Effects of Online Reviews on Customers

“Know where you’re being talked about. Know everywhere your business is mentioned.” – Jay Baer

Let us begin with some statistics and data regarding online reviews. In a research conducted, an overwhelming 91% of customers confirm that they check online reviews of other customers when attempting to assess businesses around them. Thirty-three percentile of the customers said they would not decide unless they have checked the online reviews, and only a meagre 9% say that they do not check reviews at all. Obviously, there are effects of online reviews on customers. The fact is that with so many competitors today, companies must maintain a positive reputation and be seen as frontrunners in their area of operation. Such strong reputation is a formidable marketing tool and an invaluable asset for any company, through which a company would have prospective customers connecting with them even without making an effort.

The effects of online reviews on customers are that they provide social proof – which proves to be extremely helpful in forming positive (or negative) impressions in the mind of a wider audience. Prospective customers, seeking certain products and or services, would much rather trust the ratings and comments provided by users and regular customers over conducting research on their own or believing the claims of companies. Among the top effects of online reviews on customers is that it hastens the buying decision process, because of the trust factor involved. There is no doubt therefore, that companies must be extremely careful and have laser-like focus when managing their online and offline reputation. Customers use social media, and other online portals to review companies, their brands, and the customer service provided. The number of customers posting comments and reviews is rising steadily, and so are kinds of industries, services, and products being reviewed. These reviews are extremely beneficial to other customers, and the businesses in question. (Negative reviews too, help businesses know their flaws and rectify them).

It is important for a company to enable customers to post reviews on the company website – this increases the chances of being ‘found’, increasing the organic search rankings of the company on the popular search engines. Each new review adds weight and content to your website, which shows the company as being as authority or subject matter expert on a variety of subjects, increasing the probability of being ‘picked up’ by search engines. In order to gain more and positive online reviews, it is important for a company to ensure that it treats its customers well in the ‘real world’ as well. Delighting customers in the physical world will ensure that they spread the positive word of mouth, and write great online comments about the company as well.

Another positive and profitable effect of online reviews is higher rates of conversion. These reviews include the negative ones as well. A mix of reviews shows that the company is not bluffing or trying to hide anything, which works to enhance conversions. People understand that not everyone will always be happy with a company, and do expect some comments that are not in favour of the company. Only positive comments tend to make people suspicious and doubt whether the company is purposefully posting only those – or worse that the company, and not actual users, write the positive comments. Of course, the negative comments must not overshadow or outnumber the positive ones. The amount of material there is on a company from current customers the more likely it is that others would gravitate towards the company.

From the changes in a popular search engine’s algorithms, it is clear that it has placed more importance and weightage to online reviews of customers, for the ranking and visibility of companies. In addition, the advancement in technology has brought new tools, platforms, and methods for companies to gain customer reviews, which clearly means that customer online reviews are here to stay. Companies that recognize their importance, and leverage the strength of these reviews will be more successful – they would find it easier to gain customer attention and business, and would gain more customers through the most potent method, i.e. positive word of mouth from existing customers.

There are significant SEO benefits too – one of the effects of online reviews. Search engines constantly seek unique and differentiated content – information that is fresh and regularly updated. Gaining user online reviews means fresh content, and this helps in differentiating product pages in the search results. Such differentiation makes the pages more visible because of their enhanced usefulness, thereby increasing their ranking in the SERPs. In addition, online reviews with specific product names or brands are more likely to get ‘picked up’ when people search for those particular products. For example: at least 64% prospective customers check online reviews before buying technology related items – searching by product name such as digital camera and others. Online reviews enhance the possibility of people landing on the website of a company that sells such products. Additionally, properly formatted content of online reviews, increase the click through rate from SERPs.

The great part about online reviews is that the bad reviews have value as well. As mentioned, some amount of customer frustration is certain for every business, and rather than hide a poor review, a company must let it be visible. This would enhance the trust levels in readers and prospective customers. Research shows that some bad reviews actually enhance conversions by almost 67% – people look for such reviews when they are paying attention to a company. Since gaining customer attention is tough, any method to earn it would be helpful – attention means that there is an underlying intent to buy. Research also shows that 68% customers trust online reviews more when there is a mix of both good and bad comments – at least 30% customers tend to distrust a company with only good reviews.

However, the effect of online reviews that are negative becomes undesirable, if there are too many such reviews. Too many unfavourable comments will ensure that prospective buyers search for other companies to make their purchases. No one wants to be stuck with a ‘bad company’ – i.e. one with poor quality products and customer service. Research shows that a majority of 67% prospective buyers would be discouraged from buying if there are between one to three poor reviews. That is a very high percentage of possible sales lost and no company can afford to lose so much business on a consistent basis.

Research shows that older customer – that is people in the age group of 55-64 years are more likely to be deterred from buying after reading only two poor online reviews. Younger customers – those between the age groups of 18 to 24 years are much less likely to be affected by poor reviews. The products being reviewed also matter – the sale of simpler products such as books or games would not be as affected by poor reviews, as electronic goods. Highlighted flaws of such expensive items would surely deter prospective buyers.

Good or bad, there are effects of online reviews on customers and viewers. These reviews are significant and hold a lot of importance for any company, and for a large portion of online shoppers. They serve as guides for first time buyers, and even existing customers seeking to purchase similar products. From a company’s perspective, these online reviews keep the website and other online sites relevant, increase the possibility of higher search rankings, and encourage people to buy more and continue posting their comments. Does your company encourage online reviews?

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