The psychology
Why social proof from reviews changes purchase behaviour
Social proof is the psychological phenomenon where people assume the actions of others reflect the correct behaviour. In a purchasing context: if many people have chosen this business and reported a positive experience, it is probably a good choice. The more people who have done something, the more confident an individual feels doing the same.
Reviews are the most widely available and most widely trusted form of social proof for local businesses. Unlike celebrity endorsements or company claims, reviews come from ordinary customers in similar situations to the person reading them. This peer similarity makes review-based social proof particularly persuasive.
The conversion rate impact of social proof from reviews operates through three psychological mechanisms: uncertainty reduction (if others have done this and report it positively, I am less uncertain about doing it myself), risk reduction (something has gone wrong for others and they had recourse), and identity validation (people like me have chosen this).