What is the value of an online review?

The power of social sharing and online reviews has been highly disruptive to the practice of reputation management. Both solicited and unsolicited feedback now finds a huge audience. The changing nature of reviews as they've moved online has required us to step back and re-evaluate what we know about our customers.

A review left online is a permanent record of that customer's experience, it can be found by anyone and reach a far wider audience than ever before. As these begin to amass they form Social Proof. What motivates people to leave an unsolicited review?

• Desire to affect a change in the business, product or service.
• Anger at poor product or service.
• Delight at a great product or service.
• A product or service is not as expected.
• Desire to help the public, for instance if the customer is an expert in the product.

What we know

In general businesses know that online reviews can have a big impact on their brand. 79% of businesses believe that online reviews play a significant role in the customers' decision making process and 58% of businesses say the reviews help them identify new opportunities and improvements. Only 18% of businesses in the UK don't pay any attention to negative comments or reviews online, 76% of business owners say they're concerned about the influence of malicious and/or negative comments online.

The Harvard Business Review found that;

• Transaction Based Business - A 'Great Customer Experience' brings an average spend of 140% more than a 'Poor Customer Experience.'
• Subscription Based Business - A 'Great Customer Experience' brings an average spend of 170% more than a 'Poor Customer Experience.'

14% of business leaders say they are keen to take advice and learn but don't know where to start. This article is the perfect place to start!

Measuring worth

Typically measurement around reviews is made of a mix of Qualitative and Quantitative data. It's impossible to simply say 'A Review is Worth £X.XX' because all manner of things from tone to language to placement will affect the value of the review.

To find the value of online reviews we look at the data cumulatively and draw conclusions rather than trying to assign a pound value to an individual review.

Influence mix

A customers' Influence Mix is the cocktail of opinions, information and experiences that will affect their purchasing decisions. The formula for understanding it is kept necessarily simple, it's made up of just 3 key parts.

The Influence Mix is made up of prior beliefs, experiences and preferences (P) and information from Marketers (M). The third category is input from other people and information sources (O).

The dawn of online reviews has seriously upset the average Influence Mix. The Influence Mix is a Zero Sum game. If one area gains another must lose.

The rise of online reviews and the (O) influence source has had a number of effects on consumer decision making habits.

1. Consumers act more rationally; irrational purchasing decisions are magnified when the number of sources of information is limited.
2. 'Compromise Effect' is lessened; when presented with all the information and time to internalise that data, consumers 'hedge their bets' by picking the middle-of-the-range product less often.
3. 'Brand Loyalty' is being replaced by 'Virtue Signalling' in certain demographics; rather than being loyal to the brand itself these consumers are loyal to the virtues espoused by the brand.
4. Influence Mix is more dynamic than ever; though online reviews have permanently deformed the old 'Average Influence Mix.’

Customer experience

When a customer is writing a review they will rarely focus on the things your business did 'adequately.' It's human nature to remember highs and lows, not the average. I won't go in-depth on providing a positive customer experience as it's beyond the scope of this article. Suffice to say providing a positive customer experience is 75% of garnering positive online reviews.

Review placement

The optimum places to showcase your best reviews will vary depending on your buyer personas, business area, geographical location and more. There are some online review platforms that it is almost universally a good idea to put some time and effort into, such as Google reviews.

Easily accessible online reviews and online reviews that a customer could stumble across unintentionally are great for social proof. When a review is left on Facebook it will make an impression on a large portion of the customers' friends. Interaction on that review will increase this effect and give you multiple chances to score impressions on the 'friends-of-fans.'

If your Buyer Persona is invested in your product or service as a hobby or lifestyle they are likely to visit specialist review sites. If your product or service is expensive then your customers are also likely to visit specialist review and comparison sites.

Customers will generally trust a review more if it is on a third-party website or social media platform. The amount of reviews on a single platform or website will also affect the relative value of each review placed there.

Language

Reviews recount an experience and opinion. Subtle quirks of language and tone in reviews have the ability to provoke undesired or unexpected reactions in those reading them.

The emotion the reader of a review perceives the author of the review to be expressing has a statistically significant impact on their assessment of how helpful and accurate the review is. The study compared 'anxious' and 'angry' language as these two emotions often overlap or complement each other in online reviews. When a reader perceived the author of a review to be angry they exhibited a stronger emotional response but consistently rated the reviews as less helpful than those thought to be written by someone in an anxious state.

Negative vs positive

The 'Negativity Effect' is a well documented facet of human psychology. All of human experience has instilled within us the innate tendency to give negative information far greater weight than similar positive information.

With online reviews there is no single, direct ratio that can be found for how many positive reviews it takes to outweigh a negative one. However there are some trends we have observed across multiple studies;

1. The greater the asymmetry between positive and negative the harder it is to predict 'Negativity Effect' magnitude.
2. Negative reviews drive the average 'price willing to pay' for a product down more than positive reviews drive the average 'price willing to pay' for the same product up.
3. Positive reviews are more effective offline whilst negative reviews are more effective online.
4. Perceived 'helpfulness' has little correlation with actual amount of accurate information contained in reviews.

Quality vs quantity

Potential customers may be put off if your volume of reviews is low, either in actual amount or relative to competitors. Equally if you have hundreds of reviews that are simply star ratings with the comments section blank there may be a lack of trust.

• 33% of consumers read more than 6 reviews, only 15% read more than 10 reviews. Factor this into any strategy you put in place to funnel reviews to a particular platform. If you have 50 positive, in-depth reviews on one platform there's a good chance 80% of them aren't being seen regularly.
• Compare your review quantity to your competitors, if you begin to fall behind by a significant amount on a particular website consider funneling reviews in that direction.

To decide which websites and platforms to set your focus on you need to identify which platforms and websites drive the most traffic to you. The second concern is which relevant review sites receive the most traffic, good for brand awareness. Thirdly you should be aware of what is on page 1 of the SERPs for all the common 'review' query iterations of your business, popular products and services.

1. A single negative result on page 1 of the SERPs puts off 21.7% of consumers. 4 negative results on page 1 and you've lost 70% of your potential customers.
2. Page 1 of the SERPs is King! 97% of all organic traffic goes to the top 5 organic results. Upwards of 90% of your customers will stick to page 1.
3. The use of dedicated review sites and specialist review sites varies wildly between industries and demographics. They can be good vehicles to bury results to Page 2 of the SERPs or score 'easy wins' if your competitors aren't present.

Respond to reviews

Responding to reviews and interacting with your customers makes them feel valued and gives a warmer, more human edge to your business. However, you will inevitably have to deal with negative or angry customers. It's vital your staff know how to deal with negative feedback. A carefully cultivated online presence can crumble overnight due to poor online reputation management.

There was a study conducted investigating the reach of Brand Social Interactions on Facebook published in the Journal of Advertising Research that returned some impressive results. For every visit the official brand Facebook Business Page received they made 156 social media Impressions.

Don't reserve your time only for dealing with negative feedback, engaging with a customer that took the time to leave you a review will help nurture the relationship and increase lifetime value.

Key stats & findings

• An 'Excellent Consumer Review' increases purchase incidence 7.3%.
• An 'Excellent Online Share' increases purchase incidence 9.5%.
• 51% report being affected by unsubstantiated or malicious reviews.
• 18% of UK businesses have spent up to £25,000 challenging malicious reviews.
• Approximately 9 in 10 people trust online reviews as much as personal recommendations, regularly read reviews of local businesses and read up to 10 reviews of a business.
• Consumers that saw an appropriate response to a negative review reported a 116% increase in purchase intent.
• 4 Negative results on page 1 of Google loses you 70% consumers.