It is widely recognized that consumers are influenced by the opinions and conduct of other people when they make a purchase decision (Zhang et al., 2016). In the past, consumers had to rely on word-of-mouth information (WOM) from family, friends and co-workers. If these others did not have experience with the product or company, consumers had to depend on consumer organizations or just use the advertisements or product information provided by vendors to make a decision (Hua et al., 2012).
With the rise of the internet and the development of online review sites everybody can post reviews, and consumers can draw conclusions based on them. eWOM as this information is called, is defined as any positive or negative statement made by people about a product or company, which is made available to a others via the Internet (Banerjee, et al., 2017). Online reviews have become a very important source for consumer decision making, especially for online purchases where ninety percent of online shoppers uses them (Zhang, et al., 2014).
As these reviews are used by almost all shoppers (online) for their purchase decisions, companies try to get as favorite reviews as possible. However, they not always try to achieve this by offering great service or products, but by manipulating reviews (posting reviews themselves) or try to entice consumers to post (more positive) reviews (Hua et al, 2012). Examples of the latter are companies offering discounts to clients that will write a positive review, while other businesses even offer small amounts of money when consumers post (positive) reviews.
Recent academic research provides some interesting insights into this phenomenon. Pavlou & Wang (2015) found a u-shaped relationship between the amount of rewards and the review quality of a Chinese online retailer. Offering monetary incentives can decrease the quality of reviews, while increasing the amount can increase the quality. Chen et al. (2017) conclude that consumers lose faith in the truthfulness of the reviews if vendors offer discounts.
Other researchers found that once a Chinese company offered a small amount of money (25 cent) for a review, the number of reviews decreased by thirty percent. Especially worrying for companies is that the consumers with the largest online social network were the people to write the least number of reviews after the monetary incentives were started, while they on the contrary were the ones who wrote a more than average number of reviews before. Reason for this behavior was that these people feared social disapproval or being questioned about their motives (Sun et al., 2017). Finally, Burtch et al. (2017) found (again in China) that monetary incentives could increase the number of reviews, but that those reviews are quite short in length. Social norms (e.g. showing the number of people that have written a review already) however led to longer reviews. They proved that combining monetary incentives and social norms resulted in more reviews of greater length.
We can conclude that companies should be very careful when they want to encourage consumers to write product reviews by offering monetary incentives, because it can inhibit consumers to post reviews while also the quality and length of reviews can be negatively influenced by it.
References:
Banerjee, S., Bhattacharyya, S. & Bose, I. (2017). Whose online reviews to trust? Understanding reviewer trustworthiness and its impact on business, Decision Support Systems, vol. 96, p. 17–26.
Burtch , G., Hong, Y., Bapna, R. & Griskevicius, V. (2017) Stimulating Online Reviews by Combining Financial Incentives and Social Norms, Management Science, article in advance.
Chen, L. Jiang, T. Li, W. Geng, S. & Hussain, S. (2017). Who should pay for online reviews? Design of an online user feedback mechanism, Electronic Commerce Research and Applications, vol. 23, p. 38–44.
Hua, N., Bose, I. & Koh, N.S. & Liua, L. (2012). Manipulation of online reviews: An analysis of ratings, readability, and sentiments, Decision Support Systems, vol. 52 (3), p. 674-684.
Pavlou, P. & Wang, S. (2015). How Do Monetary Incentives Affect Online Product Reviews and Sales? Twenty-first Americas Conference on Information Systems, Puerto Rico, 2015.
Sun, Y., Dong, X. & McIntyre, S. (2017). Motivation of User-Generated Content: Social Connectedness Moderates the Effects of Monetary Rewards, Marketing Science, vol. 36 (3), p. 329-337.
Zhang, K.Z.K., Zhao, S.J., Cheung, C.M.K. & Leed, M.K.O. (2014). Examining the influence of online reviews on consumers’ decision-making: A heuristic–systematic model, Decision Support Systems, vol. 67, p. 78-89.
Zhang, Z., Zhang, Z. & Yang, Y. (2016). The power of expert identity: How website-recognized expert reviews influence travelers’ online rating behavior, Tourism Management, vol. 55, p. 15-24.
