“Recommendations can have more of an impact than brand or price. They can be more important than what your brand is and the price you’re charging.”
— ShareThis CEO Kurt Abrahamson
Think of the last time you went out for supper and all the decisions that it took you to get there. You likely chose a night that fit into your schedule (or realized there were no groceries in your fridge), picked an outfit and hit the town. And, if you’re like most people, you searched the restaurant online as well. According to Constant Contact, “restaurants are the most searched industry by consumers through both mobile applications and browsers.” Restaurants are frequently sought after online, and other industries are not far behind. One of the main pieces of information consumers are seeking is online reviews.
Yahoo! Tech recently reported on a study that illustrates the monetary value of online reviews. The study, conducted by ShareThis and The Paley Center of Media, puts dollar values on a phenomena all of us know (or at least have sensed) to be true: customers trust online reviews nearly as much (and sometimes more) than personal recommendations. The study revealed that consumers were willing to pay more for products if they received good reviews.
“We found that highly positive online shares can generate an almost 10 percent increase in purchase intent, and negative reviews can also have a correspondingly negative impact, [reducing purchase intent by] 11 percent,” explained ShareThis CEO Kurt Abrahamson to Yahoo! Tech.
The survey considered the responses of over 6000 participants to see if people would be willing to pay more or less for products based on reviews from strangers and friends, online or in person.
Their conclusion: people are definitely willing to pay more for a product if they are aware of positive reviews. When buying an iPad, respondents would pay $22.26 more based on a positive online review by a stranger, and $27.42 more with a good review from a friend. The table below shows how much more people are willing to pay for certain products — Apple iPad, Samsung Galaxy, Dell Venue and Google Nexus — based on positive reviews by strangers, acquaintances and friends.
Bad reviews proved to be more influential than positive reviews, driving down the price people were willing to pay for a product. After reading a negative review by a stranger on the iPad, people were apt to pay $32.20 less for it.
What’s the Big Deal?
It is absolutely essential to monitor a business’ online reviews. The good ones can be harvested and used for promotion, and the negative ones need to be responded to quickly and efficiently. Even when the exact monetary value cannot be measured, it’s clear that reviews have a huge impact on the way consumers view products or services. Help business monitor their online presence and ensure their business listings are accurate. This is the best form of customer service for the digital age.