Reviews Are Your Competitive Advantage

Why does anyone care about reviews? Why do consumers and marketers alike pursue them? And why would a marketer or a brand actually want stars to show in their organic and paid online search results? 

Let’s start with the question of why do people love, rely on, and use consumer-generated ratings and reviews at the rate of 97% (% of respondents reporting that they refer to reviews before making a purchase--BIA/Kelsey), and 97% reporting that reviews influence buying decisions (Fan and Fuel)? According to this data, virtually everyone uses reviews to make purchasing decisions. 

But why are consumer-generated ratings and reviews so widely used and relied on for making a purchase decision of every kind, from coffee to cars, and dentists to data plans? Why has checking product or brand reputations, most often by way of their ratings and reviews, become as ubiquitous as checking hours of operation, price, or location? 

The magnetic appeal to both the quantity and quality (average score) of ratings and reviews is primarily rooted in two subconscious principles of psychology and brain science:

1. Popularity = risk mitigation: The psychological principle of “popularity” states that people generally prefer to buy popular products and brands for several reasons:

A. Scientific research has shown that people tend to believe “popular” products (including those with lots of reviews) will offer better utility and value than unpopular products because the assumption is that only good products have the capacity to become popular. People assume that all those who have purchased and left reviews have done their research, and concluded that it delivers solid performance and value, and therefore others simply follow their lead. And the momentum almost becomes self-perpetuating. This is why gaining market share, popularity, and reviews by the truck-load are critical to growth momentum.   

B. The Herd Theory states that people feel more comfortable following the herd, and they tend to buy what others in their peer group are buying. It’s a survival mechanism to blend-in, and be accepted by the herd, for fear of being an outcast. Humans survive and pro-create better when part of a large group, so social acceptability is both an innate and learned behavior.  

Perceived popularity can be assumed based on the sheer volume of online reviews for the brand, which then kicks-in the herd mentality and makes for an easy decision-making shortcut.    

2. Reviews = Mental shortcut: The human brain is forced to make hundreds or even thousands of decisions in a day, and therefore decision making efficiency is critical to mitigating analysis paralysis, and even survival. So the brain uses shortcuts to make brand preferences and decision making faster and easier. Decision making using mental shortcuts may include how a product is packaged, presented, named, described, or priced. Even the caliber or ambiance of the retail or Etail environment. As well as its perceived quality, popularity, how many reviews it has received, and what the average review rating is. How many times have heard someone say “I picked this one because it had a better rating and a ton of reviews.”      

Reviews Are Important to Consumers

Perhaps because reviews are so widely and readily used for decision making, a recent survey by Synup found that 55% of respondents said that review sites were an important source of retail information.  

The History of Reviews

Pre-1999 the Better Business Bureau (BBB) was the first legitimate online resource to leave and find company or brand reviews. While Amazon was the first website to allow for product reviews in 1995. In 1999 the online review space expanded with a few early pioneers such as Rate It All, Deja, and Epinions. Followed by CitySearch and Yellowpages in 2001 and Yelp in 2005. ShopperApproved entered the scene in 2010 as a review collection and promotion tool, with a unique combination of verified customer reviews of both the seller/merchant and the product. By 2012 Facebook had collected more reviews than any other review site, soon to be surpassed by Google in 2016.   

Predating online reviews was J.D. Power, founded in 1968 by James David Power III. Power had previously worked in advertising and doing customer research for the Ford Motor Company, where he felt customer satisfaction data was too often overlooked. 

J.D. Power's marketing research consists primarily of mailing consumer surveys. J.D. Power ratings are based on the survey responses of randomly selected and/or specifically targeted consumers. Although publicly known for the endorsement value of its product awards, J.D. Power obtains the majority of its revenue from corporations that seek the data collected from J.D. Power surveys for internal use.  

Why Online Reviews Are Coveted by Consumers

The internet is a place where anyone can create and post content of any kind. So the internet in a sense became the great equalizer or democratizer of information. People love the internet for its ability to seemingly serve up the closest thing to a 360-degree view of a company, product, or individual, en masse.  

With the internet, consumers became enthralled with the idea of getting alternative, instant, transparent, and even authentic perspectives on companies and products that previously controlled the narrative almost entirely.  

Online customer reviews, of course, came as the natural result of the online democratization of content, ideas, opinions, news, and entertainment. Otherwise known as Consumer Generated Content or User-Generated Content (UGC) in the context of company or product ratings and reviews. Shoppers seek consumer-generated reviews as a tool to get honest and authentic feedback on the product, service, etc. As well as a filtering tool to make decision making easy and fast. 

How People Use Reviews

Depending on the individual or product category, people tend to have their own criteria or “system” for choosing a vendor or product, which may be based on any combination of factors, including the number of reviews, the average review rating or score, the recency of the reviews, the detail, specificity or quality of the reviews, the credibility of the review platform, and whether the reviews are generated by verified or actual customers. 

Some people only read the best reviews with the highest star ratings, others read the reviews with the lowest ratings to see just how bad the product or service was (worst-case scenario) and to see how the company responded and rectified the situation. While others only weigh the most recent reviews. 

To learn more about how reviews drive business, get the free ebook “The Impact of Local Reviews on Profits: How to Turn Your Reputation Into a Competitive Advantage.” This helpful resource includes research, statistics, and best practices for understanding and using the power of reviews to grow your business. 

Why Reviews Can Become Your Competitive Advantage

Ratings and reviews have a significant impact on your marketing KPIs in 3 key areas that fuel growth:

1. Visibility: Fostering the creation and promotion of hundreds, thousands, and even hundreds of thousands of customer-generated reviews is free content. And we all know that content improves organic online search visibility, or SEO (Search Engine Optimization). Now consider the fact that this content is packed with your brand, product, and location keywords, which is critical to SEO. Taking it a step further, this keyword dense user-generated and frequently produced content (all of which the search engines love) is spread across multiple review sites throughout the web, including Google My Business and your own website, creating a larger, and more authentic digital footprint than you could possibly produce on your own.
2. Clicks: Increasing your clickthrough rate from both paid and organic ads, review sites, and other digital assets are critical to driving traffic, engagement, and conversion opportunities. Without traffic, you have nothing. Ratings and reviews help establish the visibility, credibility, and trust that you need to improve your CTR (Click Through Rate). Google, for example, states that stars in rich snippets will increase the CTR by 17% on average. I have personally seen 20 and even 30% CTR improvements.
3. Conversions: The final step in the lead funnel, buyer journey, or conversion process, is trust. If people do not have significant trust in your company, product, service, reputation, or offer, they simply will not convert. Your Conversion Rate (CR) is the ultimate moment of truth. Your ultimate measurement in ROI, ROAS or ROMI, and the ultimate indicator of your marketing efficiency. This is what all your efforts in research, advertising, and creativity have to lead up to. If you fail here, you fail entirely. This is the point where you must do everything possible to establish trust. Including guarantees, warranties, verified customer testimonials, ratings and reviews, BBB membership, and transparency in any way that you can create it. Having as many authentic, verified customer ratings and reviews as you can muster is a large part of this final conversion process. Again, having lots of ratings and reviews creates trust through popularity and herd mentality, and it facilitates easy decision making (mental shortcut).

What if you could increase your conversion rate by 19 to 50%? What would that do to your gross sales revenue and profitability if you just do that, without discounting or adding any additional incentives? I have seen this happen by simply adding quality, credible and helpful user reviews.

Trust Matters

The credibility and trustworthiness of both the reviews and the review platform or site in which they reside is also a critical factor in their effectiveness in driving conversions. The most glowing 5-star reviews are not going to be effective if they are perceived to be fake, paid, or incentivized reviews. And the same goes for the platform or site those reviews are on. This, in turn, could cause users to lose trust in the platform that provided the reviews and they may even stop using the site completely. 

About the Author

Duane “DJ” Sprague holds a Master of Science degree in Integrated Marketing Communication (IMC) and has been in sales, marketing, advertising, and PR leadership for over 30-years. As a marketing and advertising executive who needed to understand the needs and opinions of the market, DJ started in the customer review business in 1995 when he created and launched a customer survey for Toyota, later working as a ghostwriter and consultant for J.D. Power. He also executed surveys for thousands of automotive and RV dealers across the US and Canada with the OCT Group and was a columnist for Automobile Dealer Magazine. As CMO of Byrider, a national dealer franchise with 170 locations, he created and executed the brands’ first reputation management initiative that resulted in a 19% sales increase. 

After decades of using his survey and market research strategies from the client and agency side of the desk, DJ now serves as CMO of Trust Brands, a reputation management firm. Trust Brands consists of four entities that help companies collect, promote, and respond to verified customer reviews and ratings, plus website and personal information security, and shopping cart optimization tools. These products are used individually and collectively by over 7,000 companies to increase trust, visibility, clicks, and conversions. The Trust Brands group of companies includes Shopper Approved, Local Reviews, Trust Guard and Cart Rocket.