It’s ironic isn’t it? As kids we were taught “don’t talk to strangers” and “don’t take advice from someone you don’t know.” But now, simply one online review from a stranger can completely influence your decision of which coat to buy or where to get a haircut.
If you’re like me – you know always read the reviews first. The reality is that it’s not only you and me, but 90% of consumers read online reviews before visiting a business. What is even more shocking, is that 88% of consumers trust online reviews as much as recommendations from relatives and friends (Murphy 2019). With the emergence of online platforms, more and more people can share their experiences with the world, in just a click. As such, online reviews have become a critical factor in determining whether a business will be successful.
Why do they matter so much?
It is no secret that companies no longer control their brand reputation, consumers do. In fact, almost all – 95% — of customers do research online before making a purchase (PowerReviews 2014). Online reviews have made their way into the decision-making process of customers and are greatly influencing the outcome. For business, this means that before you get to provide any kind of service or value, customers have already made up their mind about what they think of your business. Thus, having a strategy in place on how to positively influence online reviews can boost sales (Vidrih 2018).
Online reviews don’t only drive purchases but can also make your business more visible. Getting more reviews is crucial to increase the visibility of your business. Search engine algorithms take into account the relevance of your customer reviews, which means your search engine ranking will improve leading to greater online exposure. A study showed that an increase from three to five stars can result in 25% greater online visibility (Wallace 2019).
With greater visibility, comes trustworthiness. Surprisingly enough, customers perceive a business to be more credible and trustworthy if they find a variety of reviews (both negative and positive), than when only a stream of highly positive reviews exist (PowerReviews 2014). Negative reviews can actually positively influence customers perception. So how should businesses deal with negative reviews? A study conducted by The Spiegel (2017) showed that when a firm replied to negative reviews, a third of customers deleted their original review or replaced with a positive one. Interacting with customers online provides firms with a strategic advantage by creating a personalized interaction and engaging directly with customers to acknowledge their opinion.
Creating a business strategy around the power of online reviews will help firms to optimize their customer experience and create a strong online presence.
Recommendations for businesses:
1. Display reviews and ratings of the different products on the website.
2. Embrace negative reviews: they can help establish credibility and legitimacy.
3. Encourage customers to post online reviews: you will be able to increase your visibility and receive constructive feedback on your products or services.
Looking at different studies and data, one thing is clear: reviews hold an immense power over the success of businesses.
Will strangers determine your next purchase too?
References
Murphy, R., 2019. Local Consumer Review Survey: How Customers Use Online Reviews. [online] BrightLocal. Available at: [Accessed 4 October 2020].
PowerReviews, 2014. The Power Of Reviews. [online] Available at: [Accessed 4 October 2020].
The Spiegel, 2017. How Online Reviews Influence Sales. [online] Spiegel Research Center. Available at: [Accessed 4 October 2020].
Vidrih, A., 2018. The power of online reviews. [Blog] Futourist, Available at: [Accessed 4 October 2020].
Wallace, B., 2019. Leveraging The Power Of Online Reviews. [online] CMSWire.com. Available at: [Accessed 4 October 2020].
Hi Carolina, I never thought about it like that! Strangers do indeed determine what I buy or where I go to have dinner. Your point about online reviews being more relied upon than relatives or friends also had me chuckling. I guess this is also dependent on your perception of that relative’s knowledge, as well as whether you take the time and effort to ask all your friends if they have been to a particular restaurant. Online reviews are super accessible, and whenever a customers review a certain product or service, I believe you assume they at least have some point of reference. The wisdom of the crowd is another concept relevant to such trust in reviews. It is known that from a larger pool, the average perception will be more accurate. Your friend might have just come on a bad day, or tried the wrong meal on the menu. All in all, it’s a funny thing, inherently relying on a pool of strangers for trying new products and services. Cheers!
Hey Carolina! Thank you for your insights; it is a very interesting post and you bring up a lot of important points of how businesses should deal with online reviews. I definitely agree with the three recommendations you have proposed. However, I cannot help but wonder if the third point could perhaps be expanded on a little bit.
Encouraging customers to post reviews is definitely important. However, it appears to be very common for customers to only feel the need to comment when they experienced a particularly negative or particularly positive service or product. It makes them act out of emotional appeal, which then leaves very little need for the company to encourage them to leave a review. Rather, I believe companies should focus on gathering more reviews from the people with experiences that come down to a roughly average rating. These clients are the ones that act from rational appeal rather than emotional appeal as their affect has not been triggered by the situation. By gathering more reviews from the “average” customer, an even better overall picture will be drawn from the overall perception of the service or product. It will take more resources to make these customers leave reviews, however. I suppose businesses could make use of giveaways, discounts or other services in return for the time customers invest in their review.
What do you think; should businesses focus more on gathering additional reviews from average customers or should they balance the efforts of getting reviews for all customer groups equally?
Hi Carolina,
First of all, very interesting read! The moment I saw the title of your blog “The Power of Online Reviews” I knew it was a topic that would sound familiar to me. It it indeed strange to think that we use strangers to determine where we do and do not go to or which products we do or do not buy. For example, every time I go on a trip and need to find a good restaurant, I also read blog posts or online reviews to see if the restaurants have a good rating or not.
Furthermore, I agree that companies should embrace negative reviews. In my opinion, a company has higher credibility if they respond on their negative comments and try to improve the relationship with customers that had a negative experience compared to when they ignore the negative comment.
Regarding your fact that 88% of consumers trust online reviews as much as recommendation from relatives and friends, I was really surprised! I was wondering, is this also the case for you? Do you trust online reviews as much as recommendation from relatives and friends? Most of the time, I listen to their recommendations and often go to places or buy products that they recommend. Last of all, I was curious if you expect that this will change in the future? Or will we rely even more on online reviews than we do nowadays? I think both companies and consumers will keep relying on online reviews and that it will become even more important in the future as the internet makes it really easy for us to make comparisons.
Hi Carolina,
Funny to read your article, as it is really applicable to any of us to trust reviews rather than the people we know. What I always try when reading reviews before I go somewhere, to turn a bit of a blind eye on them. Not only because I know that everybody has a different taste, style or liking, but also because people have different perceptions. Like Laura said, the person writing a review could have just had a bad experience or a bad day, but that does not imply that the same would happen when you visit the place or buy the item. Moreover, I often see the reviews leaning towards the negative side, and think that this is for the following reason. How likely would it be that you write a review after you had an ‘average’ dinner? Not that likely. How likely would it be that you write a review after you had a ‘good’ dinner? Probably a bit more, but still not that often (me personally at least). And how likely would it be that you write a review after you had a ‘bad’ dinner? Most likely. Therefore, it could be that reviews are unjustified towards the negative side, as the people with positive experiences are not as likely to comment. This is something that, in my opinion, is often overlooked when reading reviews.
Best,
Cas