PRODUCT REVIEWS PAY OFF WAY MORE THAN YOU THINK
20% of sales are driven by reviews, to the tune of $400B
“It’s a virtuous cycle — the more reviews, the more buys. The more buys, the more reviews. The more buys, the higher your rank in search and the more sales you get.” Alice Kim, owner of online cosmetic brand Elizabeth Mott
Chances are, a week or two after you buy something online you’ll get an email asking, “How’d we do?” and a link to review the product.
Your response and those of other customers are worth a lot: $400 billion, according to one analyst.
“It’s a virtuous cycle — the more reviews, the more buys. The more buys, the more reviews. The more buys, the higher your rank in search and the more sales you get,” said Alice Kim, owner of online cosmetic brand Elizabeth Mott.
Even a single comment can make a huge difference. Just going from zero review to one increases the rate at which online window-shoppers actually click the “buy” button by 65%, said Matt Moog, CEO of Power Reviews, a company that makes ratings and review software.
He estimates 20% of sales are driven by reviews and one-third of online shoppers say straight out they won’t buy a product that hasn’t been positively reviewed.
Increasingly, online reviews matter for all buyers even though online sales made up just 8.3% of U.S. retail sales in the fourth quarter, according to the Department of Commerce — and Amazon’s reviews matter most of all.
With global e-commerce product sales pegged at $2 trillion, that’s $400 billion tied to the collective voice of consumers.
Fifty-five percent of shoppers start their buying research on
Amazon, a survey by marketing firm BloomReach found, and half of all shoppers say they rely primarily on Amazon for reviews, according to Market Track, an e-commerce analysis firm.
Almost a quarter check Amazon even when they’re physically standing inside a store.
“They can be in Best Buy or Home Depot, but they go on their phones to check Amazon reviews,” said Greg Perry of One Click Retail, an e-commerce data company.
Amazon’s reviews rank so highly in part because they’re considered the most trustworthy, even though — like other sites — it’s not immune from people using the reviews for ancillary purposes, say, last November’s flood of onestar reviews of anchor Megyn Kelly’s book hours after it went on sale, which the Los Angeles Times said was orchestrated by a proTrump forum on Reddit.
The Seattle retailer has gone to great lengths to root out fake reviews, launching more than 1,000 lawsuits against those who post them, according to the company. It also marks and gives more weight to reviews by people who actually bought the product and has introduced a machine learning algorithm that gives more weight to newer, more helpful reviews.
In October, Amazon began requiring that any review of a product given to the reviewer for free or at reduced cost be marked as such.
“Our focus is to make sure our reviews are authentic and helpful,” spokeswoman Angie Newman said.
Whether consumers realize it or not, the notes they hastily type out, whether glowing or scathing, wield tremendous power.
“Before, you might have told 10 people about a product. If you publish your thoughts on Amazon, you might reach a million,” said Daniel Lemin, chief of consulting at Convince & Convert, a digital marketing strategy firm.
Those reviews are worth a lot of money. Power Reviews data show that reviews impact about 20% of sales on sites that have implemented them well. With global e-commerce product sales pegged at $2 trillion, that’s $400 billion tied to the collective voice of consumers.
All of which comes from the 5% to 10% of customers who actually write reviews.
Moog’s research finds they tend to fall into four main categories.
First are those who really love a product and then those who really hate it. Next come the more altruistic ones who have a pay-it-forward mentality. They use reviews, so they feel it’s only fair that they write them. Finally, there are those who have strong loyalty to the retailer or brand they’re buying from and want to help out.
Negative reviews can be beneficial, too. Research shows that if all the reviews are uniformly good, nobody will believe them. On Amazon’s 5-star rating system, it turns out that between 4.2 and 4.4 is optimum, Moog said.
Overall, the first bunch of reviews for a newly-launched product are the hardest to get but also the most important.
“You need to get 20 reviews and you’re golden,” said Keith Anderson, strategy officer at Profitero, which helps online sites price their products competitively.
After that it’s a numbers game. If there are a thousand reviews, one more good or bad doesn’t matter much.
And at a certain point, reviews take on a life of their own, becoming a way for the community of buyers to interact.
Neel Premkumar’s company Dyla makes Stur, a popular organic drink mix. When he launched in 2012 he read every review and responded to every negative one immediately.
“Now if someone has a negative review, our customers will go in and respond to it themselves,” he said.