This might have once been seemed like a trivial question about your company’s web presence; it should now be a major consideration of your business. Whereas before you may have advertised as a primary method of persuading customers to your business, a new study suggests that online reviews are the new primary factor in influencing consumer behavior.
Online reviews are everywhere these days. Online reviews, which began as a way for people to comment on business they patronize, has expanded to a massively popular digital space where people offer assessments of everything from butter brands to baseball stadiums.
But besides their massive popularity, these reviews have a clear and measurable impact on consumer behavior. A complimentary review can be a godsend for your business, but a disparaging one will convince consumers to write your business off. That’s why protecting your online rep is so important for positioning your business to thrive.
Reviews by the Numbers
40% of consumers stated that reviews are their most important consideration when making a purchasing decision. This statistic has huge implications. The weight that they’re putting into other people’s online opinions has been measured, and consumers give incredible weight to peer and stranger opinion about any product.
A positive online review can make someone nearly 10% more likely to purchase a product, while a negative review is 11% more likely to sway a consumer against purchasing a product. When consumers go to purchase products the data shows not only that they consider reviews to be incredibly important in their purchasing decisions, but also that these reviews have a significant capacity to sway purchasing behavior.
An online review can affect the likelihood of someone’s purchasing decision and it can also affect how much they’re willing to pay for a product or service. The ShareThis study looked at consumer reviews for iPads and found that a stranger’s online negative review of an iPad would influence a consumer to feel like they should pay $32.30 less for it. Conversely, a positive online review from a stranger would influence someone to pay more than $22.26 more for an iPad.
Protecting your positive online reputation can effectively help you increase your margins and increase your revenue, since people are more likely to pay more for a proven service or product than a suspect one.
Who’s Behind the Review?
Not only do stranger’s online opinions impact purchasing decisions, but the opinions of friends, family, and professionals on the Internet can impact consumer behavior as well. A negative online review from a professional or family member made a consumer want to spend $31.70 less on an iPad than they would have initially, while a positive review could influence a consumer to spend $27.42 more.
Perhaps surprisingly, a negative review from a stranger can persuade someone to spend less money on a product through a negative review than anyone else, and a positive review from a professional critic, family member, or close friend is the most effective and convincing a consumer to spend more on a product.
Online reviews are more accessible than ever, and as the Internet continues to integrate itself into our shopping habits, online reviews will only become more important. That’s why it’s crucial for companies to consider how people are reviewing their businesses online. A bad review can go a long way, but so too can a good one. Businesses will be best served by encouraging satisfied customers to post positive online reviews, because in the new economy few variables have greater impact than a positive or negative review.