1. Shows that people have bought the book and read it.
2. Shows credibility. It shows that there is some merit to your work and that you are actually working. Many authors have chosen to self-publish or work with a small, indie publisher. There are many reasons for that, but those authors need as much help as possible to get their book noticed.
3. Help boost rankings. I noticed when someone posted a review of my book one day, my rankings on Amazon went up over 100,000 points. (Yes, many days I am at that level in the rankings, along with many other talented authors.) The higher an author's rankings, the more visible their book is. The more people that see that book, the more likely there are to be sales.
4. Help potential buyers make a decision. Most reviews on Amazon are from honest people, simply wanting to give their honest opinion. Before I buy something I always read the reviews. Unfortunately, sometimes Christian fiction is a little sketchy. I don’t like swearing and sex in books I read. By looking through other people’s reviews, I can determine if it is a book I might enjoy or not. If there is sex in a book and other prudish people like me have already read it, they will be more than happy to let others know.
5. Don’t limit your reviews to Amazon. Have readers post reviews wherever your book is sold. This reaches a wider expanse of customers.
If you are an author, don’t be afraid to ask your readers for reviews. I have found that most people don’t mind, but they often forget. Make it easy for them by posting a link directly to your book listing. A simple and general reminder isn't a bad thing. I often encourage people to post reviews of other authors' work as well, especially during free download periods.
Reviews have a purpose and they are extremely important to both the author and a prospective buyer.