User generated content is currently one of the most important developments on the web. Adding such content to your shop could affect the conversion dramatically (both positive as negative). During the ‘Internet Retailer 2007 Conference & Exhibition’ a few speakers paid attention to the effectiveness of customer reviews.
User reviews impact sales
According to one of the speakers (Patti Freeman Evans) during this conference almost 50% of the online shoppers think user reviews are useful to make a purchase. Funny thing is that online shoppers equally value that information to the information provided by the etailer.
Some other interesting facts from the Jupiter Research study:
- People read user reviews to control product reliability and quality
- User reviews are higher valued than blogs, RSS-feeds or a forum
Geoffrey Robertsen (Vice President E-Commerce at JC Whitney) proved that user reviews are crucial for increasing revenue. A 5 star rating increased sales by 16%, a 1 star rating caused a 31% drop in revenues. Fortunately for JC Whitney users mainly give a 4 and 5 star rating…
This is in line with data of Jupiter Research; online shoppers are more inclined to write a review after a positive product experience (43%). Only 17% takes the effort to write a negative review.
Drawbacks of user reviews (for consumers)
As just mentioned, user are more inclined to write positive than negative reviews. This is an inherent danger for consumers heavily depending on user reviews when buying a new product. The Compare Group has also done research on ‘user reviews’. Consumers show quite some funny behaviour when rating a product. They seem to want to balance the score to what they seem is correct.
So let’s assume the rating for a specific product X is a 8 (based on three reviews).
A consumer that has bought product X is quite unhappy about the product. He would normally award the product with a 5. Unfortunately he sees that the product currently has an 8. So he knows he must give this product a much lower rating than a 5 to have any influence on the average rating. Research shows that he will probably award the product with a low rating (2 or 3), just to influence the average. So his rating does not accurately reflect his feeling about the product.
After about 15-20 user reviews this behaviour diminishes and people start to award correct ratings to a product. See image below:
Reviews should be depreciated over time
Another quite important issue with respect to reviews in general is the time depreciation. A user review of an 8 about a specific camera in 2005 is not really worth a lot anymore in 2007. Probably you can buy much better camera’s with new features in 2007. So, time must play an important role in the overall product rating.
Combining expert and user reviews
To help consumers and to counterweigh the behaviour mentioned above we have added expert reviews on our website. These expert reviews are given a certain weight to a normal user review. Also, we give consumers an advice based on the number of reviews, the actual rating and the deviation of the scores. Especially deviation is important. A product can have a rating of a 7 on average, but with a lot of very high and low ratings… That implies a high standard deviation and a warning message to consumers. It could be the case that this product is very suitable for professional users, but not for ‘normal’ users.
The first respons from our users is positive. Read and listen some more about our new service:
Nice sources for further reference:
07-08-2007, eMarketeer: Customer Reviews Increase Web Sales
16-07-2007, eCommerce Cache (blog): Customer Reviews Add Value: A Look at 30 Retailers’ Customer Reviews