Customer reviews make a difference2007-08-07
It was a big deal when Wal*Mart announced that all of its products would be open to customer reviews on the big-box retailer’s website. While customer reviews have long been a staple of companies like Amazon.com, Wal*Mart’s adoption of the practice signalled that online customer reviews was going mainstream.
Reserach released recently (and found via eMarketer) suggests it’s a smart move in more ways than one. The “Social Commerce 2007” study, conducted by e-consultancy and Bazaarvoice, reveals that customer reviews increases everything from site traffic to sales.
Some results from survey respondents when asked about the impact of customer-generated ratings and reviews:
- 56% said conversions increased
- 77% said site traffic increased
- 42% said the average value of an order increased
- 73% said customer retention and loyalty increased
- 59% said search engine optimization was improved
About a third of the study’s participants expressed concern about negative reviews, the biggest obstacle to greater adoption of the practice. “But retailers are finding that they can improve conversion rates, drive sales and increase customer satisfaction even if customers aren’t necessarily singing their praises all the time,” according to Linus Gregoriadis, E-consultancy’s head of research.
Another survey—last year’s MPlanet study from the American Marketing Association—indicates that consumers rely on reviews mostly for more complicated products. MPlanet also noted that the reviews are taken to heart mostly for high-priced products and consumer electronics.
Have you noticed yourself being influenced more by products accompanied by customer reviews?