The Dilution of Online Reviews

3 Min Read By Donald Burns

Once upon a time there was an idea for an online site where everyday people could go and write reviews about their favorite restaurant. Sounds like a great idea, right? And it was for a while. People seem to enjoy getting online and checking out reviews of their favorite restaurants or to research potential dining venues.

Enter Social Proof and GreedA study from UC Berkeley took a look at 148,000 Yelp reviews from 328 San Francisco restaurants and found out that an extra half star rating causes the restaurant to sell out 19 percent more frequently. Another study at Harvard Business School showed that a one-star increase in Yelp ratings leads to a five-to-nine percent increase in revenue!

What is happening here is what psychologists call a phenomenon known as social proof. Now social proof has been around as long as humans have been trying to sell things to others. It’s the testimonials and the referrals. It’s the toothpaste ad that you see on TV saying that four out of five…