The Impact of Customer Reviews on Purchasing Decisions

Call them what you want – a testimonial, review, feedback, rating, or endorsement – customer reviews are your customers’ way of sharing their opinions about your brand’s products and services out on the world wide web.

With some many choices, consumer expectations have shifted. Shoppers not only demand specific information from manufacturers and retailers, but information from other consumers as well. In fact, 95% of consumers consult customer reviews before considering a product or service. We put together points, based on a study done by PowerReviews and Northwestern University’s Spiegel Digital and Database Research Center, that prove how powerful customer reviews can be for businesses.

1. Reviews are Essential to Reach New Customers

With new developments in technology, it has opened the door and enabled customers to discover and share purchase decisions immediately. As a result, reviews have become a primary source of info shoppers use to decide when, where, and what to buy. Of the 95% of customers who consult reviews before a purchase, 1 in 4 consult customer reviews before every single purchase. Among the different age groups, the 30-44 age group were found to be the most adamant about consulting reviews before a purchase.

2. Even Negative Reviews are a Must

Negative reviews were also found to be necessary. The study found that customers actually start to question the authenticity of a brand that claim to be everything: The best, cheapest, highest quality. Consumers understand that products can’t be all things for all people; one’s complaints about a certain aspect may not be as important for another customer. One big finding unearthed by the study was this: customers consider the review and the reviewer into consideration. If the reviewer seemed unlike the reader, they may discount the authenticity of the review for them personally.

3. Reviews Are Highly Influential

Reviews on third party sites or on a company’s own website can help establish authenticity and trust for customers. The study found that ratings and reviews ranked highest as the most influential factor affecting purchasing decisions. The transparency established by online reviews even exceeded the importance of the family/friend recommendations, the brand, or whether or not there was free shipping.

4. Especially for Big Purchases

It also seems that more emphasis on customer reviews is placed when a customer is considering a big ticket item. In fact, the higher the purchase price, the more importance is placed on customer reviews. This is because customers items such as personal electronics, computers, and appliances are based on personal preference. Consumers want to know how well the products work and if other customers are satisfied. Customers are able to match their expectation with other customers’ experiences who have actually used the product.

Review Recommendations:

The Magic Number for Online Reviews

In short, the study found that the ideal number of reviews will vary based on the brand’s products, services, and price points. However, most consumers in this study found that they need no more than 10 reviews in order to make a purchasing decision. Still, it’s important to continually encourage new reviews on review sites and websites to keep feedback continual and up to date.

How to Get More Online Reviews

Although almost all businesses recognize the importance of online reviews, especially in regard to the findings above, one of the biggest challenges for businesses is getting more of them. This study found that less half (42%) of customers report leaving feedback of the products they buy and if they do, they don’t do it for every purchase. In fact, those who are prompted to write a review after a transaction were 3-10% of customers. The study suggested for brands and retailers to make the process as quick, simple, and as painless as possible to secure the best chance of participation.