Where did you sit in the lunchroom? Did you have the "right" lunchbox? Was it right because it came in your favorite color, it was the one everybody had, or it smacked of counter-culturalism? Don't pretend you didn't care what other people thought; you did, and you still do. Even when we opt to go our own way, we do so fully aware of which way the masses are headed.
Today, the influence of our peers has taken on a new guise, through the infinitely expanded sphere of community online. While we are all socially motivated to one extent or another, today, the role of social life extends well beyond the lunchroom, and it is profoundly impacting every aspect of business.
User reviews are one area in which the power of public opinion is rocking the way business is done. As Carolina K. Reid, one of our frequent contributors, put it, "If a product on Amazon doesn't have reviews, it is essentially in a black hole." Today's web-based consumers are increasingly influenced by the opinions of others in the form of user reviews and rating systems. If your company doesn't provide feedback mechanisms so that visitors can express themselves-and, more importantly, see what others think -you may find yourself falling off their radar.
Customer reviews are viewed as the No. 1 social media tool for driving sales and customer engagement, according to e-tailing group PowerReviews' "Community and Social Media Survey" from September 2009. The Retail Advertising and Marketing Association survey conducted by BIGresearch in December 2009 found that online user reviews have an incredible impact on consumer purchases, with "word of mouth" being the biggest influence in people's electronics (43.7%) and apparel (33.6%) purchases. A March 2009 study by Knowledge Networks found that between 10% and 24% of U.S. social media users turned to social networks when making purchasing decisions about various categories of products and services.
Certainly, consumer goods are the most obvious place for user comments to sway shoppers, yet user reviews will increasingly impact business decisions as well. Consider older methods that carry some of the same value as user reviews, such as user testimonials and case studies, that illustrate that your customer thought enough of your product to go on the record extolling its virtues. While tried-and-true, these techniques come off as "canned" when compared to the interactive real-time expectation of today's web researchers and shoppers.
We've seen this in many other areas: As consumers become accustomed to peer-review systems in the rest of their decision-making processes, they will increasingly expect to see them in their business lives as well. This shift is already happening. Hill & Knowlton found that today's tech decision makers give user-generated sites equal importance to traditional media sources when considering tech purchases. Decision makers consider their personal experience (58%) first when short listing tech vendors, followed by word of mouth and industry analyst reports, tied at 51% ("Tech Decision Makers," January 2009).
Without a doubt, "controlling the message" through approved case studies and testimonials reduces the worry that there will be an all-out flame war on a company's site. However, younger consumers in particular have an expectation of transparency from the companies they chose to do business with. They respond well to companies unafraid to tweet "oops, we'll fix it" instead of tightly controlling and spinning the message.
Still, the greatest fear for companies considering enabling user reviews on their sites is that feedback will be negative. This is not the case. Having collected nearly 5 million customer reviews from more than 350 retailers, PowerReviews' blog, InSite, has a pretty clear picture of the distribution of product ratings. It finds that "92% of all reviews are positive." And with regards to the other 8%, Forrester Research's December 2009 report, "Myths and Truths About Online Customer Reviews," states that "Fewer than one-fourth of online shoppers report that they are unlikely to purchase a product after reading negative reviews, and most take those reviews with a grain of salt (a mere 14% always believe negative reviews)." That's good news.
In fact, bad reviews are not always bad news. According to the InSite blog, "Some negative comments (including ‘cons') add credibility to reviews and actually increase the chance of selling that product. It's all about getting the ‘complete picture' of a product. Since consumers don't believe there are ‘perfect' products, they just want to be informed about the cons ... of a product and decide for themselves whether they can live with them."
More importantly, they provide value to companies that pay attention and respond. Negative reviews provide an opportunity for companies to evaluate their products through the lens of the customer perspective and improve them accordingly.
Consumers of all ages increasingly expect to see the comments of their peers integrated into their shopping experiences, which inevitably extend into their business decision-making process. Forward-looking companies need to find ways to engage with customers as individuals, rather than as "segments" or "demographics," and mix it up within the context of user feedback-to develop better products as well as better relationships with the customers they serve.