Wednesday, October 21, 2009

Want to be trusted? Use consumer reviews...

People buy from businesses they trust. Whether it's an expensive B2B purchase or a simple dinner out, there are risks involved in every transaction and consumers choose to deal with businesses they believe minimise their risk. If they feel that a particular restaurant has less chance of disappointing them and embarrassing them in front of their friends, that's the one they'll choose. And if it makes sense for this type of transaction, think about situations where there's more money involved, more permanent repercussions of the purchase, or more personal services being selected. Trust me, trust is the holy grail...

So, if you're a business owner or marketer, how do you build trust? Well, there are 3 pieces of research that show how online consumer reviews can go a long way towards building a reputation people trust...
1) Almost two-thirds of people read consumer-written reviews on the internet (Deloitte & Touche)
Yes we all know that the world has gone online but did you know that all kinds of people are looking online for all kinds of businesses? We don't just research our electronic purchases online, these days people use the web to search for and scrutinise all types of businesses. One case in point is ADM Motors - a mechanic that joined WOMOW a couple of months ago. It's owner Adam says that he "never thought so many people would be looking online for a mechanic - boy was I wrong!" Since joining he knows of at least 10-12 new customers that have come to him after reading reviews about his business online - some driving all across town just to use a mechanic they feel they can trust (without ever having met Adam or used his services previously).
2) 78% of people trust other consumers' recommendations above all other types of advertising and marketing (Nielsen)
So, given that people are looking at online reviews, how much impact do they have? Well according to a recent Nielsen Golbal Online Survey of over 25,000 consumers from 50 different countries, people trust online reviews more than any other form of marketing or advertising. That's right, people don't need to know who has written the reviews, they believe what they read. The only source of advice found to be more trusted was a personal recommendation from someone they know.

Some of the businesses on WOMOW have experienced this heightened trust first-hand with Greg Mulroy from Body and Scents Perfumery saying "when people read our reviews online it gives them confidence that they'll get exactly what they expect and not a fake copy". Similarly, Nicole Seagren from Vision Finance encourages prospective clients to check their reputation on WOMOW "it gives them a positive mindset so they come to us expecting a good result and we get off to a good start".
3) People that read reviews are 30% more likely to purchase (Coremetrics)
So how does trust relate to sales? Well, studies by Coremetrics show that when businesses make online reviews easily acccessible, sales jump by an average of 30 per cent! Again, plenty of businesses on WOMOW are finding a fairly direct relationship between the number of positive reviews they have and the new clients they get from WOMOW. Misty's Diner has lots of positive ratings on WOMOW as they've been encouraging customers to enter reviews for almost 2 years now. This effort is paying off as Misty now attributes around one third of her revenue to customers that read her reviews online.

But are consumer reviews a short-term phenomenon that will go away sometime soon? Well, has labelled this the "Transparency Triumph" and predicts that even though review sites have been around for some time now, "we ain't seen nothing yet". They note that the trend is empowering consumers as never seen before - something that people aren't likely to give up without good reason. They also see the trend helping savvy businesses build inspiring brands and say that those that embrace consumer reviews are set to benefit as (in their words)...
"Reviewing is the new advertising".

Click here for more information on using WOMOW to build a bank of online reviews.