Editor’s note: Sara Spivey is CMO of social media SaaS company, Bazaarvoice, Austin, Texas. This is an edited version of a post that originally appeared here under the title, “Why reviews do still matter – now, even more.”
Recently, a study by the University of Colorado at Boulder caused quite a stir in the digital advertising, commerce and media worlds about the relevance and value of online reviews.
Bart de Langhe, author of the study and professor of marketing at CU-Boulder’s Leeds School of Business states, “The likelihood that an item with a higher user rating performs objectively better than an item with a lower user rating is only 57 percent.” He continues, “A correspondence of 50 percent would be random, so user ratings provide very little insight about objective product performance.”
The study’s basic premise is that since the average person has a hard time evaluating the objective quality of a product (without multiple alternatives and extensive side-by-side testing as is done in Consumer Reports), in-market shoppers may rely instead on price or brand as better cues for quality. It also states that “average user ratings lack convergence with Consumer Reports scores are often based on insufficient sample sizes, do not predict resale prices in the used-product marketplace and are higher for more expensive products and premium brands.”
Finally, it concludes: “Consumers’ trust in the average user rating as a cue for objective quality appears to be based on an illusion of validity.”
While many of our expert findings align with some key components of the report, it’s important to clarify what all this means to the consumer, brand or retailer, and share some deeper insights.
- Multiple information sources add to consumer confidence. Even though the study says people are more likely to evaluate a product they feel strongly about and that feedback may be disproportionate – in other words, moderate opinions may be underrepresented online in favor of reviews by product lovers and haters – we have found that shoppers who interact with reviews are 104 percent more likely to buy. And if they see both reviews and consumer Q&A, that likelihood jumps to 166 percent.
- Seventy-one percent of people read consumer reviews before making a purchase. As older and younger generations adapt to and use more online media (PC, tablet or mobile) they are more likely to research online what they buy offline – whether it’s roofing materials or running shoes. Then, once in-store, they may see a poster or print ad featuring some of the same online review information or star-ratings that further influences their buy. Nielsen reported that consumers are more likely to take action based on online consumer opinions (70 percent) over anything other than personal recommendations (84 percent).
- More volume is better. This one is fairly self-explanatory. The higher the review volume and average rating, the more orders our Internet retailers receive.
- Seven out of 10 U.S. consumers have questioned the trustworthiness of reviews across the Web. The study goes on to state that 5 percent of reviews are fake and are posted by employees, competitors, consumers who receive incentives or someone who has never used the product at all. We also found that 44 percent of U.S. consumers said they would be more trusting of reviews if presented with a trust mark and an accompanying description of anti-fraud policies.
- There is great benefit to both five-star and one-star reviews. In keeping with our core value of authenticity, we believe that when consumers read reviews – however positive, negative or average – they gather more detailed information that helps tailor their shopping decisions to their individual needs and desires. For example, they might learn more about an exact size, fit or shade in a shoe or whether a hotel room is safe and clean (vs. luxurious and spacious).
- No matter what your generation, reviews matter. Although 51 percent of Millennials don’t want a parent’s or peer’s help and actually prefer product reviews from people they don’t know, 66 percent of Boomers still tend to trust the advice of people they do know – such as friends or family members. Today, we’re holding more computing power in our pockets than used to be on most mainframes. And for many in developing countries, the smartphone will be their first computer and sometimes their only device with an Internet connection. And in less than two years, our smartphone may be our only computer.
As more and more of us shop offline or online and connect – whether via smartphone, tablet or PC – we immediately expect to find best prices, locations, sizes, colors, styles and see what others are saying about a potential purchase rather than wait to read the next issue of Consumer Reports. We want instant information – both in-store/offline and online. Every review does matter.