According to a report in January 2019, 74.8% of netizens use online shopping, and according to a survey report, 97.7% of consumers refer to relevant reviews before an online purchase. (source: https://www.emerald.com/insight/content/doi/10.1108/IJCS-10-2019-0027/full/pdf)
What is the impact of online reviews on customer perception? Interestingly, more reviews do not result in better purchase intention in the 2019 study. Negative online reviews are viewed as an important source of information enabling online buyers to assess the quality and to reduce the risk perception for their valuable purchase.
There are multiple older reports regarding the positive impact to purchase intentions from online reviews.
According to a survey, almost 91% of people trust online customer reviews.
- Positive reviews have a positive impact on the business effect.
- Bad or fake reviews can drop your revenue to almost half. See our post on the cost of bad reviews costing millions to car dealers.
The growth of social media and transformation in the world of the internet has changed the complexion of businesses. Now people can share their views on social media by using the internet. Due to this massive online community, customers have started to use online reviews as a criterion for making purchasing decisions.
How Customer Reviews Affect on Buying Behavior?
Another report by Podium suggests similarly that customers do trust and engage with online reviews regularly and these reviews remain very influential when it comes to making purchasing decisions.
Eric Rea, CEO of Podium, the company that conducted the survey, said:
Any business owner knows that your most authentic and impactful advocate is a happy customer, and technology has made every customer's voice extremely powerful
Our data shows just how much consumers trust each other, and therefore how much these advocates can drive purchase decisions and grow brand recognition through online reviews
Business owners need to take reviews seriously.
- The report suggests that businesses are missing a major opportunity because many do not engage with customers or ask them to leave reviews.
- Organizations can collect photos from customers and influencers. Using photos in your news feed and positive reviews can boost sales, conversion, and generate more traffic.
- Managing bad or fake reviews by paying attention to the reviews to understand the customer’s needs. Customers often leave a hint that they would buy something again or what to improve.
As mentioned earlier, each customer reacts differently to reviews, and it largely depends on service or product. You can divide the degree of customer involvement based on the following factors.
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Helpfulness of Reviews
Helpfulness can be measured by how many people deemed it is as useful. When a buyer leaves an online review, companies like Amazon shows that how many people have read that review and find it useful. So, the quality of the reviewer matters a lot in making their purchasing decision.
An analysis of 1,587 reviews from Amazon.com across six products indicated that review extremity, review depth, and product type affect the perceived helpfulness of the review. (researchgate.net)
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Number of Reviews By Reviewer
Credibility research on media suggests that limited knowledge of source competence causes respondents to seek message-inherent heuristic cues (eg, language style and review number) to evaluate the information. (ncbi.nlm.nih.gov)
Fake reviews are usually by someone who only gave a couple of reviews. On the other end, reviewers with hundreds of reviews can be very vocal or happy with the product depending on the person.
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Product Coverage
It is an indicator of how many times the consumers reviewed a single product. A wide coverage product will have online reviews above average and offer consumers valuable feedback for making buying decisions.
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Reviews for New To Market Products
The product timeline also plays a crucial part in consumer purchase perception.
- If the product is new to the market, then customer reviews will make more impact on consumer decisions to buy. The occurrence of brand effect is also closely related to uncertain circumstances when consumers lack sufficient information to identify favorable products. (ncbi.nlm.nih.gov)
- On the other hand, if the product is in a mature stage, the reviews will not matter that much.
Various studies have shown that positive reviews play a significant role in purchasing behavior. Negative reviews also leave an impact on the buying decision of customers. Moderate reviews don’t make any impact on the buying decision of customers.
Allow Your Customers to fall in Love With Your Company
As mentioned earlier, personal preferences make a great impact on buying decisions. Personal preferences include age, gender, level of involvement, and race. Customers are emotionally attached to the product, and they express their emotions in the form of a review. If your business lacks online reviews, then it indicates two things about your business:
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Either you are not confident about your product, so you don’t want customers to leave feedback.
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You might not sell enough products to get the review.
Most of the time, customers leave feedback when they are satisfied or dissatisfied. When reviews are displayed for high price products, they increase conversion rates by 380%. Younger adults are less influenced by negative reviews than old age people. Young people prefer to buy products with good attributes and high overall ratings.
Consumers Bring Other Consumers Through Word Of Mouth
Consumers are influenced by social exposure. When you have good social exposure, you can get more sales and consumers. Every human is a member or part of a community, and we all know each other. People love to read reviews of their peers and people with common needs. For example, you are selling a car, and your potential customers would be interested in knowing other drivers' opinions.
A recent study has shown that women purchased luxury products after reading positive reviews about those products. The study has observed the purchasing behavior of working women and housewives. Housewives are influenced by the informational influence and husband’s opinion. On the other hand, working women are only influenced by informational influence. You can see now how reviews are playing A role in the decision-making models of customers.
As a business owner, you need to use review communities like Trustpilot to build trust between customers and businesses. The service collects feedback, provides the information to the customer, helps your brand stand out in search results, and increases sales.
Customers Evaluate the Other’s Opinion
Now, you might have an idea of the importance of online reviews. The idea behind reading the reviews is simple. People love to read other’s opinions before and even after making a purchase decision.
Reviews help them to support their purchase intention. Nowadays, customers give equal importance to reviews as they give to friends' recommendations.
According to a survey, 94% of people reported that online reviews help them to make or avoid the purchase. Based on online customer reviews, people often compare the two brands.
Consumers assess three things, such as how value-for-money, expected, and perfect the product is. People share everything in their reviews. They write down what they have expected and what they got.
Conclusion
Impacts of online reviews on customer perception are massive. People make their minds about purchasing the product by checking the online reputation of the brand. A good reputation and positive reviews can increase your sales, and on the other hand, negative reviews can cut your sales to half. More importantly, positive reviews bring new customers, and negative reviews help people to avoid the purchase. It is pretty clear that reviews help people to make their buying decisions.