Customer Reviews – A Path to Profit or Peril?
If I allow customers to post candid reviews of my product or service on my web site, does the reward justify the risk?
I hear this question a lot, and I’m beginning to wonder if there’s really any risk at all. Consider these recent findings:
According to a survey by Forrester Research (a respected research and technology consulting firm), 6% of consumers say they believe marketers’ advertising claims (ouch!). 62% say they feel there are too many ads in the media.
Forrester also found that fewer than 10% of consumers said that television ads influenced their purchase decisions, while more than 50% said that the recommendations of friends and family changed their purchase plans.
The bottom line – people trust other people, and they don’t trust marketers.
Jupiter (another widely respected research firm) reports, “Shoppers who find user-generated reviews and ratings useful tend to spend more heavily online than average online buyers do. Moreover, they are more likely to say they are highly loyal to, buy more frequently from, and return their purchases less frequently to stores that feature user-generated product reviews. This is the winning trifecta of positive results from reviews and ratings features and speaks to the overall value of such a program in terms of profitability and customer retention.”
The bottom line – reviews create loyalty and drive sales. In fact it appears that those customers who review products tend to be an organization’s most valuable customers.
So the up-side relative to enabling customers to post reviews is pretty clear. Now for my question – are you really protecting yourself from negative commentary by not allowing reviews on your site?
Let’s look at what we know about current consumer behavior in this area. According to research by KellerFay Group, 63% of all word of mouth is positive. Across all of Bazaarvoice (a firm that provides customer review technology and administration services) clients, 80% of product ratings are 4 or 5 stars out of 5. And according to Jupiter Research, 60% of online shoppers provide feedback about a shopping experience, and are more likely to give feedback about a positive experience than a negative one.
So for now anyway, customer reviews appear to naturally skew in the positive direction.
What about the bad stuff? Are you really insulating yourself from negativity by not inviting reviews on your own site?
I would argue that you’re not – at least not anymore. With the birth of blogs and a multitude of other ways for customers to publicly reveal their thoughts on products and service experiences, the marketplace has become extremely democratic.
Like it or not - the voice of consumers will be heard one way or the other. So, whether in pursuit of the up-side of customer reviews or recognition that you just can’t hide from criticism anymore - I submit that marketers had better embrace this movement and enjoy the credibility and trust that comes along with the appearance of transparency.
Building Trust, Consumer generated content, transparency, Web Marketing
