Online Reviews and Reputation

Management

Hamutal Schieber | March, 2015

Introduction

• Whether good or bad, online reviews are a critical factor in the consumer’s path to purchase,

across various industries.

• In this presentation, we shall review:

– Why do online reviews matter?

– Who writes online reviews, and why?

– What is the nature of those reviews?

– What are the common / innovative forms of reviews?

– How should companies cope with the rise of reviews?

Table of Contents

Online Review Statistics

Trends and Innovations

Company Strategies

Table of Contents

Online Review Statistics

Trends and Innovations

Company Strategies

Why do Online Reviews Matter?

• A recent YouGov survey found that 87% of US adults who read online reviews, say that

the overall ratings of products / services are very important or somewhat important to

them, when deciding whether to purchase a product or a service.

Marketing Charts, Data

by YouGov, Dec. 2014

Why Do Consumers Read Reviews?

• According to YouGov, the main reasons given for

accessing reviews are:

– to ensure the product or service is of good

quality (79%)

– that the product works (61%)

– to make sure they don't get ripped off (53%)

The Star rating is almost as important as the

written content (87% say star rating is important,

compared to 90% for written content).

Source: YouGov, Base: American adults who read online reviews

Why Do Consumers Write Reviews?

• Motivations to post online reviews,

are:

– help others make better

purchasing decisions (62%)

– it is polite to leave feedback

(35%)

– want to share positive

experiences (27%)

– to help good vendors get

business (25%)

• Only 12% are trying to expose

poor vendors.

YouGov 2014

Do Consumers TRUST Reviews?

• According to 2014 YouGov survey, most consumers find reviews trustworthy, but only 13% believe they are "very trustworthy" and a full 90% believe that some people review products and services without trying them.

• Indeed, the YouGov survey found that 21% of consumers have written reviews for products /services they had never actually tried.

• A similar proportion (91%) believe companies write their own positive reviews and 89% think businesses write negative reviews about their competitors.

Brand Reviews Across Industries

• The importance of reviews and advocacy is

evident in every industry.

• On a BCG survey, it was found that across

all the industries studied, at least 47

percent of consumers cared enough about

a brand either to recommend or to criticize

it.

Brand Reviews Across Industries

• Online reviews are especially important for

the hotel / travel industry, where over 80%

of consumers find user reviews important

(Olery).

• A 2013 PhoCusWright poll, conducted on

behalf of TripAdvisor, found that more than

half of consumers do not make a booking

decision without reading reviews from

others (source: Skyft, 2015)

• If prices are the same, users are 3.9 times

more likely to choose a hotel with higher

review scores – and 76% of customers are

willing to pay more for a hotel with higher

review scores

TripAdvisor, Jan, 2015

Brand Reviews Across Industries

• Generally, American reviewers tend to write

positive (74%) or neutral (32%) reviews. 22%

write bad reviews as well (source: YouGov

2014)

Neutral, 32%

Positive, 74%

Bad, 22%

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Title

• According to a BCG survey, positive

advocacy tends to be higher in industries

whose products or services evoke

consumers’ greater emotional involvement,

such as smartphones, or in aspirational

categories such as luxury cars.

• In contrast, negative advocacy tends to be

much higher in service businesses, such as

retail banking and mobile

telecommunications: the reason is that any

consumer facing interaction might lead to a

negative experience, whereas a good

product will usually remain satisfying.

Brand Reviews – Local Businesses

• A BrightLocal Local Consumer Review Survey 2014, conducted in North America, found that:

– 88% of consumers have read reviews to determine the quality of a local business

– 72% of consumers say that positive reviews make them trust a local business more

– 88% of consumers say they trust online reviews as much as personal recommendations

– 72% of consumers will take action after reading a positive review

Reliability (27%), expertise (21%) & professionalism (18%) are the most important

reputation traits for a local business.

The Importance of Your Overall Rating

• According to the BrightLocal 2014 survey, the biggest

differential for North American consumers is between 2

Stars & 3 Stars, with 72% of consumers willing to

consider a local business with a 3 star rating vs. 27%

who would look at a local business with a 2 star rating.

• The jump from 3 star to 4 star is also sizable, with 20%

more consumers willing to look at a 4 star business vs

3 star.

Source: BrightLocal

Table of Contents

Online Review Statistics

Trends and Innovations

Company Strategies

Trend Map

• From industry-specific aggregators, to all-industries aggregators

• Scanning products to instantly review ratingsConvenience

• Integrating the user’s social network to view friends’ recommendations

• Reviews “from people like you” based on previous searches and ratingsPersonalization

• Third-party reviews are integrated into company sites

• Regulators worldwide ban fake reviews and anti-competitive reviews

• Everything is reviewable – reviews enter food & beverageTrust

• Instant feedback to allow for real-time improvement

• Sellers begin to rate customers

• Reputation management through conversationInteraction

• Review aggregators, mobile apps, and YouTube channels are all used to access reviews

• Media integration – photos, videos, badgesMulti Channel / Format

Convenience | Ultra-Aggregation

• Comparaboo collects data from customer reviews, expert

consumer blogs, sales data and social media signals and

compiles the information into a shopper-friendly display. It

sorts the results into a “Top 10” list with a 1-10 value rating,

indicating the overall score of the product based on reviews,

popular trends, average price, and the brand’s reputation. It

shows which website offers the best price with a one-click

link that goes straight to the respective site’s purchase page.

• The Consumr app offers:

– Reviews from everywhere in one place

– Reviews from people “like you” and your Facebook friends

– Scanning barcodes to instantly see ratings

Aggregators - sites which gather reviews on various businesses and/or industries

Convenience | Meta-Reviews

• Innovative tools offer companies to monitor reviews

from all over the web, while providing meta-data which

analyzes authentic reviews, for the end-user.

• According to TrustYou, “Meta-Reviews are a trusted

summary of relevant reviews worldwide, showing the

most talked about and most relevant attributes of a

particular hotel, along with some special, important-to-

know ‘nuggets’ of information that are unique to the

particular hotel.”

TrustYou offers a structured review data API that

allows travelers to make “the best possible informed

decisions based on a summary of all verified

reviews across the web”.

Convenience | Search Integration

• Shoppers usually use reviews as part of their shopping journey, as they search for information which

would help them decide whether or not to purchase a certain product or service.

• As such, it is no surprise that search engines strive to integrate reviews through the search engine, to

appeal to consumers through a more convenient, time-saving offer.

Yahoo, Google feature Yelp reviews of local merchants

Personalization

In 2012, TripAdvisor launched an app for

Facebook, a way for hotel owners to pad

their Facebook Pages with reviews,

ratings, photos, and other content.

• Amazon offers a “Shop With the Help of Your

Friends” program. Users connect their

Amazon account with their Facebook account

to join. This unites the power of online reviews

with friends’ WOM influence, and provides a

more compelling tool for shoppers.

Trust | Everything is Reviewable

• Grocery retailers and hypermarkets, are also incorporating online reviews, in order to drive

sales and reduce online shopping barriers.

.target.comwww.nestle-marktplatz.de

Interaction | Real-Time Feedback

• Mobile tools provide a way to post a review immediately upon receiving the service.

Expedia, a prominent hotel reservation and review aggregation

site, encourages visitors to review the hotels with which they

had stayed. After guests arrive at a hotel they receive an email

or app notification asking them three questions: “How was your

check in?;” “How is your room?” and “Are you happy with the

location?”. The instant feedback tool gives hoteliers an

opportunity to correct the service or make up for it, and

thus prevent a potential negative review.

Multi-Channel / Format

• Online reviews take many forms, and marketers should try and

monitor those most important to their category, whether social

platforms, YouTube or various aggregators.

Multi-Channel / Format

• Review aggregators have evolved over the years:

– All sites offer star / rating systems, along with a written review

– Many sites offer badges such as ““recommended on” and “rated on”, as well as photo

uploading options

– Many sites also offer users to upload video reviews.

Rating systems

BadgesPhoto & Video

• In 2014, review

aggregator Yelp updated

its iPhone app, which

hosts 67.9 million unique

visitors per month to its

mobile site and its apps,

to enable users to add 3-

12 second videos to their

reviews.

Table of Contents

Online Review Statistics

Trends and Innovations

Company Strategies

Reputation Management Strategy

• Companies can’t control the conversation or block it. They

can either ignore, fight, or – encourage the conversation.

• Fighting consumers’ feedback has never proved to be a

good idea. Ignoring bad reviews could work in some

cases. But the real winners are the brands that have

embraced the reality of online reviews, and which

encourage the consumers to leave a feedback on their

own site/ app or through an aggregator.

• This gives brands the opportunity to receive authentic

feedback, and monitor the conversation more closely.

• This restaurant turned a negative Yelp review into a point of difference… (source: The Wire)

Reputation Management Strategy

Establish social media presence, so your customers can talk to YOU directly

Monitor your reputation through alerts, or through tools such as Trackur, Tweetbeep, BrandsEye, TrustYou, etc.

Respond to feedback and don’t try to fight it. Attempts to remove a conversation, usually result in extra publicity.

• JCPenney's launched a virtual apology tour on Facebook,

YouTube (watch below) and Twitter to get the message out to

customers— "It's no secret. We've made some changes. Some

you've liked and others you didn't. We've heard you—and

we're listening. Let us know what you think."

• The brand launched a dedicated hashtag on

Twitter: #jcpListens.

Leveraging Online Reviews

• Today, companies acknowledge that shoppers share and read online reviews, and instead of

viewing that fact as a threat – they try and turn it into an opportunity, by:

– Hosting the reviews in their own websites

– Encouraging the user to a review aggregator for reading / writing a review

– Using positive reviews in their marketing communications

It is important to view reviews as an opportunity: it enables marketers to get consumer

feedback, to improve, and to encourage word of mouth. Let’s not forget that over 90% of brand

conversations take place in the actual world – where marketers cannot participate - and not

online.

Embracing Reviews

• Domino’s Pizza: the “Pizza Tracker” gets a Yelp

button, to leave an instant feedback which will be

featured on Yelp

• Marriott displays “Marriott Verified

Reviews”, ratings and reviews from

confirmed “stayed and paid” guests for

a hotel as long as there are a minimum

of five reviews.

Embracing Reviews

Four Seasons began running

TripAdvisor reviews on its properties’

pages in 2013, following a website

relaunch, noting that the guests will

check the reviews on TripAdvisor

anyway.

This is a smart strategy, as it allows the

website to take control over the

messages which the visitor is exposed

to, as well as to keep more visitors on

their sites, resulting in better chances for

direct order / purchase.

The company also features Twitter and

Facebook reviews.

Embracing Reviews

• Kia and Hyundai

publish Revoo

reviews of their

cars by

customers

directly onto their

sites.

Kia

Hyundai

Embracing Reviews

• Online bank Ally.com includes reviews for it’s products on the website.

Thank You

The research was conducted by:

Hamutal Schieber

Schieber Research | Market Research & Competitive Intelligence

www.researchci.com | hamutal@researchci.com

Executive Summary. For the full research - please contact

Carmelon Digital Marketing

http://www.carmelon-digital.com