People are willing to pay up to 99 percent more for services after reading positive online reviews about them, according to new research.
The study, conducted in October by comScore and The Kelsey Group, found that online, consumer-created reviews have a big impact on prospective buyers. The researchers said 24 percent of those who eventually pay for local services — such as restaurants, hotels and automotive shops — read online reviews before making a choice.
The study showed consumers were so trusting of online reviews, they were willing to pay at least 20 percent, and up to 99 percent, more if a company was rated excellent or five-star than if a business received a good, or four-star, rating. The study was based on 2,078 survey respondents, including 508 who used online consumer reviews.
Professional critics, and owners of companies that receive less-than-excellent online reviews by laypersons, might question the ability of regular people to adequately judge a service. However, the comScore/Kelsey Group study found that 90 percent of the people who trusted consumer-written reviews found the critiques to be accurate. In fact, noted the researchers, “reviews generated by fellow consumers had a greater influence than those generated by professionals.”
The study included restaurants, hotels, and travel, legal, medical, automotive and home services. At least 75 percent of those using online reviews for nearly every category of business included in the study said the amateur field reports significantly impacted their decision. Eighty-seven percent of those in search of hotels said the reviews played a big part in their choice.
The take-away message for service providers, according to a statement issued by The Kelsey Group’s research director, Steve Marshall: “With such a large percentage of review users subsequently purchasing, it’s vital that local service providers have a positive presence on these review sites.”
The fact that one-in-four of those contacted said they use reviews should come as good news for those in the online consumer review space, said Brian Jurutka, senior director at comScore Marketing Solutions. “That’s a sizeable chunk,” he said. “This helps them in having discussions with folks looking to advertise; it says a sizeable portion of the online population is going to be visiting these sites.”
However, the popularity of consumer reviews is creating some friction between business owners and the Yellow Pages-type Web sites that have begun including the reviews, said Jurutka. “They generate a lot of revenue by having a lot of local marketers advertise but let’s say these folks start opening up their sites to consumer reviews and consumers start writing bad reviews. The businesses say, `You’ve gotta take that bad review down.’ They’re stuck in a really bad spot.”