06.03.201618 min read

How User Generated Reviews Affect Conversion Rates

Almost all business owners hate Yelp, but they understand its power.

User generated reviews, in general, are tremendously influential in persuading people to buy.

One study found that 88 percent of consumers trust online reviews as much as personal recommendations and 72 percent of consumers say positive reviews make them trust businesses more. Millennials, in particular, trust user-generated content 50 percent more than other media.

Problem is, customers are more likely to share bad experiences than good ones. Business owners are well acquainted with what I call the “vocal minority,” those loud and influential voices that represent the extremes of your brand experience (a study found over 75 percent of customers almost never write reviews).

It’s important, then, to get the right kind of reviews and really understand how they can affect your sales and reputation.

How do people consume product reviews?

Reviews are a form of social proof.

Both the quantity and quality matter. When you’re looking at buying a book on Amazon, you want to know how many people bought the book and also how many thought the book was excellent (as well as why those who rated it poorly did so). This information removes a little bit of the uncertainty of online shopping.

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Reviews, as a Harvard Business School article put it, “fill in the gaps by providing a tremendous amount of information on which to base decisions.”

There are primarily two ways customer reviews are executed online:

  • Internal word of mouth (WOM): Reviews located on the retailer’s website.
  • External WOM: Reviews located on a third party website (think Yelp reviews).

Amazon is an example of the first category. The reviews are right there on the same page you can purchase the product. Yelp is an example of the second. If I’m looking for tacos in Austin, I can be pretty sure Tacodeli is going to serve me a good one:

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Both types of user-generated reviews are important. While on-page reviews have the benefit of not having to click to another tab to purchase, one study from Nielsen found that 82 percent of Yelp users visit the site when preparing to spend money on a product or service.

The quality, of course, matters too. A Harvard Business School study found that each ratings star added on a Yelp review translated to anywhere from a five percent to nine percent effect on revenues—quite a substantial amount (note: this study centered only on restaurants).

While it’s easy to lambast sites like Yelp for their ability to (seemingly) only attract the most extreme voices, you have to admit it’s nice to see a large amount of (quality) reviews when picking a place to stay on Airbnb. Without a good amount of authentic reviews, there’s an imbalance of information and the consumer’s experience is a bit more opaque.

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There’s a certain credibility to a large number of product reviews from your peers. It takes away some of the doubt and hesitation you’d normally experience in purchasing a product or service—especially one that varies in value like apartments or food.

Both on-site and off-site reviews matter

Because of the prevalence of user review websites, you may think it’s unnecessary to implement reviews on your own site. However, there is a lot of research to support the power of on-site reviews, too:

  • Reevoo found that 50 or more reviews per product can mean a 4.6 percent increase in conversion rates.
  • According to a 2011 study from iPerceptions, 63 percent of customers are more likely to make a purchase from a site which has user reviews.
  • Bazaarvoice found site visitors who interact with both reviews and customer questions and answers are 105 percent more likely to purchase while visiting, and spend 11 percent more than visitors who don’t interact with user generated content.
  • eMarketer found consumer reviews are significantly more trusted (nearly 12 times more) than descriptions that come from manufacturers.
  • According to Reevoo, reviews produce an average 18 percent uplift in sales.

But of course, off-site (third-party) reviews matter, too. At ConversionXL Institute we recently published an Academic Insight that summed up third-party review sites and their effects on sales as such:

  • Third-party websites influence customer reviews & word-of-mouth, which in turn influences sales on retail websites.
  • Third-party user reviews strengthen the impact of sales on retailer-hosted reviews.

On-site and off-site user-generated reviews both matter and they both influence each other when it comes to conversions.

Third party reviews are, by and large, a good thing for consumers as well as for your business. At least in theory, it promotes meritocracy. If your service is good, you get good reviews. If it’s bad, you get bad reviews. Customers are granted greater transparency, and good businesses get more trust (and therefore more business).

On-site reviews are awesome, too—both for the company and the shopper. Who doesn’t love seeing that their Uber driver is rated a 4.9/5? Similarly, I’m sure Uber drivers that pick me up are happy to note I have a shining 4.93 passenger rating:

uber-rating

Reviews bring about a sort of crowdsourced meritocracy, especially when the reviews reach higher quantities. The ebbs and flows even out, and you get a pretty good average to base your opinion off of.

Oh, and one more thing, fellow growth marketers: user generated reviews help your SEO.

What makes a good user generated review?

A good review will bring clarity to your offer, authenticity to your brand, and trust to your product. What’s that look like in practice, though?

We published another Academic Insight that answered that. Here’s what a good review profile usually looks like:

  • A balance of positive and negative comments
  • Actual descriptions of product usage
  • Comparing a product to competing brands
  • Shoppers prefer positive reviews over negative reviews (of course)
  • Conflicting reviews deter shoppers from their ultimate goal of making a purchase decision. In other words, if a consumer reads conflicting reviews about a product they’re considering buying (some love it, some hate it), it’s likely that they’ll just move on to a different product instead of trying to uncover the truth in the conflicting reviews.

However, that last bullet point doesn’t lend credence to you deleting negative reviews. Actually, they can help breed authenticity and trust (more on that in a bit).

Quantity counts, roo

In fact, Reevo found that the quantity of reviews alone correlates strongly with conversion rates:

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So, how do you maximize the effectiveness of your reviews? It’s more of an art than a science usually. Of course, it has to do with the quality and quantity of reviews. But it largely has to do with how you display the reviews, as well.

How to display reviews

The most common way to display reviews is chronologically. This has some benefits (mainly SEO), but also suffers drawback (it’s up to chance which customer review a user sees first). Most eCommerce sites still order reviews by most recent:

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This screenshot is from Guitar Center. While they list by date, they also provide a ‘review snapshot’ with the most helpful (ranked by user ratings) positive and negative review:

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Pratik Dholakiya wrote on the Unbounce blog that we should give more thought to how we display reviews, instead of just arbitrarily placing them in the order of most recent. Here’s how he put it:

Pratik Dholakiya:

“Don’t sort by most positive rating. First off, remember that the star rating itself doesn’t actually influence sales; only the content of the review matters. Second, remember that a wider range of star values actually increases conversions, despite the fact that this means more negative reviews are visible.

Instead, you should consider testing these and other alternatives:

  • Allow users to rate each review, and then sort them by most helpful. The study found that the most helpful reviews on Amazon were also the most likely to use the appropriate linguistic style.
  • Show users a representative sample of the variability in star ratings. In other words, if 50 percent of the reviews have five stars, show them a list of 10 reviews, five of them with five-star ratings.
  • Experiment with showing the most positive reviews from each star rating. In other words, show the one-, two-, and three- star ratings whose actual content reflects the product most positively.
  • Experiment with showing the best linguistic style for each star rating.
  • If you have the resources to code this solution, try presenting the reviews in random order, measuring how each influences conversion rates, and then sorting the reviews by strongest impact on conversions.”

The best way, then, seems to be to feature a few highly rated reviews (by most helpful) and then continue to list by date (for SEO reasons). But of course, you can test different ways of displaying reviews.

What about video reviews?

User generated reviews can also come in the form of videos, and video reviews provide their own set of benefits. We put out an Academic Insight that summed up research on video reviews as follows:

  • Video reviews are more credible, helpful, and persuasive than text-only or text with photo reviews.
  • Video reviews fostered the strongest purchase intentions: Participants who watched video reviews said they would buy more often than participants who saw text-only or text with photo reviews. It’s important to acknowledge that, although someone says they’re more likely to buy a product, this intention will not always come to fruition.

According to Ariel Shemesh, CEO of Webyclip, watching a video review helps differentiate a product and show you how it really works. He told a story about shopping for a new phone here:

Ariel Shemesh:

“Only last month, I was shopping Amazon for a new cell phone case and had narrowed it down to two options. I read the reviews, compared the specs and prices, but still was on the fence.

I discovered that one of the cases had a video review on their merchant page, so I clicked it. Seeing the way that the case looked in real life (rather than in a static image), listening to the description of the case, and watching the video creator put the case on the phone really sold it to me. The fact that he was explaining the product in a non-biased way made me trust that he was telling the truth about it.

Based on the video, I chose that phone case over the other one (It’s great, by the way).”

You’ve probably heard of (or maybe watched) an unboxing video at some point. It’s kind of a weird trend (in my opinion), where “products get unwrapped and torn from their packages and shown to an online audience.” As strange as I think it is, it’s super popular and supports the effectiveness of video reviews and user-generated content in general.

With video reviews—especially if you’re in eCommerce—you can feature them on your product pages just like you would written reviews. But when it comes to third-party sites (YouTube, etc), you have a unique opportunity to work with influencers to make sure the word is getting out and in a positive way about your product.

How to get more (and better) user reviews

Get on the phone

There’s an aversion today, it seems, to getting on the phone and talking to your customer. It’s such a simple, time-tested strategy. Not only can you incentive reviews, but you can gain excellent product and service feedback that can help your optimization efforts.

And also, wouldn’t you rather hear their complaints before the internet via Yelp does?

Talk to the customers that use your product the most. What value do they get out of it? Would they mind giving you a testimonial?

Find your best customers

There are many ways to do it. Find your heaviest users, those who rate you 9s or 10s on NPS (called “promoters” for a reason), whatever—however you do it, try to incite your best customers to give you public reviews.

Apps do this all the time. You’ll be playing around on Tinder (or whatever) and be prompted to give the app a review…

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Of course, there’s a whole art and science of when to ask for an app review. Most people would say you ask right after a user experiences the core benefit of the app. There are also some user experience heuristics for when/how to ask. A Medium article summed it up like this:

  1. Build a great app,
  2. Don’t annoy your users,
  3. Ask nicely, don’t beg

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Anyway, obviously app store reviews are super important for acquisition, so optimizing for reviews is a high opportunity area.

Salvage negative reviews

Negative reviews aren’t necessarily all bad.

First, they’re a learning opportunity. There are always things a business can do better, and all you have to do is listen to your customers to learn some of these things.

Apparently, for every one customer that speaks up about a bad experience, 26 remain silent. So you’re getting some good insight for free.

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Second, negative reviews are an excellent opportunity to turn an impassioned (and pissed off) customer into an impassioned and happy customer. You’re also displaying that you care about the customer experience to all those reading the review.

There’s a term for this, coined by marketing professors Michael McCollough and Sundar Bharadwaj: Service Recovery Paradox.

Essentially, this is when, due to a tactful response and recovery, customer satisfaction is even greater than expected if no service failure were to have happened.

These are the actual effects of negative reviews:

  • Posting negative reviews has a positive effect (increases engagement and potential for new purchases) when posters are reminded of the firm’s usefulness after engaging in posting behavior.
  • Viewing negative reviews that consists of uniformly negative opinions decreases subsequent purchases.
  • When a company responds with a reminder of their value and an apology, it improves perception among negative reviewers.

What’s that mean for you? Respond promptly and appropriately to negative reviews.

Len Markidan from Groove recommends an easy-to-remember framework for dealing with negative online reviews (the framework actually originated with Walt Disney):

  • Hear: Let the customer tell their entire story without interruption.
  • Empathize: Convey that you understand how the customer feels.
  • Apologize: As long as it’s sincere, you can’t apologize enough.
  • Resolve: Resolve the issue quickly, or make sure that your employees are empowered to do so. Don’t be afraid to ask the customer: “what can I do to make this right?”
  • Diagnose: Get to the bottom of why the mistake occurred, without blaming anyone; focus on fixing the process so that it doesn’t happen again.

It’s essentially the same strategy PR professionals have been taught for years when it comes to bad press: get in front of the story, be honest, resolve the issue, and move on.

LawnStarter does this really well, always promptly replying (to both positive and negative reviews) and attempting to fix things when necessary:

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Conclusion

User generated reviews are important. People trust their peers more than they trust brands, so it’s important to understand and leverage customer reviews.

Both on-site and off-site reviews matter. Displaying them in the right way can mean the difference between a conversion and an exit.

Feature image source

 

 

This article was written by Alex Birkett from Business2Community and was legally licensed through the NewsCred publisher network.

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