Facebook may be the most prominent social media channel, but sites that review businesses — such as Yelp, Google Local and Angie’s List — are fast becoming a good tool where banks and credit unions can acquire new customers. These review sites merge the power and credibility of word-of-mouth endorsements with the huge reach of online audiences to create a new gold standard for referrals.

Most consumers regard these review sites as credible sources of information. A BrightLocal customer survey found 88% trust online reviews as much as personal recommendations. And these readers are ready to purchase. 85% report buying a product within a week; 27% buy the same day.

According to BrightLocal, five years ago 71% of consumers consulted a business review site prior to making significant purchases. Today the number has jumped to 92%. Consumers are clamoring for experiential insights before committing to long-term relationships.

A little homework can reap big rewards for those financial institutions willing to invest in a monitoring and management program. It could also head off a wave of customer defections.

Anyone can create a business Yelp page, so it’s beneficial to set up your own pages — one per branch — before critics create their own to vent a real or perceived grievance. Banks and credit unions may have little control over the actual comments that consumers post on a review site, but an understanding of how these sites work will go a long way towards helping shape perceptions of your institution.

Many factors combine to determine the persuasiveness of a review site. Users, for instance, are influenced by the quantity of reviews. Sites with few reviews are seen as less credible. One study found that restaurant reviews are 50% more influential when the restaurant has at least 50 reviews vs. those with fewer than 10 reviews. And (unsurprisingly) consumers are more influenced by negative reviews than positive ones. A single negative review can chase away an average of 30% of prospects. On the other hand, more than half of those using review sites say positive reviews make them more likely to select a particular product.

There’s another — largely hidden — reason to crank up your presence on Yelp and Google Local. Google’s local search algorithm ranks businesses with reviews across its network higher in its search engine results than businesses with no- or few endorsements. Google considers product reviews as one indication of popularity. If your financial institution has no- or few reviews, your organic ranking will be downgraded.

After years of ranking among the top two banks in one particular Google search, a Liberty Bank branch dropped below competitors. But the office in question only had two consumer reviews. Both were five-star, but the low number of reviews likely contributed to that particular branch falling from the top tier. In response, Liberty Bank will be launching a campaign to boost the number of Yelp reviews, by adding a link to emails and marketing materials inviting customers to endorse the bank.

Before launching your own review monitoring program, be sure to create a social media policy that outlines objectives, responsibilities and the process for monitoring and responding to comments on review sites and other social media platforms. Closely monitor all review sites, responding warmly to favorable comments and sincerely to critical ones. Yelp is the most popular (and therefore most critical), followed by other players such as Google Local, Yahoo, Facebook and Angie’s List.

Some bankers can be pretty thin-skinned and reluctant to solicit commentary for fear of kicking up a hornet’s nest of criticism, but those who run well-managed institutions should have little to fear. Respond to critics honestly in a straight-forward manner, apologize when necessary, and politely refute any incorrect assertions. Don’t engage in back-and-forth, tit-for-tat arguments; take those kind of discussions offline. Remember, it’s better to listen and take corrective action than be surprised by a swarm of customers heading for the exit due to a bunch of bad reviews you may not even know about.

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