Impact of Online Reviews
In Marketing, students were taught consumers go through five stages of consumer behavior. Problem recognition, information search, alternative evaluation, purchase decision, and post-purchase behavior. However, most of the stages are done through the Internet. When we recognize a need, the first thing we do is to do information research on the product or service. We then are more than likely to find alternative to what we are looking for. After finding the right product at the right price, we turn back to the Internet and write our reviews of the product or service.
The review stage is the most critical stage for any part of business since every company wants good feedback on the Internet. So, what happens when a customer experiences bad product or service and releases their anger online? One, it can spread like wildfire among the community which creates a negative connotation about the company, or two, management can quickly respond to the customer’s want and need by making changes to their product/service. Of course, option two is the best choice.
Because bad reputation and news spread fast, management must act quickly to stop and resolve any issues. A great example of this was when Netflix first launched in Brazil. When Netflix first started its service in Brazil, many had anticipated it and had high expectations. However, when Brazilians learned that there was a lack of well-known series, they were disappointed. Besides lacking Hollywood movies, Netflix had a hard time acquiring the license for Brazilian movies. Another big criticism they received was the audio quality, especially among users who prefer subtitles to dubbing. Netflix took all the criticisms and reviews into consideration and improved its service in Brazil.
Every potential buyer goes through the five stages of consumer behavior. The second and third step, information search and alternative evaluation, are the most important steps that determines whether the buyer will become your customer. Information search and alternative evaluations are all done through the use of the Internet based on reviews and ratings. As consumers, if we read bad reviews it will drive us away and to look for other options. We tend to believe other customers who are similar to us and when we see negative comments, we will more than likely go elsewhere.
According to ReviewPush, a Facebook poll determined that 20 out of 20 consumers make decisions based on user reviews and when they see a negative review 75% of them will pass the word to their friends and family. Consumer reviews are about 12 times more trusted than descriptions from manufacturers. 90% of the consumers trust recommendations from people they know and 70% from online unknown users. 61% of people rely on customer reviews before making their purchasing decisions. It was estimated that by 2014, 53% of sales from both online and offline will be affected by the Web. With the high number of impacts reviews have, negative comments can drive sales away and businesses need to act quickly to prevent that. When customers post their bad experience with a product/service, management will need to find out about the situation and respond by finding a solution to the problem. Businesses can monitor what others thought of their business and can adjust and adapt accordingly.
Researching online feedbacks and developing responses to complaints are a big part of research and development. With the decrease in survey response rate, online reviews are the next best feedback and review businesses will get. With e-marketing, Management can make changes and develop new ideas and systems to fix repeated negative responses as fast as they are posted. Managers can see what they are doing correctly and make changes to bad ones.
Companies should monitor what customers are saying about them because one bad review can impact sales. Not saying they should reply to everyone who leaves a bad rating, but they need to know when to respond to a negative review and decide whether the person has ‘social status’ within the social media community. If the person who left a bad rating is very influential within the community, then it would be best to make correct the problem. However, if it was someone who has a few followers or subscribers, they may acknowledge the comment but may not correct the problem.
I am a senior at the University of Nevada, Reno, with majors in marketing and management. I am expected to graduate in May of 2012. I would like to pursue my career in the field of research and development.