Warren Buffet once wisely said, "It takes 20 years to build a reputation and five minutes to ruin it." The same general concept applies to the competitive online world that's vying for the preference of consumers, and it points to an important business practice that is sometimes overlooked.

Money is often made by way of reputation. It's why prominent brands, such as Nike or Johnson & Johnson, are able to rake in millions year after year; their reputations have created a loyal following of lifelong customers. Lifelong customers are by far the most profitable, and they gravitate towards reputable brands that are consistent in product and/or performance.  

Every customer transaction and experience results in a review. Even if it doesn't get posted online somewhere, every person who comes in contact with your brand has a review of your service and their experience. And while the occasional bad review might not seem like such a bad thing, you can see the importance of consumer opinions when you look at the hard facts concerning reviews.

Studies have shown that 88% of consumers trust online reviews as much as a personal recommendation. Good reviews, bad reviews, and downright ugly reviews, whatever is posted online about your brand might as well be coming to your consumers from their next door neighbors. That makes it even harder for those consumers who are actually looking for a neighborhood or nearby brand/business, because 92% of consumers read online reviews specifically for local businesses.

At 88% and 92%, the overwhelming majority might seem like one of those statistics that can easily be overlooked, but here's a real life example of just how important online reviews are: Last week, I had a knot in my back that I couldn't stretch out. While wiggling around uncomfortably before I went to sleep one night, I searched for local massage therapists from my Phone. Despite knowing the more reputable places to get a massage, I read the reviews of some smaller, more affordable places just to compare. It came down to two local businesses, and I made my decision based on the number of reviews. One massage therapist had a handful of great reviews in which customers said they would continue to purchase massages from there, and the other had only a few reviews that said things like, "Great!!!"  While this may seem like a roundabout way of explaining something, this is actually how many users conduct their searches and how many local businesses get their foot traffic: by looking at the experiences other customers have already had.

Bearing that experience and the aforementioned numbers in mind, here are a few things you should keep in mind about customer reviews:

No reviews can be just as bad as bad reviews. In fact, user/customer reviews are so prevalent online that not having any whatsoever can look a bit shady. Ask your customers-especially satisfied, returning customers-to post reviews highlighting their positive experiences. That, coupled with their word-of-mouth recommendations, can potentially generate a lot of traffic for your site or business.

Don't ignore bad reviews. It doesn't take much to get online and see that a brand's management of a poor review is far more impressive than ignoring it. More than half of customers expect a response to their feedback/reviews, especially the ones who had a poor experience. To manage a bad review, start by leaving a sincere, professional reply that A) apologizes for whatever prompted the bad review, B) thanks them for their feedback and assures them of your commitment to performance, and C) takes it offline. Close the response with something to the effect of, "We'd love to make it up to you and get more feedback so we can learn from your experience. If you're comfortable with it, send your contact information to jane@xyz.com and a member of our team with contact you as soon as possible." You might also consider giving the disgruntled customer some kind of reimbursement or deal to soothe their dissatisfaction. It's simple, shows you care about your customer's experience, and takes the altercation to a private message. 

Reviews will positively affect your site's search engine ranking. Aside from satisfied customers leaving warm fuzzies on your behalf, reviews are also nice because it helps with that whole content-is-king situation. Each review is a piece of authentic content that acts as a kind of vote for your website/business. The review content that comes from users then gets microformatted by Google and gets indexed as a "rich answer." Google gets happy, search engine rank improves, and you get to see what your customers think about your performance.