ShopTalk Point of (re)view
Word-of-mouth is no longer limited to personal interactions with friends and family. Consumers are now empowered to share online reviews that give specific detail into their experiences with products and services. From beaming 5-star reviews to dreaded 1-star reviews, businesses have a whole new level of transparency into their customers’ satisfaction – both good and bad.
Customer reviews are available on everything from eCommerce sites (Amazon) and search engines (Google), to social media sites (Facebook) and dedicated review sites (Yelp). And digital word-of-mouth is powerful. A study from Vendasta reports that 92% of consumers read online reviews before making a purchase. If a business’s reviews are excellent, 31% of consumers are likely to spend more with them. Although written by strangers, online reviews can carry the same weight as personal suggestions. In fact, 84% of people indicate that they trust online reviews as much as personal recommendations.
This edition of ShopTalk is dedicated to learning more about online reviews and how they influence consumers’ buying decisions. Vantiv and Socratic Technologies conducted a survey of 500 consumers to learn more about how they use online reviews for products and services. Here are the results.
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Most respondents read online reviews before buying a new product
58% of survey participants indicate that they read online reviews “Always” or “Most of the time” before buying a new product.
Younger generations read online product reviews more frequently than older generations
76% of Millennials read online reviews before purchasing a new product and 63% of Gen Xers do so as well. Compare that to Baby Boomers (48%) and Retirees (45%).
For those who read online product reviews, the majority find them important to their decision making process
58% of survey respondents say that online product reviews are “Extremely” or “Very” important when purchasing a product. Again, Millennials (70%) and Gen Xers (66%) consider online product reviews to be more important than older generations.
Reviews for electronics, computers, and phones are the most popular types of online product reviews
70% of survey respondents read online reviews for electronics, computers, and phones. These reviews are followed in popularity by home appliances like washing machines and refrigerators (57%), restaurants (54%), and cars/SUVs/trucks (50%).
Approximately one-half of survey respondents read online reviews before selecting a new service provider
In the survey, 49% of respondents indicate that they read online reviews “Always” or “Most of the time” before selecting a new service provider. Millennials are the generation most likely to do so, with 70% responding positively.
Those who read online service provider reviews find them important
59% of those who read online service provider reviews find them “Extremely” or “Very” important.
The most popular service reviews are for consumer service providers
62% seek out reviews on consumer service providers (salons, plumbers, house cleaners, landscapers, etc.). This is followed in popularity by medical services (doctors, dentists, veterinarians) at 54%, professional services (accountants, lawyers) at 41%, and utilities (phone, television, gas, electric) at 32%.
Big-ticket items drive consumers to read online reviews
Products and services that require significant investments are the most popular reason why consumers read online reviews, with 71% of survey respondents saying so. For 63% of respondents, unfamiliarity with a product or service is what drives them. Infrequent purchases are the third most popular reason for reading online reviews at 44%.
Online stores are the most popular destination for online reviews
Online stores like Amazon, Best Buy, Wayfair, Target, and Walmart are the most frequently used sites for online reviews, with 74% of survey respondents indicating that they’ve visited them in the past six months. Restaurant and food service review sites (Yelp, Google reviews, OpenTable), are the second most popular types of sites for online reviews with 47% of respondents having visited them in the past six months. Social media sites like Facebook and Twitter trail in popularity, with 28% of respondents having used these sites for online reviews in the past six months.
The overall rating or score of a product or service provider is the most important part of online reviews
66% of survey respondents consider the overall rating or score to be the most important takeaway from online reviews. This is followed by the ratio of positive to negative reviews (63%), the amount of detail within the reviews (62%), and the recency of the reviews (59%).
Women are more likely than men to read online reviews for products and service providers
62% of women will read online product reviews while only 53% of men will do the same. There is a similar trend for service providers, with 52% of women reading online reviews versus 46% of men.
What does all this information about customer reviews mean for your business? Here are three main takeaways:
#1. Business reputation is more important than ever. Consumers are paying attention to what others say about the products and services they are interested in, and are using this information to make purchasing decisions. Maintaining a positive brand reputation needs to be a top priority in order to attract and retain loyal customers.
#2. Businesses must interact with consumers in many different ways. Consumers are getting their information from many sources—from other consumers, from their peers, on social media, and on review-specific sites. Businesses need to dedicate time and resources to managing these points of interaction to ensure that the information is correct, and problems are resolved.
#3. Data is vital. The more businesses know about how consumers view and interact with their brand, the more leverage they have to make the necessary changes to keep current customers and bring in new ones. Online reviews can provide a treasure trove of customer data when it is organized and accessible in a useful way. And you’d be surprised to know that some data you may not even be looking at, like payments data, tells you a lot about what your customers think.
Now that you have a better idea about how consumers are using online reviews to make their purchasing decisions, what can you do to make the most of this information?
#1. Provide a white glove approach. Consumers want to know the people behind the brands they like. Appoint dedicated teams to interact with your customers wherever they are—online on social media and review sites, instore on the sales floor, or offsite at special events and happenings. Implement VIP programs to recognize your best customers, and incent new customers to join.
#2. Make consumers feel like their business is important to you. Instead of ignoring or deleting negative reviews, work to turn them around. When you can show customers who have had a bad experience how much you truly value their business, they are more likely to give you another try, and turn their negative reviews into positive ones.
#3. Learn how to use data to your advantage. It’s one thing to have all the customer data you could ever want—and another to know what to do with it. Payment partners like Vantiv have products and services available to help businesses sort through, organize, and analyze valuable customer data so it can be used in marketing and promotional programs that help build customer loyalty and sales.