For a local service business I'd reply to every review, and the bad ones matter less than people think. Say a plumber gets a three star review about a late arrival. The reply that counts is the one a future customer reads before calling, because they're usually checking how the owner handles a complaint, not whether one exists.
Replying to five star reviews takes seconds and shows the profile is active, which can help with local visibility. The argument against is time. If you get 200 reviews a month across several locations, a generic thank you starts to feel hollow. My compromise is a real reply to anything with a complaint or specific detail, and a short personal one for the rest that mentions the service they booked. How are others handling volume on this?