September 6, 2011
Two Studies Affirm Power of Reviews
In case we needed more evidence that consumer reviews are now a critical and highly influential part of the online shopping process, two studies have come along to affirm that proposition once again.
The first is from Cone and based on an online survey of 1,054 US adults. It seeks to measure trust and influence of various information resources and shows, among other things, that consumers rely heavily on reviews to validate information they’ve received from elsewhere. In particular negative reviews can dissuade someone from making a purchase: 80% say that “Negative information I’ve read online has made me change my mind about purchasing a product or service recommended to me.”
The other survey I refer to is from the e-Tailing Group (sponsored by PowerReviews). The data from this survey are fairly extensive and seek to reflect the relative influence of different kinds of content and social information on consumer purchase decisions. Once again reviews from other consumers comes out as the most influential type of content:
While these findings may seem obvious at this point their implications are fairly radical: traditional advertising and brand messaging is going to be almost completely ineffective if the products or services in question are not intrinsically worthy. That means millions and maybe even billions of dollars will be wasted on marketing if consumers don’t agree that the products are deserving.
It argues that companies need to invest in product quality and service rather than marketing. However there are companies like Apple that offer great products and spend millions on branding and advertising.