Quantifying the Effects of User Reviews

Before starting my own company, I was at Barnesandnoble.com. One of my team’s projects was to understand the sales impact of the product page’s every component. We spent several months selectively removing details from various product pages and watching purchase behavior related to those products. Based on that research, we were able to understand the relative value of the product page’s desire data: product image, product description (short and long), product ratings, and product reviews.

Then in 2002, I wrote a column on micro narratives, as part of a series on using your site as a narrative. It discussed the importance and value of user reviews and the relative importance of different types of user reviews.

Now the etailing group has just completed a study, “Social Shopping Study 2007,” that will be released on November 12 by PowerReviews. The company was kind enough to give me advanced access to it (thanks). The results are very interesting. While the study confirms knowledge most people know anecdotally, it puts real numbers around user reviews and puts user reviews in the context of multichannel marketing. Today, we’ll look at a few of the study’s findings and discuss their impact.

The study looks at 1,200 consumers who shop online at least four times a year and spend $500 or more annually. A subset of these buyers, “social researchers,” “actively seek out and read customer reviews prior to making a purchase decision.” Of those surveyed, 65 percent fell into this segment:

This is a powerful and profitable group. Another important statistics about them: 78 percent of Social Researchers spent over 10 minutes of time reading the reviews, and 86 percent of Social Researchers find customer reviews extremely or very important.

This is both good and bad. It certainly shows the importance of reviews to these people. Yet we want to get people into the purchase funnel as quickly as possible — without distracting them. Companies look to streamline, categorizing review types with a specific product page so users can get the gist of all the reviews without having to read them all.

Impact on Multichannel Marketing

Two important statistics affect how we approach multichannel marketing and merchandising:

64 percent of Social Researchers research products online more than half the time, no matter where they ultimately buy the product (store, Web, catalog, etc.)

82 percent prefer reading reviews to researching a product in-store with a knowledgeable sales associate

We’ve discussed multichannel marketing at great length in the column, as well as the need to create paths for users to take on their multichannel journey. If user reviews are so helpful to people online (regardless of where they make their final purchase), you can do two things to make the process easier:

First, make store locators easy to access within the customer review section to aid shoppers who may want to print product details (and a few salient reviews) to bring into the store. Once in the store, they’ll probably be distracted by salespeople’s’ opinions or forget the exact model the good reviews were about. A handy printout of the review statistics or a few reviews they choose would be a terrific in-store shopping guide for consumers. Moreover, a tracking code could enable a point-of-sale system to give partial sales credit to the Web site.

Also, an in-store user-review kiosk would enable store shoppers to read user reviews about a specific product. While printing out reviews and putting them near a product is interesting, stores would rarely want to print out negative reviews (and endanger their relationships with manufacturers), so an in-store user-review depot could mitigate that issue, while providing customers the value they’re already finding in online customer reviews.

Decisions, Decisions

Eighty-one percent of consumers use customer reviews to decide between two or three products, or to confirm that their final selection is the right one.

This statistic can greatly inform how you design product comparison pages. While comparison pages traditionally just list detailed product specifications in a matrix (stacked against the other compared products), a valuable addition to this page is a section dedicated to user ratings and reviews. This helps halt the analysis paralysis that occurs when a user is stuck deciding between several similar products.

Just as important, the report also examines the difference between reviews from similar people and those from dissimilar people. As one could imagine, reviews from similar people (those with like interests or needs) are more relevant and useful than reviews from people deemed “not similar.” This is an important point we discovered in 2000 at Barnesandnoble.com when we pitted “expert” reviews (“The New York Times,” etc.) again user reviews.

Conclusion

Looking at these statistics, it’s clear how powerful user reviews are for retail sites. If you don’t currently have any, it’s time to implement this feature. Many third-party companies (PowerReviews, Bazaarvoice, etc.) specialize in this area, and the functionality is relatively easy to implement.

Finally, user reviews are hardly the domain of consumer retail sites alone. Customer testimonials in the business-to-business (B2B) world are equally effective. While the etailing group report quoted is strictly about business-to-consumer (B2C) e-commerce, the impact of customer testimonials on B2B sites is huge.

The other side of user ratings and reviews we haven’t talked about is the people who actually write the reviews. Who are they? What’s their motivation? How do you attract the “right” people to write reviews? All topics for another time…

Questions, thoughts, comments? Let me know.

Until next time…

Jack