It’s no secret that companies no longer control their brand reputation, consumers do. One flash point of this change is the power of online product reviews to influence the purchase process.
Recent research from Northwestern University’s Spiegel Research Center, conducted in conjunction with PowerReviews, shows just how influential online reviews written by consumers can be. Spiegel’s and PowerReview’s new report, “How Online Reviews Influence Sales,” showed that consumer reviews have sometimes surprising impact on sales.
While the report focused on consumer products, the finding that higher priced and higher consideration products enjoyed even more benefits from positive reviews should drive home the importance of reviews for B2B marketers.
Here are five takeaways from “How Online Reviews Influence Sales” for B2B and B2C marketers alike:
Displaying reviews can boost conversions by 270%
The research discovered that displaying reviews on websites and landing pages can boost conversion rates. In fact, one high-end gift retailer saw its conversion rates soar after adding reviews. “The purchase likelihood for a product with five reviews is 270% greater than the purchase likelihood of a product with no reviews,” the Spiegel report found.
The more reviews, the better — up to a point
The study found that, in general, more reviews lead to more purchases. “Our research found that as products begin displaying reviews, conversion rates escalate. Having five reviews causes purchase likelihood to increase by a factor of nearly 4x,” the Spiegel report discovered. After five reviews, however, the likelihood to purchase higher priced items leveled off.
5-star reviews may be too good
While 5-star reviews may make the product team proud, they may make buyers suspicious. Ironically, the research found that good but not spectacular ratings may actually boost sales. “{roducts with an average star rating in the 4.7 - 5.0 range are less likely to be purchased than those in the 4.2 - 4.7 range. This suggests that shoppers see ratings at the far end of the spectrum as ‘too good to be true,’” the researchers concluded.
Negative reviews may be a positive
Prior research from PowerReviews discovered that 82% of shoppers make a point to reach negative reviews. The Spiegel report reasoned, “Readers are skeptical of reviews that are too positive and, in many cases, a negative online review is seen as more credible. Additional research by social commerce specialist Revoo indicates that consumers spend four times as long on a site when they interact with negative reviews, with a 67% increase in conversion rate.”
Higher consideration, higher impact of reviews
When people are spending more money, the wisdom of crowds (and their reviews) appears to have a greater impact on purchase decisions. “Based on data from the gift retailer, when reviews were displayed for a lower-priced product, the conversion rate increased 190%. However, for a higher-priced product, the conversion rate increased 380%,” the Spiegel report found.
The full report from Northwestern’s Spiegel Research Center, “How Online Reviews Influence Sales,” can be downloaded here.
To keep pace with how reviews and other trends in digital marketing are affecting your business, subscribe to the LinkedIn Marketing blog today.
Topics: Trends, tips, and best practices
Related articles