The Effects of Consumer Reviews Driving Purchasing Decisions

Overview In the age of digital media words, pictures, and experiences can go viral across in the web over night. Consumer reviews are the second most trusted source buyers reach out to before making a purchase. These reviews can be posted within seconds, seen by anyone, and have the potential to promote or destroy a brand. Summary of Findings Nielsen’s Global Trust in Advertising report revealed online consumer reviews rank as the second most trusted source people rely on to make purchases, with 70% of consumers surveyed. Another study, conducted by KRC Research, on potential consumer electronics purchasers revealed 65% are inspired by a consumer review to select a brand that had not been in their original consideration set. Consumer reviews crush editorial reviews by a three-to-one margin in influencing buying behavior. Shoppers trust consumer reviews on Amazon.com (84%) and bestbuy.com (75%) the most, both trusted higher than consumer reports (72%). Consumer reviews are driving sales. Harvard business study found that a one star increase in Yelp ratings meant a 5 to 9 percent increase in restaurant revenue. This creates a better chance for business to be full during peak hours. Media consultant BIA/Kelsey estimates that small and medium-size businesses spent about $1.6 billion managing their online reputations in 2011. It expects the figure to grow to more than $5 billion by 2015. The New York Times revealed information that vendors may buy 5 star reviews on Amazon. The rise of fake reviews leaves consumers somewhat skeptical. Websites like Facebook and TripAvisor are researching ways to combat fake reviews and marketing scams. The study by KRC research shows that 80% of consumers say they have been concerned about the authenticity of reviews. Shoppers say 31% of a product’s reviews must be negative for them to doubt the quality of the product. The average buyer consults 11 consumer reviews before purchase; this is one way to compensate for fake reviews. One key to getting good reviews is giving good customer service. According to Forrester Research, nearly a third of consumers have complained about poor service using social networking sites or third-party review sites. A study by AchieveGlobal found that one in three global respondents preferred being treated well compared with having their issues immediately resolved. The same study also shows that nearly 40% of respondents worldwide admit to posting a negative review online after a poor customer experience. Half of respondents note that they would sample a competitor after one bad experience. Summary of Recommendations I recommend that organizations not ignore the potential of the consumer review. Organizations need to be sure that consumer review sites are being monitored using software such as Grapevine. Using keywords and close monitoring of the entire

organization’s presence online allows a timely response for consumers and could avoid a potential crisis for the organization. I also recommend that communications, advertising, and marketing personnel incorporate consumer reviews into their communication plan. Consumer reviews can be used in a positive manner. The organization has an opportunity to reward, engage, and get and give direct feedback to its consumers. A plan should be set in place for dealing with negative reviews most importantly, but positive reviews as well. I recommend that all organizations support attempts to combat fake reviews of their products. Finding a way to detect and remove bogus reviews is important for both the consumer and the organization. I also believe they should agree to be transparent to their consumers and not pay for better reviews of their products. My last recommendation is for organizations to focus on customer service. A bad customer service experience can influence a consumer to leave a bad review or even buy a competitors brand. Ensuring the highest quality of customer service gives the consumer a reason to come back and a reason to rave about the brand. Conclusion Consumer reviews has become one of the most trusted sources for purchasers, which means it should become a high focus for an organization. I believe if organizations take consumer reviews seriously they will be able to use them to their advantage. Public relations, advertising, and marketing personnel need to add consumer reviews to their strategic plans. These reviews directly affect a brand’s reputation and can lead to increases in sales if monitored and used correctly. Consumer reviews deserve close and special attention, for the brand and its consumers.