What’s The Deal With Online Reviews?

Published on May 5, 2017 by Alex Eade

The Problem With Trust

Trust is the most important thing to most businesses. The trust of clients, customers, and consumers. The trust of stakeholders. The trust of shareholders. The trust of the general public. Nobody is in any doubt that without trust, a business would probably have to cease doing business fairly quickly – either that, or turn things around, sharpish.

Trust isn’t a tangible thing, and as such it is quite hard to measure, but IPSOS MORI make a pretty good stab at it, in their Veracity Index. In 2016, the annual IPSOS MORI Veracity Index found that 68% of the public would trust their hairdresser to tell the truth, and 65% would trust an ordinary man or woman in the street. On the other hand, only 24% of the general public in the UK trusted Journalists to tell the truth. Business leaders only fared slightly better than this, with a 33% trust rating (2% less than the previous year)– meaning that 67% of the British public do not trust business leaders to be truthful. This is potentially a massive headache for businesses, because they have to market and sell their products and services to a general public who are not trusting of them. Not the best position to be in!

If trust is vital to a business, and people don’t trust business leaders, then businesses have to think of other ways to improve their trust levels. One tried and tested way of doing this is to harness the trust that people have for the ordinary man or woman on the street, and superimpose this trust onto the business, through the utilisation and promotion of positive online reviews. Online reviews have been found to be trusted by 70% of people and in 2016, a study by Salesforce found that online reviewers were more trusted by people than their friends and family. Clearly, the online reviewer carries a lot of clout!

The History of Online Reviews

Before online reviews were even conceptualised, word of mouth and product reviewing was on the radar of marketers and businesses. In 1982, Mizerski discovered that negative reviews affect people’s decisions much more than positive ones. If you get a rubbish haircut and tell your friends about how awful it was then they’ll probably never go there, for fear of a wonky fringe and dubious highlights. However, if you go out for dinner and the waiter is friendlier than a golden retriever puppy and you get a free chocolate fondant, then your friends might go there, but then again, they might not. Basically, good reviews are good, whilst bad reviews are very very bad for business.

Online reviews have been around since the late 1990s, with the tentative first steps of online reviewing being taken by three websites – RateItAll.com, Deja.com, and Epinions.com. In the present day, online reviewing is a really, really big thing. Websites like Amazon show their reviews right at the top of their product pages, and products are reviewed by thousands of people daily. Socialbarrel.com found that the average consumer looks at 11 online reviews before they make their purchase decision. They also note that a high rating on products will increase the likelihood of buying the product or service for 55% of customers.

Negative Online Reviews

By 2001, academic research into online reviews was kicking into gear. Patrali Chatterjee found that negative online reviews affected people more if they were not familiar with the retailer, or if the retailer was purely an online business. This is common sense really – if you’ve been buying the same woolly socks from the same online business for the last 3 years, and then you see a review saying, ‘these socks aren’t woolly enough’, then you probably won’t listen to it and will carry on buying your trusty woollen socks, because you’re already familiar with the brand. If, however, you’ve never bought woolly socks from the brand before, and you see the same review, you might steer clear and visit woollysocksRus, instead.

In 2008, Quiang et al looked into the impact of online reviews on hotel room sales and found a significant link between the business performance of a hotel and the online reviews that it got. Basically, if you own a hotel, and people leave you bad reviews then you’re likely to see a dip in takings, because people trust the opinions of other people, and don’t want their holiday ruined by scratchy bed-sheets and a continental breakfast that tastes of cardboard. There are dozens of ways for people to leave online reviews for hotels and holidays, one of the most famous being Trip Advisor. Founded in 2000, this website now employs around 3,000 people and makes over a billion dollars a year – it would seem that there’s big business in online reviewing!

Online Buzz and Chatter

Also in 2008, Duan et al studied the effect of online reviews on movie box office revenues, and was surprised to find that the rating score of the reviews didn’t really affect how much money the films made, but the amount of online reviews about the films did. More online reviews and more online chatter surrounding a film significantly influenced box office sales. So, the more that people talk about something online, the more awareness there is about it, and consequently, the more people buy into it. It’s all well and good having a couple of five star reviews of one of your products on the product page of your website, but this isn’t necessarily going to drive sales. What will drive sales, is the creation of an online buzz around that product, where lots of people start reviewing it and conversing about it on forums and social media sites. This has been seen more and more in the rise of social media influencers and opinion leaders, many of whom are often asked to partner with a brand in order to review products and create this online chatter.

An article by Guy Bergstrom suggests that influencers are seriously important commodities for marketers nowadays, because people who listen to what they have to say, and are often swayed by their opinions. These people are the common man or woman on the street, that 65% of the general public trust, but with an edge. The edge that they have is their captive audience. Most influencers have high levels of social media followers, many of them have blogs that are read by thousands of people, and lots of them also vlog and review products through video format. Their audience trusts them, and therefore trusts their opinions about products and services. The business that works with the influencer can tap into this audience vicariously through them, and the online reviews provided by the influencer will carry a great deal more clout than anything the businesses’ marketing or adverting department could promote. Influencers often do not review products for free, and it was estimated that in 2014, at least 10% of online reviews had been paid for. In general, paying for online reviews is not advisable- paid for reviews often lose the trust of web users, thus eroding the trust that businesses have worked so hard to get.

Are Online Reviews The Be All and End All?

By 2016, there was an almost universal consensus that online reviews are either the make or break of a business. Most businesses use them, most potential customers read them, and most marketers push for the promotion of positive online reviews.

However, it’s not necessarily as simple as: ‘good online review = higher purchase rates’. Ewa Maslowska et al threw some doubt onto this widely held belief with research suggesting that online reviews may be too good to be true. They studied websites selling light bulbs, women’s trainers, and vitamins. Quite a mixed bag! Their findings highlighted that having positive online review ratings doesn’t automatically mean higher sales. They also discovered that results could be nonlinear – the probability of online purchase increased with the online rating to about 4.2–4.5 stars, but then dropped off.

Moreover, as we’ve already stated, some companies are resorting to paying for their reviews- either by partnering with influencers or simply paying average joe a couple of quid for a sentence about how great his new lawnmower is. Some companies are even using fake reviews (a bit like fake news, except Donald Trump doesn’t tweet about it)- a practice that could seriously damage the trust that people have, not only in the reviews that are bought, but in all online reviews in general, especially if this practice becomes more widespread. Consumers aren’t silly, they don’t like the wool being pulled over their eyes, and they won’t convert on websites where they feel that this is happening. Essentially, if you want to retain a good reputation, you should stick to organically accumulated online reviews.

Would We Suggest Using Online Reviews?

In a word, yes. The research generally points towards them being a successful way to influence a user’s perception of the website that they are looking at, as well as them being an important contributor to website conversion rates. We would suggest that online reviews are very important to businesses, especially if you are selling a product or service online. An important thing for you to remember is that having lots of negative reviews is problematic (people expect to see one or two), and they are potentially much more detrimental than positive reviews are helpful. If you get negative reviews, try to respond to the reviewer, offering them a solution to their problem – depending on how good your response is you can turn a bad review around. Furthermore, paying for reviews, or pressuring customers to leave a review, is not a good tactic and will very rarely result in better website conversions.

We would always suggest that websites which sell products online should have a way for customers to leave reviews on the site. Not only does this help to inform other users, but it also offers you a fantastic way to gather data about how your products/services are received. We would also like to stress the importance of reviews offsite, in forums or through tools such as Google Reviews.

By Alexandra Eade, Content Manager.