers will actually change their mind about a product after reading a negative online review, according to another survey by Cone, while 87% reported that positive reviews confirmed their decision to purchase.

The volume of reviews right now for senior living is comparatively very low, but its growth trajectory is enormous, says Hodges.

“Seniors and their adult children are already using sites like Yelp, OpenTable, and TripAdvisor,” he says. “[Senior living reviews] are going to be a natural extension. Consumers are going to see more of them, which means they’re going to have more of an impact.”

Currently, only some senior living shoppers are specifically turning to online reviews to inform their decision, but the number will grow quickly, predicts Eric Seifert, president of SeniorAdvisor.com, the consumer review component of senior living referral service A Place for Mom.

“Everyone’s asking for reviews—they’re engaging with us on our Facebook page, and we get a lot of reviews from our own customers,” he says. “Customers are really driving this transition, and we all have to embrace it or else you end up trying to play catch-up.”

The reactions among senior living providers to the growing prevalence of consumer reviews ranges across the spectrum from excited to unprepared, says Seifert. “It ranges,” he says. “People are still trying to get their arms around it.”

Some people actively engage with reviews and use them to their advantage, he says, while others have been left scratching their heads.

So far, there have been no surveys specifically on the impact of online senior living community reviews. But anecdotally, says Hodges, there is always a potential loss in revenue for a community when someone comes across a poor review.

“[Providers] have to think about their own profitability, and potential revenue from each prospect: What do they potentially lose from just one person who sees [a bad review] and thinks, ‘You know, I’m going to look somewhere else,’” says Hodges. “You need to know what’s out there, what’s being said about you, and knowing exactly when it’s been said so you can plan your response.”

Poor reviews are common for basically any product, company, or service—senior living communities included. The problem arises when there aren’t enough—or any—good reviews to balance or outweigh them, and consumers actually tend to trust reviews more when they see both good and bad scores, according to social commerce company Reevoo.

“As a consumer, you know not everyone’s going to be happy. Every business has people who aren’t happy,” Seifert says.

A lead form on SeniorAdvisor.com’s website allows customers to click on a community they’re interested in speaking with someone about. The click rates—or interest levels—are much better on communities with a higher overall number of reviews and high average ratings, according to Seifert.

On Caring.com’s online review platform, assisted living and memory care listings with reviews had more than five times as much consumer inquiries in 2012 than listings without reviews. A majority (75.5%) of the site’s 36,500 senior housing reviews are four to five-star ratings.

For providers concerned about the possibility of poor reviews, the good news is, consumers tend to remember glowing reviews better than negative ones, according to Michele Hockwalt, director of marketing at Bild & Company, a national healthcare consulting firm.

“Even though we tend to tell more people when we have a bad experience than when we have a good one, keeping your business customer-focused will mitigate the occasional negative review,” Hockwalt says.

While it’s commonly thought that people are more likely to write negative reviews compared to positive ones, the opposite is actually true, she says: People are twice as likely to write a positive review than a negative one.

Dissatisfied customers will still tell their friends and families about their bad experiences, but not as many will put complaints on a public forum where they open themselves up to censure, she says.

Instead of worrying about the negative reviews, according to Hockwalt, providers should consider their silver lining: an opportunity for providers to demonstrate willingness to address issues.

“A complaint can be seen as a gift, allowing us the chance to develop an emotional connection with customers, as well as the opportunity to fix any issues in our businesses,” she says. “When it comes down to it, if a business is customer-focused and commits to doing the right thing, your online reviews will reflect that.”

Written by Alyssa Gerace


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Category: Senior Housing, Senior Living

Comments (2)

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  1. Chris Rodde says:

    Hi Alyssa, I agree that reviews are important and providers should be proactive about monitoring and responding to them. However, I don’t believe senior living reviews will ever have the impact that they do in hotels & restaurants as we’ll never reach the same critical mass of reviews. Reviews do have value, helping consumers to gauge the culture and personality of a senior living community, but reviews won’t become a primary decision making resource. It is for this reason that we launched the SeniorHomes rating system in May of this year–to offer consumers an objective metric to gauge the quality of a senior living community. Please see a blog post that I recently posted on this topic: http://www.seniorhomes.com/w/putting-assisted-liv

  2. Darren says:

    Great article! It's true that in today's world online review management (ORM) has certainly become a crucial tool to use for businesses in many verticals. Online reviews DO affect the bottom line and now that Google has rolled out recent interface changes like (http://www.chatmeter.com/google-local-changes-requiring-greater-review-management/) and launched Hummingbird (http://www.chatmeter.com/is-hummingbird-flying-google-into-the-future-of-local-seo/), effectively managing ORM has become too important to ignore, especially for the senior housing industry.