Month: September 2015

Shoppers are more likely to buy products that have higher average ratings. It seems obvious. But a recent study from PowerReviews and Northwestern University’s Spiegel Digital and Database Research Center found that the relationship between the average star rating of a product and its sales is not linear. Simply stated, the likelihood of a product being purchased doesn’t necessarily increase as its star rating increases.

The Northwestern research team analyzed ratings and reviews data in the consumer packaged goods industry and found that the number of stars has little effect on purchase probability when the rating is between 1 and about 3 stars. But when the average star rating surpasses 3, so does the likelihood of purchase. In other words, a customer is more likely to purchase a product with a 4 star rating that one with 3 stars.

Purchase likelihood then peaks when the average star rating of a product is between 4.2 and 4.5 stars. Once the average star rating surpasses this sweet spot, however, the purchase likelihood actually drops. Surprisingly, a shopper is more likely to purchase a product with an average of 4.2 stars than one with a 5 star rating.

Take a look at the graphs below and you’ll see that there’s some variation within categories. But the conclusion is the same: a perfect 5 star rating is NOT the most desirable.

Hair Color

 

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Why a 5 Star Rating Isn’t the Best
Why do purchases drop off once the average star rating surpasses 4.2-4.5? The Northwestern research team believes this is because consumers perceive ratings closer to a perfect 5.0 as “too good to be true.”

Consumers are smart and know that a product can’t be all things to all people. And they appreciate negative reviews as an important element in their decision-making process. In fact, previous PowerReviews research found that 82% of shopper specifically seek out negative reviews. Among shoppers under 45, this number jumps to 86%.

Embrace Negative Reviews
Your knee jerk reaction may be to reject negative reviews. But the research from Northwestern proves that this isn’t the best course of action to drive sales. While you certainly don’t want to aim for negative reviews, allowing them on your site brings authenticity to your review content and helps you build trust with shoppers, especially the vast majority of consumers who are actively seeking out these negative reviews.

 

Study explores how specific features of ratings and reviews, such as length and sentiment, impact probability of purchase.

SEPTEMBER 22, 2015 – CHICAGO – An increasingly influential part of the consumer purchase process, ratings and reviews impact purchase decisions more than any other factor except price.  Yet despite all of the research on the power of reviews, the circumstances that guide when and how ratings and reviews are most effective at driving sales is still a largely unexplored topic.

PowerReviews, a leading provider of ratings, reviews and question-and-answer technology to more than 1,000 brands and retailers, worked with Northwestern University’s Medill IMC Spiegel Digital & Database Research Center to release, “From Reviews to Revenue: How Star Ratings and Review Content Influence Purchase,” an analysis of how ratings and reviews influence purchase probability. Using PowerReviews data, Northwestern analyzed the impact of review length, sentiment and star ratings within the fast moving consumer goods (FMCG) category.

“We’re always seeking new information to help our customers – brands and retailers – understand the best ways to employ user-generated content to drive traffic and sales,” said Matt Moog, CEO of PowerReviews. “We’re excited to partner with Northwestern University and the Spiegel Research Center to deepen our understanding of the consumer purchase process through this third-party analysis.”

“While previous research has established that ratings and reviews are influential in purchase decisions, we set out to investigate the circumstances under which they are most influential,” said Tom Collinger, executive director of the Spiegel Research Center. “In our analysis, we found that not only are five star reviews not ideal for today’s skeptical shoppers, but that ratings and reviews carry more weight for items that require a higher level of consideration.”

Among the findings of the study, PowerReviews and Northwestern discovered three key insights:

Too Good To Be True: The Power of Negative Reviews
Contrary to popular belief, the presence of some negative reviews can actually help boost sales. According to Northwestern’s findings, the likelihood of purchase peaks for products with an overall average star rating between 4.2 and 4.5. Products with five-star ratings are, in the eyes of the consumer, too good to be true.

Shoppers understand that every item can’t be the newest, fastest, cheapest and highest quality and often look at perfect five-star reviews with a level of skepticism. While brands and retailers should never aim for negative reviews, it is imperative that they embrace them. The presence of negative reviews builds trust with shoppers and makes overall product review data more credible.

Importance of Star Ratings for High Consideration Items
Northwestern found that when consumers evaluate items that require a higher level of consideration, an item’s star rating has a much stronger impact. Higher consideration purchases are defined as those that pose some type of risk – whether due to expense, safety implication or unfamiliarity with the product or brand. Shoppers look to additional information – such as star ratings and reviews – to help mitigate that risk.

For example, a consumer may not ordinarily seek out reviews for everyday items such as cereal or shampoo, but if they’re considering a new brand or more expensive item within that category, it’s important that review and rating information is available. And if those products are highly rated, consumers are more likely to purchase than if they were not. As a result, reviews are an important resource to have when launching new products or brands.

When Reviews Are Shorter, More is Better
Traditionally, brands and retailers have been concerned with volume of reviews with the mindset that the more reviews, the better. However, Northwestern’s analysis found that the ideal number of reviews depends on the length of the reviews themselves. When reviews are shorter, shoppers prefer to read more reviews, but when reviews are longer and more diagnostic, fewer reviews is acceptable.

For more insights and to download the full report, visit www.powerreviews.com.

About PowerReviews
PowerReviews is the choice of more than 1,000 global brands and retailers to collect and display ratings and reviews on 5,000 websites. An essential resource for consumers as they search and shop online and in-store, ratings and reviews drive relevant traffic, increase sales, and create actionable insights to improve products and services. PowerReviews’ mobile-friendly rating and review and Q&A software is fast to implement and simple to customize, making it easy for brands and retailers to generate more authentic content that is seen by more consumers. The PowerReviews Open Network is the largest in the industry, more than 1 billion in-market shoppers every month, giving retailers and brands the power to reach shoppers wherever they are. For more information, visit www.powerreviews.com.

About Northwestern University’s Medill IMC Spiegel Digital & Database Research Center
The Medill IMC Spiegel Digital & Database Research Center is the first research center at the Medill School of Journalism, Media, Integrated Marketing Communications. It was founded in 2011 by a generous gift from the late Professor Emeritus Edward J. “Ted” Spiegel and his wife Audrey, and fortified by the support of corporations, alumni and friends. The center is part of Northwestern’s long tradition of applied research about advertising and marketing. The focus of the Spiegel Research Center is to do evidence-based, data driven analysis to prove the relationship between customer engagement and purchase behavior. The center’s research focuses on consumer behavior in social media and on mobile devices.

For additional information:
Meghan Spork
Walker Sands Communications
312-241-1474
Meghan.spork@walkersands.com

evo is a leading online retailer of outdoor gear and fashion apparel, headquartered in Seattle, WA. In 2006, evo chose PowerReviews to further connect with customers, enhance the online user experience and offer the most relevant, helpful information to buyers. Currently, over 23,000 products on evo’s website display user generated content.

The team at evo observed that 40-50% of their customers were opening their emails on mobile devices and saw this as an opportunity to improve the mobile user experience and increase the number of reviews written on mobile devices. In order to achieve this goal, evo partnered with PowerReviews to implement a new, fully responsive and mobile-friendly post purchase email.

The Results
evo experienced impressive results after launching their new post purchase email template, including:

• 23% increase in reviews written on all devices
• 204% increase in reviews written on mobile

Want more details on how evo achieved these big results? Check out the full case study.

How Star Ratings & Review Content Influence Purchase

PowerReviews partnered with Northwestern University’s Spiegel Digital and Database Research Center to better understand the influence of ratings and reviews as a whole and the role various review elements play on the probability of sales. Download the guide to see:

Reviews are an important part of a customer’s shopping experience. In fact, the presence of reviews ranks as the most important factor affecting purchase decisions — behind only the price of the product itself.

But here’s the thing: while nearly all shoppers (95%) use reviews, far fewer actually write reviews. PowerReviews research found that only 42% of consumers leave feedback for products they buy. This number dips to 32% for consumers aged 18 to 29.

What would it take to get more of your shoppers to write reviews? More than half of consumers who aren’t writing reviews cited needing motivation to do so. Offering some type of reward or recognition in your post purchase emails can help you generate even more product reviews.

Types of Incentives

Incentivizing your customers doesn’t have to be an expensive endeavor. Here are a few of the different types of incentives that have been successful for PowerReviews clients:

• Sweepstakes: Sweepstakes are proven to improve review generation by up to 100%. The good news is, implementing a sweepstakes doesn’t have to be a lot of work for you. If you’re a PowerReviews customer, you can use the $1,000 PowerReviews Sweepstakes to incentivize customers.
• Using an Existing Loyalty or Rewards Program: Do you already have an established loyalty or rewards program? Use it to encourage reviews. For example, if a customer in your loyalty program writes a review, she’ll get 10 loyalty points. Once she accrues a set number of points, she’ll receive some sort of promotion, like free shipping or a discount code.
• Free Shipping or Discounts: Offer your shoppers a discount or free shipping to thank them for writing reviews. Not only will you generate more reviews, you’ll also give shoppers an excuse to shop with you again.

Remember: When developing incentives, it’s key to understand your audience. An incentive that works well for one audience may not resonate for another. Test different incentives to see what performs best for your brand.

Make the Offer Obvious

If you include a sweepstakes or other offer in your post purchase emails, make it prominent. If possible, include the incentive in the upper portion of the email so shoppers know what you’re offering, even if they don’t scroll through the entire email.

And don’t offer more than one promotion in the same email. If you include multiple offers, your audience will likely get distracted.

Learn More Best Practices for Post Purchase Emails

Looking for more ways to generate reviews with your post purchase emails? Check out this on-demand webinar