Ratings and reviews are having a massive impact on our online behaviour. They are great for shoppers and great for retailers. But they are also a little bit evil. This is the first of a two-part blog about ratings and reviews (a general introduction). Click to read Part2: The lies behind online ratings and reviews.
The Growth of online ratings and reviews
There has been explosive growth in sites offering customer ratings and reviews across the web. Ratings and reviews are an excellent way to build a sense of community on a website, to improve customer service and increase loyalty. They have also proven to be a great way for retailers to increase sales.
A key part of their growth stems from the escalating importance of Word-of-Mouth(WOM):
- Trust in a "person like me" tripled to 68% in 2008 v's 2004 (Edelman, 2008)
- 84% of consumers now trust user reviews more than critics' reviews (MarketingSherpa, 2007)
Furthermore, their presence has driven a significant change in behaviour - Most of us are now using online ratings and reviews before making purchasing decisions:
- "76% use online reviews to help make purchase decisions" (Forrester Research, 2007).
- 78% say consumer recommendations are the most credible form of advertising (Nielsen, 2007),
What retailers have come to realise is that their customers trust each other more than they trust the brand. So providing that your products aren't junk, it's far better to let consumers advocate your products to one another than to attempt to persuade them by shoving marketing messages down their throats.
The result? Retailers have been adding ratings and reviews to their websites. and they have:
- helped customers make better decisions
- increased sales
- reduced the number of returns because consumers were able to make a better buying decision
Concerns about negative ratings and reviews
Despite all the evidence, we at FreshNetworks still run into uncertainty when discussing ratings and reviews with online retailers. Especially amoung UK-based retailers, there first reaction is often nervousness.
"Surely people only write a review when they're really annoyed about something. So if we allow reviews we'll end up with loads of nasty comments..."
It's an understandable concern, however it's baseless. When it comes to online reviews for products consumers are far more generous than you might think. Assuming ratings are on a scale from 1 to 5, we'd expect 2.5 to be the average score for reviews. With this in mind, it's rather impressive that the average score across the web is actually more like 4.3 (BazaarVoice, 2008).
Even if you do get negative reviews, there is strong evidence that negative reviews are good for retailers - preventing returns and giving more credibility to websites. Woot is a great example of this.
Ratings and reviews in the transaction process
Ratings and reviews are often the best way to incorporate the benefits of the social web into transactional websites. If you're moving consumers towards a purchase then you want to keep them focused and on the critical path. Offering user videos or photos or support conversations could provide a potential disruption.
Ratings and reviews however, offer a neat way of incorporating social elements into a transaction whilst supporting the desire to buy without taking consumers off the critical path.
Ratings and reviews are also a quick and simple way to entice customers into engaging with your brand online with minimal effort. As a result they can act as a great way to start building a sense of online community around your brand or e-commerce offering.
However they really are only the start of a thriving community. Beyond reviews and comments you can build deeper engagement if customers are talking about how they use products, or about the features or innovations they'd like to see in future products (MyStarbucksIdea.com sinnovation community is a great example of this).
That's the brief intro. Click to read Part2: The lies behind online ratings and reviews
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