- A full 85 percent of customers use online reviews to evaluate businesses.
- 8 consumers in a group of 10 rely at least partially on consumer reviews when making a buying decision
- 98 percent of American shoppers found internet reviews helpful while doing their holiday shopping
- 67 percent of consumers read up to six different reviews on a product before making a purchasing decision
- 84 percent of consumers expect a company to respond to an online review, comment or question
- 69 percent of customers research a product online
- 85 percent of customers are more inclined to make an online purchase if they can find an online recommendation
- 85 percent of customers likely to create a positive review if they are satisfied with a purchase
Why Reviews Count: The Influence of Customer Reviews
A full 85 percent of customers use online reviews to evaluate businesses. According to the recent surveys by BrightLocal, the number of customers using the internet for purchasing is growing every year, and with almost two thirds of consumers reading up to six reviews before buying any items, it’s not enough to be online – you have to be well respected online as well.
The Power of an Online Reputation
Like everything else on the internet, marketing strategies and trends in commerce have changed quickly – sometimes too quickly to effectively monitor and track. Ipsos Open Thinking Exchange found that 8 consumers in a group of 10 rely at least partially on consumer reviews when making a buying decision online. 80 percent of consumers rely on online reviews, and some companies haven’t yet realized they customers are posting reviews without their input
Companies who developed an online reputation management component to their business plan already know the nature of the online reviews and the power that they have over consumers. In fact, managing comments and reviews online about products and services has become a significant part of marketing.
"Many companies now have dedicated employees who do nothing but troll the Internet for corporate references, monitor chat rooms and online forums where there could be a discussion of the brand," said Tod Marks, Senior Editor of Consumer Reports. In the same interview, Marks explains that these same employees may also be monitoring large online retailers like Amazon to actively collect information and reviews from customers.
The effects of online reviews can be almost instantaneous, especially with the advent of smart phones. As Marks explains that "things tend to snowball" with online reviews – especially negative reviews. A customer is frustrated by slow service. She posts a quick rant on a social media website like Twitter and that rant is retweeted and discussed almost instantly by her followers – some of whom may also have negative experiences in the retailer.
This viral spread of reviews and commentary on companies quickly escalates into an online brand reputation that is almost exclusively controlled by customers. Even Stephanie Landsman, producer of CNBC’s Fast Money acknowledges that “customer reviews are carrying more clout than ever before.”
When 78 percent of customers rely on online reviews to help them make purchases, the outcome of a negative or unmanaged reputation online can be disastrous for businesses.
Which Reviews Matter Most
Generally speaking, it is every review that matters to consumers, but like so many things, some reviews matter more. Interestingly, the power of one reviewer over another can vary by the age, socioeconomic levels and even nationality of the consumer.
Start with the fact that an online survey by EXPO found that 98 percent of American shoppers found internet reviews helpful while doing their holiday shopping. Within that tremendous segment of the population, men and women do not always use reviews equally. Nor do different income brackets or age groups.
The Ipsos survey found that women are almost twice as likely as men to find online reviews “extremely helpful.” Likewise, more than twice as many shoppers under the age of 34 found online reviews extremely helpful when compared to their parents aged 50 and over. The trend in regard to age is simple – the younger and presumably more digitally savvy a customer is, the more likely he or she is to use online reviews in their purchasing decisions.
While this research speaks generally to the idea that reviews are used differently by different segments of the population, it does not address the actual reviewer. Another batch of research by LightSpeed Research Company, tells us that the origin of the review matters as well.
In the United States, consumers are significantly more likely to trust reviews by individuals they know or relate to. 62 percent of American consumers trust reviews by friends, families or colleagues. Only 50 percent of those consumers trust professional reviewers.
In the United Kingdom, however, the numbers are reversed. A full 64 percent of British consumers trust other consumers while 58 percent trust professional reviewers. Only 51 percent of consumers trust their family and friends.
There is a clear loser in both countries, however. In the United States, only 28 percent of would-be buyers will trust a review on a company’s website. In the UK this number is a dismal 17 percent. When it comes to online reviews, unassociated reviews hold significantly more value.
It goes without saying that good reviews are favorable when compared to negative ones, but just how much harm can a negative review cause? Most consumers are open-minded to a certain degree when considering a purchase. According to Bright Local’s research, 67 percent of consumers read up to six different reviews on a product before making a purchasing decision.
However, if a customer reads three negative reviews, it is enough to discourage purchase according to a large majority of consumers. But it may not take three negative reviews to influence a decision. 80 percent of consumers have changed their mind about an online purchase after reading any number of negative reviews. In fact, it may seem that negative reviews are far mightier than any of the positive variety. This is not the case, however.
According to research by Moving Targets, 85 percent of customers are more inclined to make an online purchase if they can find an online recommendation. More than half of all consumers can be swayed by a local business’ positive online reputation. Indeed, those customers who read reviews are 105 percent more likely to buy and they will spend on average 11 percent more than the non-review-reading counterpart.
That’s not to say that negative reviews don’t matter. In fact, they do matter substantially as does the way a particular company handles the negative publicity.
A negative review can spiral significantly, even with the best online management, and even if the poor comment seems to garner no special attention, the negative review can be affecting the purchasing decisions of the reviewer as well as others who simply read the review and make a decision accordingly while doing their own research.
Making Bad Reviews Good for Business
The battle against negative comments and reviews will never be completely resolved. The reason is straightforward – 95 percent of customers who are dissatisfied with a product are likely to create an online review as found by Dimension Research. By comparison, the same study found only 85 percent of customers likely to create a positive review if they are satisfied with a purchase.
But the individuals who post negative reviews have a larger potential not just for discouraging sales, but for encouraging them as well. Tom Liacas of the blog Social Disruptions explains, “Critics and haters build networks around corporate reputation and product issues that are a lot larger and more influential than those of company fans.”
According to Liacas, by converting these “haters” into pleased consumers, the subsequent positive review following a negative one will have a much wider impact than any initially positive review posted by another customer.
In fact, Liacas makes the case that “gripers, haters and critics are simply seeking a better customer experience”. Companies that subsequently provide this experience are utilizing a terrific marketing opportunity.
In fact, MIT’s Sloan School of Management recently revealed that often a brand’s most vocal critics have willingly taken on a role as a self-appointed “brand manager.” These individuals make it a point to identify shortcomings with a product to others in reviews and comments. While negative in connotation, these “brand managers” are actively following a company loyally and they are focused on improvement opportunity, thus providing an excellent source of information for companies willing to pay attention and utilize the feedback.
Whether a one-off remark or a persistent trend of comments, the trick to turning any negative review into something positive is in how a company acknowledges and addresses the concern. 84 percent of consumers expect a company to respond to an online review, comment or question. And if a company fails to respond it is noticed. 9 out of 10 consumers would be less likely to buy from a company that did not answer or address reviews and comments online or through social media.
Research by Moving Targets found that 80 percent of customers feel that companies who read reviews about their own products are more likely to see positive rewards.
Making Reviews a Focus
Companies who have a dedicated approach to online reviews and reputation management are utilizing techniques to maximize the return from positive reviews. These companies are also working to effectively manage negative reviews and comments and deliver a favorable result for each. There are a handful of things that must be acknowledged by managers.
- Consumers trust product reviews 12 times more than they trust product descriptions.
- 69 percent of customers research a product online.
- The number of individuals researching and the amount of time researching using reviews are increasing annually.
A forward-thinking business should encourage reviews. It must monitor online comments and reviews. And if done well, the company will ultimately see a terrific return on the investment.