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​How Consumers Really Use Online Reviews

Published on: 25-Oct-2020

Do online consumer reviews really matter? Yes, but in ways that might surprise a lot of people.

A moderately worded four-star review, for instance, can sometimes be more persuasive than a five-star rave. People pay more attention to reviews written using mobile devices. And talking about previous purchasing mistakes makes a reviewer seem more trustworthy.

These are just some of the conclusions from recent academic research on consumer reviews. As more and more shoppers choose to block online advertisements and tune out companies’ messages, they are increasingly relying on reviews to help them make buying decisions—with a big impact on companies’ bottom lines. An increase of a single star in an overall rating on review site Yelp.com boosts a restaurant’s revenue by 5% to 9%, according to research by Michael Luca, an associate professor of business administration at Harvard Business School.

“If anyone doesn’t realize the value of online reviews and word-of-mouth, they are not understanding how to do business in a digital world,” says Lauren Grewal, assistant professor of marketing at Dartmouth College’s Tuck School of Business.

Here’s a closer look at what the latest research shows about what customers are looking for with online reviews, what makes them trust a particular review, and what makes them pull out the credit card and place an order. 

When a 4 is better than a 5

If you’re selling a product, which would you prefer: a glowing five-star review or a moderately positive four-star one? 

It turns out that the four-star review can sometimes be more persuasive. What matters most is whether the review deviates from the crowd.

Daniella Kupor, assistant professor of marketing at Boston University’s Questrom School of Business, gave volunteers a chance to buy a product with a slew of
five-star reviews. Participants were shown the most recent review, which in some cases was another five-star write-up, and in others was a more moderate rating of four out of five. The moderate review persuaded 19% more people to buy.

“We found that when people saw the four-star review, they thought that the reviewer was more thoughtful and that the reviewer’s evaluation was more accurate,”  says Prof. Kupor. As a result, they were more interested in trying the product.

The lesson from this research? 

“One implication is that marketers might potentially increase sales by featuring reviews that have obviously deviated from the default,” Prof. Kupor says. Highlighting thoughtful reviews also could boost sales, she says. “A very thoughtful, moderately positive review can more greatly persuade people to purchase a product than an extremely positive review that clearly didn’t result from a lot of thought.”

Mobile reviews boost sales

People are more likely to buy a product after reading reviews written using a mobile device, according to research by Prof. Grewal at Dartmouth.

In the study, participants were shown moderately positive hotel reviews with identical text, the only difference being that some reviews were marked as having been written “via mobile.” Those who saw the reviews written on mobile devices were more likely to consider staying at the hotel than those who read the desktop reviews.

Why? Because people thought it took more effort to write a strong review on a mobile device, the study found.

“When things are seen as more effortful, they typically are seen as being higher quality, and in this case it increased the perceived credibility of the review,” says Prof. Grewal.

Companies could encourage customers to write reviews on their mobile devices, she suggests. And websites that don’t already indicate whether a review was written on a mobile device should consider adding that information. The good news for companies is that while the mobile effect amplifies the impact of positive reviews, the research didn’t find a similar effect for negative reviews. 

Mistakes increase trust

It turns out that people pay the most attention to reviewers who admit that they’ve made mistakes when buying similar products in the past. “What it signals is that because you’ve made the mistake, now you’re motivated to not make another one,” says Taly Reich, associate professor of marketing at the Yale School of
Management. “A mistake motivates us to learn more about the category, and to invest the time and resources to do that.”

One of Prof. Reich’s experiments involved showing people reviews of Altoids mints, and then offering them either a box of mints or a payment of $1. Only 22% of people chose the mints over the money when reading reviews that made no mention of mistakes in previous purchases, but for those reading reviews that did
mention mistakes, that number jumped to 35%.

“The biggest takeaway for companies is in terms of what reviews to feature,” says Prof. Reich. “Just look at the reviews you have and select ones that refer to a previous mistake, and you can feature those ones or bump them up to drive more sales.” Doing so could give a company a leg up on the competition: Prof. Reich
surveyed experienced marketing professionals, and most of them thought that hiding mistakes would result in more sales.

Turn negative reviews to your advantage

Every business owner dreads receiving a vicious, unfair one-star review. But new research shows that instead of being put off by those harsh reviews, many customers end up empathizing with the company and being more likely to buy its products.

“If you get unfair negative reviews, don’t try to hide them,” says Thomas Allard, assistant professor of marketing at Nanyang Technological University in Singapore. “Our research shows that people tend to have a positive response, especially whenthe reviews are followed by a very personalized response from the company.”

That doesn’t mean that all onestar reviews are good, of course—the empathy effect only kicks in when people see a review as unfair. That tends to happen when the reviewer is complaining about something outside the company’s control or making excessive demands. According to Prof. Allard, a quarter of all the negative reviews his team examined were unfair.

Companies have even used negative reviews in advertising campaigns, he says, while others have seen success from responding to unfair complaints on social media. It’s a good idea to give your own name or the names of staff members in responses, Prof. Allard says, so that readers can empathize with you as people, not a faceless company.

“A lot of companies want to move those difficult conversations offline, but we’re saying maybe keep it online,” he says. “Personalize it, show that you care. Remember that your response is not directed at that person who’s complaining—it’s directed at third-party readers. A lot of those people will empathize with you if the complaint is unfair.”

Reviews matter more for goods than for experiences

People who pore over reams of restaurant reviews before making a reservation may find this one hard to believe, but new research shows that people generally pay more attention to reviews when they’re buying physical products such as shoes or jewelry. For experiences like restaurant visits or watching a movie, they’re less likely to rely on other people’s opinions.

“People think experiential products are less likely to be objectively evaluated on their quality,” says Hengchen Dai, assistant professor of management at the Anderson School of Management at the University of California, Los Angeles. “As a result, they think those reviews are less useful.”

Prof. Dai analyzed the helpfulness ratings on millions of Amazon product reviews. Separately, she showed product reviews to volunteers and asked them to decide whether they wanted to buy those products. In both cases, the pattern was clear: People relied on reviews more for material products than for experiences.

The research shows that businesses selling physical products should take consumer reviews especially seriously, Prof. Dai says. Those providing experiences, on the other hand, could focus more on other marketing channels, she says.

The Smartest Ways to Use Online Reviews When Shopping

When sifting through online reviews, shoppers may fall prey to some common psychological pitfalls. For instance, they overrely on entertaining stories that get bumped to the top of the list for the wrong reasons, or they click away from a product with one terrible review. Here are some tips for getting the most out of other consumers’ reviews and ratings, based on the latest insights gleaned from research.

1. Look for reviews that deviate from what most people are saying. We tend to be drawn to what the herd is doing or saying, so seek out a reality check. In the case of a product that gets lots of positive reviews, for instance, look for moderate or negative ones.

2. Don’t write off reviewers who bought something they didn’t like and ended up replacing it. In fact, research shows that reviewers who admit having made a purchasing mistake on the past are often perceived as more trustworthy.

3. Focus on the specifics. Look for specific, objective statements about quality, not just the reviewer’s taste or opinion. For example, “The strap broke after two months” (quality), not “I hate the color” (taste).

4. Read the charts carefully. It’s common to eyeball the bar charts of review scores and jump to incorrect conclusions about the numbers. Instead of focusing on the bars, look at overall average scores.

5. Don’t fall for the stories. We all love a good story—perhaps a little too much. Reviews that tell a story are more persuasive, but they’re not necessarily the most helpful. Make sure you’re getting useful information, not just being swept along by an entertaining tale.

6. Take one-star reviews with a pinch of salt. Sometimes people hate a product for good reason, but other times they’re just blowing off steam. Recent research found that a quarter of negative reviews were unfair, meaning that the reviewer was complaining about something outside the seller’s control or making excessive demands.

7. Beware active reviewers: A 2019 University of Hamburg analysis of fake reviews on mobile-  app stores found that fake reviewers submit 12 times as many reviews as genuine customers. They also tend to write slightly longer reviews, and the top five words used more often in fake reviews were “simple,” “super,” “little,” “recommend” and “well”, according to one of the authors, Daniel Martens.

8. Don’t be seduced by high numbers. A 2017 study led by Derek Powell at Stanford University’s Department of Psychology found that people tend to favor products with lots of reviews, even when those reviews are bad. Resist that temptation, and instead go for quality over quantity. 

—Andrew Blackman


Source: The Wall Street Journal, 25 Oct 2020

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