Do Customer Reviews Influence Purchase Decisions?

Do Customer Reviews Influence Purchase Decisions?

All Featured Sep 26, 2022 6 minutes
Do Customer Reviews Influence Purchase Decisions?

Online reviews change the way customers purchase a product or service from a brand. Online marketplaces like Amazon, Airbnb, TripAdvisor, Zomato have reviews from individuals, influencing the sales generated for brands on these platforms. Additionally, many brands make these reviews a part of their marketing strategy to help improve sales.

Customer Reviews today take many forms. It could be a short video, a detailed article, a short piece on the product page, or even a star rating. When managed well, reviews help create value for both sellers and buyers. It acts as a trustworthy system that improves brand visibility and empowers customers in their decision-making process. It also garners brand advocates and provides a platform for customers to share grievances or negative experiences. It helps brands improve their credibility and creates a feedback loop to improve products and services.

What are customer reviews?

Consumers often share their experience with a product or service after a purchase. This experience may be positive or negative and refers to a review or feedback.

Your brand is what other people say about you when you are not in the room

Jeff Bezos, Founder & Ex-CEO,Amazon

Reviews can become a brand’s advocate in a new market. Everything that makes the consumer experience, from the product or service to an interaction with a customer service executive, becomes a review. Brands need to remember that customers notice every small gesture that improves their experience.

How do reviews influence customer purchase decisions

With a growing online presence, data suggests that only a mere 9% of customers would engage with a brand with an average rating of one-two stars out of five. Customer feedback on a product or service has the potential to influence new customers at almost every stage of their buyer’s journey:

The Buying Decision: A Journey

Broadly a potential buyer of a product or service goes through four stages from desire to decision.

1. Awareness stage

With the growth in eCommerce, online consumer reviews carry as much credibility as a personal recommendation. A brand with a higher rating or over 200 reviews is more likely to show as one of the top results on the search engine results page than one with fewer reviews.

Every new review on a product acts like new content on an eCommerce site. It indicates that the website is active and constantly updating to suit the requirements of its customers. It improves the SEO ranking of the website, boosting its discoverability.

Customers who discover a brand through its ratings and reviews are more likely to consider it if those reviews are good. It helps build trust when hundreds of people talk about the strengths and weaknesses of a product or service apart from the brand itself.

2. Consideration stage

When potential customers discover a new brand, they ought to search for it on the internet to understand what the world says about it. Customers are more likely to consider a product or service from a website with reviews than without it. Additionally, they look for authentic reviews. If a product or brand has only positive reviews, customers may assume it as forged. At the same time, if a brand has more negative reviews, they may avoid purchasing from it.

Reviews help customers feel empowered and confident in their purchase decisions. Data suggests that customer feedback on a product or service may help boost sales by up to 18%. It strengthens the brand credibility and makes it look more trustworthy.

3. Purchase stage

In the last leg of the decision-making process, reviews and ratings help reinforce confidence in a customer. Many websites may use prompts to encourage customers to complete their purchase decision. These include hints like the number of people currently viewing the product, people who’ve added it to their carts or any recent purchases made. It builds a sense of urgency and trust, assuring them of making the correct product purchase.

4. Advocacy

Reviews help expand the conversation around a brand and its products or services. People are more likely to leave a review when their experience is on the opposite sides of the spectrum – exceptional or poor. The advocacy stage benefits the brands by creating a feedback system. Brands encourage their consumers to share their experiences as it helps in improving the product or service.

Building an effective review management system

Brands need to incorporate a review system in their brand marketing strategies. Reviews from authentic sources carry more influence than a brand speaking about itself. New brands need to build review systems to increase their visibility and discoverability. Therefore, organisations must create a review system to request, collect and monitor their online ratings.

Here are some ways in which brands can build an effective system that gets reviews and helps them manage their online reputation:

1. Building the right partnerships

It is advisable to get into a partnership with a robust review platform that can be seamlessly integrated into the post-purchase processes.

2. Offering incentives

Organizations should design incentives linked to the survey responses. This would go a long way in active participation and quality feedback from the customers. This incentivization would also convince the customers that their time is valued by the organization.

3. Set rules for reviews

With so many platforms allowing consumers to leave brand reviews, it is essential to have a team overseeing the reviews to remove fraudulent reviews, address grievances, and collate feedback. Removing all negative reviews may not favour the brand. It is essential to create systems and processes to address them instead of avoiding them. In fact, consumers trust the organisations that respond to negative feedback.

4. Get the timing right

Brands may improve their chances of collecting a rating or review when they prompt a consumer through an email or a pop-up at the right time. Consumers are most likely to leave a review once they’ve used the products. Therefore, including a QR code on the product packaging may act as a powerful prompt to leave a review. Similarly, brands may send out an automated email after 2-3 days of delivery asking consumers for feedback.

5. Be responsive

Appreciating positive reviews and addressing negative ones improves the brand’s image. It shows that the brand values the opinions of its customers and takes active measures to enhance the consumer experience. Brands must have moderators to address each review. Brands that do not respond timely may seem laid-back and garner more negative feedback.

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Key Takeaways

  1. Reviews play a crucial role at every stage of the buyer’s purchase journey. They help improve the brand’s visibility, credibility, and chances of purchase.
  2. Reviews and ratings increase customer confidence in the product and empower them to make informed decisions.
  3. Brands need to build robust review management systems to ask for reviews, collect them and monitor the responses.
  4. Brands must be responsive in appreciating positive reviews and addressing negative ones to improve their online reputation.
  5. Reviews need to be a part of the brand’s overall marketing strategy.
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