How do online reviews create value?
The marketing landscape has clearly evolved. Consumers have vast brand influence at their fingertips in this digital social age, and businesses have multiple avenues to engage customers in personalised conversations. Trust has become a valid currency, and online reviews have the ability to influence and change customer opinion before they have even made it into your store or clicked the ‘check out’ button.
At Trustpilot, we wanted to dive into the value of the Trust Economy a little deeper, to understand what businesses that already collect online reviews believe are the benefits and opportunities, and what the key barriers are for those who aren’t yet doing so. We therefore commissioned a survey of 1,500 business employees, including some existing Trustpilot customers.
The importance of reviews in the modern marketing landscape is indisputable. Our research showed that 79% of businesses believe that reviews play a highly important role in influencing consumers’ decision-making. Businesses clearly have their finger on the pulse, as we had already found that 77% of consumers consult online reviews before making their purchasing decision - and of those, 62% state they’re more likely to do business with a company after reading a positive review. But are businesses fully grasping the opportunity this presents?
Our research says, well, sort of. Although 69% of businesses currently collect and publicly display online reviews, nearly 1 in 5 (17%) collect online reviews but don’t display them. And, more than 1 in 10 (14%) businesses don’t collect customer reviews at all. But why shy away from promoting what your customers like about you, or worse yet bury your head in the sand and not ask them to share their feedback at all?
The number one reason is that organisations fear negative reviews, and the potential harm they could do to the business. Over 50% stated that their concern about potential negative exposure was the biggest barrier to collecting online reviews. As we’ve discussed before, the bottom line in this day and age is that consumers are writing reviews about your business, whether you ask them to or not. After all, we found that 60% of consumers have posted at least one review online in the past year. What businesses should bear in mind is that 83% of these were positive. As for the other 17%, businesses can mitigate the potential damage by taking ownership of the process and dealing with reviews first hand. After all, a thoughtful (and as important, timely!) response to a customer that has shared negative feedback makes that customer far more likely not to seek further outlets to publicly vent their frustration, and potentially even convert them into advocates for your brand.
It’s also not just about promoting glowing reviews and managing bad ones. There’s a wealth of insight that exists in between. Balanced feedback increases when businesses actively request reviews from their customers. By asking all of your customers to review their experience, you’re more likely to shift from a preponderance of ‘black and white’ reviews to gathering more ‘shades of grey’ – the three and four star reviews that contain balanced and representative feedback.
The research also revealed some interesting insights into the business benefits of reviews beyond a positive financial impact – which 79% agree they deliver. Unsurprisingly perhaps, over a quarter said they help acquire new customers and 14% believe they help increase customer loyalty. However, we were surprised that using them as a ‘real-time customer sentiment barometer’ didn’t rank higher, particularly given their role in gaining new customers in the first place and as a complement to other business goals such as Net Promoter Score and Brand Health Index. While there’s no wrong reason for implementing customer reviews, it’s important to view them as part of the ‘bigger-picture’ when it comes to customer engagement and insights to unlock their full potential value.
Overall the end goal any business should be striving for is to leverage customer feedback not just to drive customer acquisition, but also to strengthen initiatives aimed at increasing customer retention, loyalty and advocacy. It’s about taking a cross-functional, collaborative approach to managing online reviews so that feedback is shared - and put to good use - across the business.
To find out more and discover our six steps to putting customer reviews to work for your business download the report here.
We’d love to hear about how online reviews are benefitting your business in the comments section below. Or you can join the conversations on Twitter via @Trustpilot.
The data is drawn from two surveys commissioned by Trustpilot.
Trust Economy Consumer survey:
Conducted in partnership with CensusWide of 2,000 adults throughout the UK who have made Internet purchases in the past year.
Trustpilot Business survey:
1,500 adults from UK and US businesses were surveyed online between June and August 2014. 513 of those respondents were existing Trustpilot customers.