Online User Reviews

Author: Timothy J. Hull

May 2008

If you spend any significant amount of time on the Web, you’ve probably used it to research products and more than likely ended up buying something either online or in-store that you researched online. One tool that continues to skyrocket in popularity due to its very high credibility level is user-generated reviews.

More and more consumers are regarding user reviews as critical pieces of information that are driving their purchasing decisions, and they are actively seeking them out. However, if you are on the other side of the table and are running an e-commerce website or offer any sort of link-to-buy function on your site, you most likely do not offer user-generated reviews. The primary issue is that user reviews by nature put the user in control of the message and take it out of the hands of marketers. This is exactly why user reviews are so popular and is also the reason that they make marketers very nervous.

A recent study by Deloitte showed that 62% of U.S. Internet users read product reviews written by other consumers. And not only do a majority of U.S. Internet users read user reviews, but as eMarketer reports, consumer-generated reviews are viewed as either somewhat or very credible by 99% of U.S. Internet users. Deloitte also conducted a separate study that showed 42% of U.S. online shoppers thought that featuring consumer reviews on websites increased consumer trust in the sites and presumably the products on the site.

Not only are a majority of people reading user reviews and nearly all users believe they are credible, but a report from JupiterResearch showed that in a study of online social network users, consumers were three times more likely to trust user opinions than advertising when making a purchase decision. The Deloitte study also showed that more than 80% of users who read consumer reviews were “influenced” by those user reviews.

In addition to enhancing credibility, building trust and influencing purchase, user-generated reviews can also:

•    Improve search results because reviews add a greater volume of site content and are updated frequently
•    Become syndicated content
•    Provide feedback to the company on the cause of negative reviews

With all of these benefits, you would think it would be an easy decision to offer online user reviews. However, more than 66% of U.S. e-commerce sites do not offer consumer-generated reviews, according to an August 2007 study by Vovici. Many times, marketers are not willing to give up control of the messages on their site in fear of negative reviews. But according to a Bazaarvoice trend analysis, product and service user reviews are very positive the majority of the time, with an average product or service rating of 4.3 out of 5. In the study, Bazaarvoice found that of those people who had contributed one or more online reviews, 36% were positive every time, 51% were positive most times, only 1% were negative most times and only 1% were negative every time. An eMarketer study backs up the fact that the vast majority of consumers are not looking to seek revenge on a retailer when developing reviews. In fact, in the study, 9 out of 10 reviewers posted reviews to help others make better buying decisions and close to 80% posted reviews to reward a company for a good buying experience. Other studies have shown that even when reviews are negative it's not necessarily a devastating situation. Actually, allowing the posting of negative reviews increases credibility for the seller and the product or service being offered. Allowing the posting of negative user reviews rather than filtering or excluding them demonstrates that the reviews are legitimate, which can lead to an increase in purchase intent.

Even with the potential for negative posts, consumer-generated product and service reviews should be a “best practice”, “must-have”, “price to play” and any other cliché you want to use, in order to optimize the performance of any product or service website. The potential upside far outweighs the risk marketers take when they allow consumers to post opinions. While the overall percentage of sites offering online reviews is still low at around one third of sites, online retailers are slowly beginning to accept these risks. Nearly one-quarter of the businesses included in Internet Retailer's "Holiday Sales Expectations" study conducted prior to the holiday 2007 season said they had added customer reviews to their websites for the holiday season. This percentage was third on the list of additions, lagging only order tracking and faster checkout.

The marketing world has changed over the last five to ten years and will continue to change at a very rapid pace. One of those important changes is the level of control consumers are demanding from marketers. Consumers want 100% transparency in product and service quality and pricing whenever possible. One aspect of transparency that consumers are seeking is the first-hand knowledge gleaned from real-life users of products and services communicated in the form of user-generated reviews. Consumers are actively seeking out user reviews when researching products and services, and multiple studies have confirmed the benefits to both the consumer and the marketer. The question is - are you willing to give up some control to win a new customer?

Timothy J. Hull is President & CEO  of TDH Marketing, Inc., a Dayton, Ohio-based marketing firm with alliances and joint ventures in the U.S., England, and Singapore that support its global client base. The firm provides strategic, marketing, operational, and communications planning and implementation for both large and small corporations looking to develop profitable, technology-driven business growth.