Online reviews significantly impact sales. How much they impact sales depends on several factors, including star ratings, the nature of the review content, the number of reviews, the price of the item, and the source of the review, new research reveals.
Sales increase rapidly as products begin attracting reviews, according to a study from the Spiegel Research Center. The purchase likelihood for a product with five reviews is 270% greater than the purchase likelihood of a product with no reviews. But in a case of diminishing returns, the benefit from more reviews drops rapidly after the first five reviews.
Some Surprising Findings
These are some of the study’s other key findings. Some may be expected. Others may be surprising.
- Reviews matter more for higher-priced items. Reviews for lower-priced items increased conversions by 190 percent, compared to 380 percent of higher priced items.
- Five-star ratings don’t help. Purchase likelihood typically peaks in the 4 to 4.7 star range and decreases as ratings approach 5 stars. Five stars may seem too good to be true to skeptical shoppers.
- Reviews from verified buyers are substantially more positive than reviews by anonymous sources. Verified buyers are more likely to give four- or five-star ratings; anonymous buyers are more likely to give one- and two-star reviews.
Based on the research, Spiegel Research Center Executive Director Tom Collinger offers these recommendations:
- Display reviews and ratings on your product website. Businesses that don’t feature ratings and reviews on their website may risk losing customers to competitors that do.
- Embrace negative reviews. While it may seem counterintuitive, negative reviews can help establish credibility. Critical reviews also provide an opportunity to answer objections, clarify product features, and demonstrate exceptional customer service.
- Seek reviews for products with few reviews. All products should have at least a handful of reviews.
- Solicit reviews for higher-price products. Additional reviews can help shoppers overcome the fear of buying expensive or unfamiliar products.
- Overcome selection bias to improve the value of reviews. A larger pool of reviewers is not always more representative, particularly if it includes a large number of anonymous reviews.
- Identify reviews from “verified buyers” Identify purchasers with verified buyer badges to enhance the review’s credibility.
How do businesses get reviews? Ask for them — soon after the transaction. “Smart companies ask every customer to share honest feedback — and they display all of it,” advises Mark Lange, CMO of Reputation.com. “Over time, this approach almost always ensures that your business’s online profile will reflect its true reputation.”
Other Tips for Online Reviews
Use them as testimonials. In addition to placing reviews on websites, businesses can highlight them in social media posts or pin them to the top of social media profiles, especially favorable reviews. Remember to obtain permission before using them.
Highlight media mentions. In addition to posting positive reviews, you can also display positive media stories and blog posts on your website. Use only headline and snippets of articles or secure the publication’s permission in advance to avoid copyright issues. A media monitoring service can identify mentions about your business on online news outlets, as well as blogs and review sites.
Monitor media sentiment. Monitor and analyze the current sentiment of reviews on major review sites. Monitor other sites frequently, as negative reviews can climb quickly in search results. Monitoring reviews enables PR and marketing teams to take a proactive approach to protecting the company’s online reputation.
Follow best practices on improving reviews on Yelp and other review sites. That includes completing the business’s profile, encouraging reviews from satisfied customers, and asking friends and business partners to post reviews so long as they disclose their relationship to the company, recommends Go Fish Digital.
Generate positive press coverage to counteract any negative online comments and protect the organization’s online reputation.
Bottom Line: Online reviews can drive sales, but amassing large numbers of reviews full of praise is a mistaken strategy. Establishing credibility is crucial to gain benefits from reviews.