Today, the internet has changed the way we purchase. Its given us as purchasers access to information about products and services, not just as provided by the purveyors of the products and services, but more importantly by others who have purchased those products and services in the past. No longer are our thoughts and perceptions of brands controlled by big marketing budgets, and message repetition. Instead, many of us now include looking at company and product/service ratings and reviews as a standard part of our purchase process.
Obviously, these 'ratings and reviews' have an impact, but just how substantial is the impact, and what are some of the elements that matter?
Below, we've pulled together a number of very interesting findings relating to ratings and reviews, and make recommendations about how these findings can be utilized for maximum benefit:
March 2011 Study By Lightspeed Research:
- - 62% of people read reviews online before purchasing*
- 62% of those surveyed trust other consumers' opinions
- 21% said 2 bad reviews changed their minds about a potential purchase, and 37% said 3.
- Only 7% of people, have turned to their social networks for reviews.
* I would forward that 'considered' purchases are researched online more frequently than the 62% would suggest, while 'impulse' purchases far less. In fact, the more considered the purchase, the higher the percentage.
In essence, this study reveals that yes ratings and reviews are important. It also highlights however that people search specifically for reviews via search engines, and surprisingly don't reach out to their social networks as often as we might have thought. The study also shows that its VERY VERY important to monitor and 'optimize' reviews of our companies online, because as few as 2 or 3 negative reviews can have a very negative impact on business.
The Retail Consumer Report (January 2011):
- - 68% of those who complained about a business were contacted after the fact by the business
- - 18% of those people/businesses were so satisfied with the business' response, they bought more
- 33% turned around and posted a positive review
- 34% deleted their negative reviews
The findings of this study are indeed interesting, and support the little known philosophy "clients who experience a problem, and have that problem rectified quickly, will become more loyal than those who didn't experience any problems at all". In essence it means, if a client has a problem and voices those concerns online via ratings and reviews, you don't necessarily need to change your business name. Instead, reach out to those clients, and attempt to rectify the issue. In 67% of the cases where this was considered in the study, the negative reviews were either deleted, or turned into positive reviews! Outstanding!
Positive Impacts from Negative Reviews:
Negative reviews aren't always the kiss of death for a company. Although there is little supporting statistical evidence due to the challenges of trying to quantify types of negative reviews, TechJournal published a great post called "Negative Online Reviews Can Create a Positive Effect", where they argue that some types of negative reviews make all reviews of the business more credible. More specifically, they state
"The authors found that when consumers receive negative information after receiving positive information, especially if that negative information is relatively minor and just blemishes the product, it accentuates the positive information"if its encountered after the positives and if the consumers are somewhat distracted."
Responding to Negative Reviews:
Recently, a number of sites accepting company reviews, began allowing companies to post responses to reviews. These potential responses are once again, opportunities. Ted Paff, President of Customer Lobby wrote a great piece for Mike Blumenthal's blog titled "Responding to Negative Reviews " Your Prospects are the Real Audience", which details the conditions in which you should respond, and guidelines for actually responding.
Other Interesting Findings:
Source: http://www.bazaarvoice.com/resources/stats
1. When asked what sources "influence your decision to use or not use a particular company, brand or product 71% claim reviews from family members or friends exert a "great deal" or "fair amount" of influence. (Harris Interactive, June 2010)
2. Consumer reviews are significantly more trusted -- nearly 12 times more -- than descriptions that come from manufacturers, according to a survey of US mom Internet users by online video review site EXPO. (eMarketer, February 2010)
3. 90% of consumers online trust recommendations from people they know; 70% trust opinions of unknown users. (Econsultancy, July 2009)
4. When making purchase decisions, North American Internet users trust recommendations from people they know and opinions posted by unknown consumers online more than advertisements on television, on the radio, in magazines and newspapers, or in other traditional media. (Nielsen Online, April 2009)
5. 84% of consumers said they were more likely to check online for reviews prior to making a purchase compared to twelve months ago, according to a recent survey by Brand Reputation. (Retail Bulletin, October 2009)
6. Customer reviews are the most effective social tactic for driving sales, followed by question-and-answer features and a Facebook fan page where companies post information. (Etailing survey of 117 companies, September 2009)
7. 63% of consumers indicate they are more likely to purchase from a site if it has product ratings and reviews. (Major consumer electronics retailer/iPerceptions study, January 2008)
8. MarketingExperiments tested product conversion with and without product ratings by customers. Conversion nearly doubled, going from .44% to 1.04% after the same product displayed its five-star rating. (MarketingExperiments Journal, July 2007)
9. Consumers were willing to pay between 20 to 99% more for a 5-star rated product than for a 4-star rated product, depending on the product category. (comScore/Kelsey, October 2007)
10. Nearly two-thirds of consumers (61%) use search engines to help them in their product research decisions leading up to purchase. (eConsultancy, July 2010)
11. Products with reviews have a 20.4% lower return rate than those without reviews. (Bazaarvoice PETCO Case Study, 2007)
12. Products with 50+ reviews have a return rate of 65% of those with fewer than five reviews. (Bazaarvoice PETCO Case Study, 2007)
Other Research:
13. 80% of user reviews are 4 or 5 stars out of 5 (Bazaarvoice, Forrester)
14. 24% use online reviews when deciding on purchases made offline (comScore, The Kelsey Group)
15. 63% of consumers indicate they are more likely to purchase from a site if it has product ratings and reviews (CompUSA, iPerceptions)
16. eSpares A/B test proved user reviews drove up to a 14.2% conversion increase.