Are Online Reviews Hindering Your Sales?
July 09, 2008
Online consumer reviews significantly effect buying decisions
By Avi Nimmer
Communication between companies and consumers used to be predominately a one-way street—companies would advertise, consumers would see the advertisements and make a decision to or not-to buy. With the proliferation of the Internet, however, horizontal communication between customers is now in full-swing, according to recent research.
Of the 736 participants recently polled in an Opinion Research Corporation survey addressing the impact of online consumer reviews, nearly two-thirds (61%) confirmed consulting online reviews prior to buying a product. Additionally, a staggering 83% acknowledged that online reviews have "at least some level of influence on their purchasing decisions."
"Even a single negative review, when posted in a very public forum, can have a significant impact on a prospective buyer's decision to purchase," says Linda Shea, SVP and Global Managing Director of Customer Strategies for Opinion Research Corporation.
Individuals who have purchased or even only used a product may now exert more power over the purchase decision making of others than the company itself. So how can corporations use this development to their advantage?
Gentlemen, Start Your Forums
The survey uses Dell's IdeaStorm as an example of effective harnessing of customers' sentiments. IdeaStorm is an online forum in which Dell customers are free to share their thoughts, suggestions, praises and complaints. So far, over a dozen ideas have been implemented as a result of customers’ comments.
"Companies need to establish two-way dialogue [between the companies and customers], and use these forums to their advantage," says Shea. "[Companies] have to be in the right place at the right time. They have to talk to customers, and know what they [the customers] want and what they're looking for."
Negative reviews are unavoidable—no matter how great, revolutionary or ingenious your product is, there will always be negative feedback. The key to success is not to stymie negative reviews, or even brush them under the rug, but rather to productively embrace them. "Use forums as a means of engaging your customers, and as a beneficial tool in the development of new products," says Shea.
Despite the 83% of people influenced by online review, only 32% reported posting their own reviews; over 4 out of every 5 buyers have their opinions significantly altered by the reviews of less than one-third of the market. If customers are going to have such a powerful hand in the potential success of a corporation, it is crucial for managers to engage a larger portion of their client base, Shea notes, so as to provide a more equitable portrayal of the company, its services and products.
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