Effect of Online Reviews on Consumer Purchasing Habits

Online reviews are ubiquitous, and almost everyone who uses an app or surfs the web encounters them all the time. This broad usage varies significantly to the pre-digital age. Instead of expert reviewers, there’s a new breed of crowd-sourced reviews that people use to make purchasing decisions.

This new era replaces Word of Mouth and expert reviewers and puts the power in the hands of the crowd. All of this emphases brings up the question, how do these reviews influence shoppers? The query is crucial enough that several studies exist to research the issue.

report by Lisa Hankin for the University of California, Berkeley, The Effects of User Reviews on Online Purchasing Behavior across Multiple Product Categories, delves into the correlation between reviews and buying behavior in details.

Keep in mind; there are now many sources for ratings. In the past, marketplace websites were the primary place where they mattered. Currently, some independent websites and apps track consumer satisfaction. Not only that, social media networks and other distributors of product links also allow for ad-hoc feedback. That means a continuous review cycle is now an expected part of internet behavior.

Does Positive or Negative Feedback Impact Purchasing Behavior?

Do all of these signals, both good and bad, actually persuade and inform the buying process? Studies that attempt to find out the answer show mixed results. One such research suggests that eBay users ignored negative feedback and only positively reward listings with higher prices by a small margin when it was positive. However, the consensus seems to be that higher feedback means more sales and higher margin.

That makes sense but may not hold true in all cases. There are times where reviews on Marketplace sites like Amazon may be harmful. However, the downcast vote may reveal a more profound understanding for the buyer. For example, the person may have complained that a battery pack was not part of the deal. The next buyer who sees that feedback may already know this crucial fact and ignore the negative feedback in its entirety. Amazon, in particular, has many bestselling products with quite a few poor ratings.

A certain amount of negative reviews are expected, even for top-quality products. There’s no avoiding it in the real world, and people expect there to be some present. Most likely, they’ll read the reviews, and it will help them make a final, balanced purchasing decision. If the feedback were entirely positive, the result would probably be that the person was suspicious of the positive reviews.

Recent Study Shows Correlations Between Positive Ratings and High Sales

Another recent report from the School of Management, Guangdong University of Technology, took a look at purchasing habits for 400 shops on Taobao. What the researchers determined was that positive reviews were necessary, but picture reviews and excellent descriptions also were crucial factors. Curiously, they also found out that moderate and negative ranking factors did not hold as much correlation. Therefore, it seems likely that current behavior follows a similar pattern to what many suspects.

Customers want information to decide on whether to make the purchase. They look for pictures and videos of the product in use, positive reviews, and respond well to well-written descriptions. The eWOM is a determining factor, but the most reliable correlation comes when a positive review, well-written copy and a well-chronicled image collection appear together. As expected, excellent sellers should strive to offer a superior product experience, and their digital assets should reflect professionalism. If they do that and get trustworthy ratings and reviews, they have an edge.

Additional Information Is Gaining in Popularity

Most marketplaces now offer ways for users to upload reviews and pictures to bolster their reviews. These carry high value because they allow for precise explanations of why a customer may complain or what they love most about a product. Those type of expository materials add value and help the purchases decide because they offer supporting information. A complaint about how something doesn’t work with an explainer video has an impact, and so do the ones where people show the product working for them.

This type of feedback has become so valuable in the buying process, that most merchants offer incentives to customers for their contributions. The explosion in online shopping means data collection is increasing exponentially. Part of that is ratings and reviews, which add context for those who are looking for a conclusion to their research.

A study by Assistant Professor Ali Yayli of Gazi University looks at reviews in great details. It’s not enough to mention that a consumer’s report was positive or negative or neutral. People now also consider relevancy and timeliness when discussing the merits. Some even insist on consistency across several reviews. Studies need to isolate each of these moving pieces to reach further conclusions. Yayli breaks down the research and paints the picture of sophisticated shoppers who know what they’re looking for when it comes to eWOM.

Shoppers Value Reviews on Trustworthy Sites

Buyers now also judge the general trustworthiness of the site. In a sense, the most favorable reviews tend to be on an authoritative website, are recent, and help put the purchase in a proper context. Supporting materials, such as demonstrations, and testimonials also help boost sales. Companies that sell online are aware of these conclusions and are continually seeking to boost participation from customers. As they do, the overall quality of the data set improves and so does the trustworthiness.

An emerging trend shows four primary factors in product ratings and reviews that are helping to drive sales.

  • Recency – The newer, the better
  • Consistency – Do product reviews and rating touch on similar themes?
  • Supporting materials – There’s an increasing emphasis on image galleries, video uploads, and explanatory material that helps the general review.
  • Authority – Is the site itself authoritative? If shoppers can trust the review system, they place more value on the feedback.

Word of Mouth continues to evolve as eWOM. All products and services online experience it. The average internet user is comfortable leaving feedback and using it for research. As their behavior grows, they are now expecting even more detailed data and expect recency. Stale or outdated reviews may indicate a drop in sales, or they may be the result of it happening. It’s worth it for vendors to stimulate ratings to keep their listing active and selling.

Marketplace websites will continue to improve credibility and bolster their policies. Many now have “Verified Purchase” badges that identify the person is reviewing a confirmed purchase. These sites also offer ratings and direct replies to other’s reviews. That means anyone can refute or expand on one, adding more value to the information chain.

9 out of 10 Internet Users Trust Reviews

Constant Contact said that 90% of internet users use reviews as part of their decision-making process. With such a wide footprint, the area receives a lot of attention for e-tailers and small businesses. This study shows that people don’t just take into account marketplace and website reviews, they also place weight on social media reviews. Facebook and Twitter pages collect feedback which also influences purchasing in a multi-channel environment.

All of this eWOM continues to have a profound impact on digital sales, which grow year after year. The trust that comes from the overall ecosystem of feedback plays a central role in ensuring confidence. People are well aware that these systems are not perfect, but they do a good enough job of answering fundamental questions. They help surfers save time, and they allow vendors to increase sales based on merit. The products that gather the highest number of reviews will continue to sell well, and most likely continue to gain more positive feedback.

Recency and In-Depth Reviews Are Gaining Traction

A virtuous circle of feedback and product quality keeps listings alive and ranking. A review of the studies shows that people still love favorable ratings, but they’re going a great deal more into depth to research. Videos and images impact them powerfully, and they also do a deep dive into reviews looking for supporting or detracting information. When an entire picture of the product becomes clear, they’re able to purchase with confidence.

Product research is a fundamental process in the digital space. The means and methods are evolving, and the amount of data is expanding. It’s likely that shoppers will continue to look at eWOM as a final step when buying. Negative feedback is never good, but some of it is unavoidable. Companies that focus on accumulating fresh, positive reviews gain an edge over those who have stale, or negative ones. It is worth getting new, positive comments to overcome the older ones. That strategy aligns with modern research and could be a fast way to boost sales, especially for business managing multiple listings.

May 15, 2018 / by / in
The Pros And Cons Of Retargeting In Advertising

Ever notice how you seem to get repetitive ads for a product or service that you have looked up before? A plane ticket, say, or a pair of hiking boots. You looked it up one afternoon, but then had second thoughts, or got distracted, and now ads for that same thing keep popping up in your Facebook newsfeed or below cat videos on YouTube. This is retargeting.

Retargeting works by including a pixel (line of code) on a webpage. When someone visits that page, the pixel drops a cookie into their browser which tracks that user and targets them with specific ads—specific to the product, service or brand they had been looking at. The result is a bunch of banner ads diligently following that potential customer, reminding them of the product or service, and telling them to take action (“BUY NOW!”).

This is a revolutionary marketing tool, and one with great potential for improving brand recognition and conversion rates. However, not everyone appreciates the upsides. Retargeting is a marketing tactic that has both pros and cons. If you are considering retargeting as a marketing tool, here is a breakdown of the good and the bad.


IMPROVES BRAND RECOGNITION: One basic and virtually undeniable benefit of retargeting is that repeated exposure improves brand recognition. The more someone sees your brand, the more likely they will be to recognize it in the future and consumers are more likely to buy a product from a brand that they know. Reinforcement is a fundamental component of learning, and it is also something that retargeting is great at. Numerous studies have shown that the context of the exposure is less important than the exposure itself, and retargeting definitely delivers.

ENCOURAGES RETURN: So someone visited your site but left without buying anything—that doesn’t necessarily mean that they decided against it. The internet is loaded with distractions, and internet users have decidedly short attention spans. Maybe someone sent them a hilarious video, or their phone rang, or they realized they just didn’t need your product at that moment. Without retargeting, that potential customer could be lost to you forever.

Retargeting sends that potential customer little reminders. The typical retargeted ad is a banner—aesthetically pleasing, often funny, and always with a call to action. Perhaps the potential customer will change their mind after seeing the product a few more times, or presented at a discount. Maybe they now have the cash to make a purchase. Essentially, retargeting gives you more opportunities to make an impression, and encourages the potential customer to return to your site.

Most internet users do not click banner ads, so it is difficult to track retargeting directly. However, applications such as Google Analytics will track traffic to your website. If a marked increase corresponds with your campaign, well, the cause is clear.

COST EFFECTIVE: If someone visited your site once, chances are very high that they are at least somewhat interested in what you have to offer. By focusing advertising efforts on individuals who have already demonstrated an interest in your brand, you are simply reinforcing an interest that already existed. Unlike other forms of marketing, which may offer your message to a broad audience—many of whom will frankly not care a whit about your business—retargeting is specifically marketing toward an interested audience. You’ve narrowed the odds that the recipient of the ad will respond.

This increased efficiency pays off. Studies have shown that retargeting provides a much higher return-on-investment (ROI) than other forms of digital marketing. Since the marketing “hunt” has effectively been removed from the equation, retargeting is often a cheap alternative to other strategies, and typically boasts lower cost-per-click.


IT’S ANNOYING: Creepy, weird, and annoying are three words often used to describe retargeting. Too many impressions is the main cause for complaint—it seems that some retargeters simply don’t know when to stop.

When an interested user looks at a digital camera then has that same camera follow them around for weeks, plastered all over every site, it may do a little more than improve brand recognition—it’s going to drive that person nuts. Making your product a source of frustration is not exactly the best way to make people buy it. As a rule, humans do not appreciate being pestered.

IT CAN BE INEFFECTIVE: Retargeting is particularly annoying for customers who have already been converted—that is, who have already made a purchase, or even bought the very product that is being advertised to them.

Be careful when selecting your retargeter, and choose one that employs segmentation (showing different ads to visitors with different degrees of loyalty—i.e. interested versus converted). Moreover, ensure that a “burn pixel” (that magical line of code that releases a customer from targeted ads once they have made a purchase) is included on your thank-you page in order to spare your new customer the now redundant campaign.

IT CAN BE OFFENSIVE: Some see retargeting as an invasion of privacy—a prickly issue in today’s social climate. While retargeting does not collect personally identifiable information—i.e. information such as age or gender which could be used to identify an individual—many still feel that it is inappropriate. While retargeting complies with laws and regulations, it simply does not feel right to some internet users, and viewing your brand through such means may cause them to view your brand in a negative light. While many internet users do not feel this way, some do, and using retargeting will inevitably alienate them.


Retargeting is a marketing tool that can be extremely effective and helpful for your business, but it isn’t without its drawbacks. Improved brand recognition, increased return traffic and moderate cost are countered by the risk of annoying or offending potential customers, or simply missing the mark altogether. It is best to evaluate your current marketing strategy and your long-term goals in order to decide whether retargeting is right for your business.

April 1, 2018 / by / in
Social Media Guide For Small Businesses

Social media has opened many doors when it comes to business and marketing. On the one hand, these networks have greatly increased competition among small businesses, as access to wide exposure results in a market saturated with alternative options. However, this same access to exposure—either at a very low cost or even free—can be hugely beneficial, if approached correctly. With all of the social networks out there, entering the social media game may seem overwhelming. This guide should help you get started.


Like any successful strategy, social media success relies on creating a plan based on what you wish to achieve. Of course “likes” are great, but you’ll want to look beyond these somewhat superficial markers to more grounded results, such as conversion rates and lead generation. Set specific goals, and make sure that they are measurable—you’ll want to be able to track your progress.

If you are having trouble getting started, consider evaluating your current social media activity—who is currently connected with you, and by how much would you like to increase or improve connectivity? How active are your competitors on social media, and how would you like to perform in relation to them? Look at industry leaders like Netflix and Pepsi and decide how you might emulate their successes.


In order to reach your target audience, you’ll need to know who they are, where to find them, and how they use social media. You may find it helpful to create customer personas—basically just fictional characters representative of your target audience. Use any information available to you (which is quite a lot with the internet)—customer interviews, social media activity, surveys, focus groups, etc—to determine demographic trends within your target audience. Then simply gather this information into your personas.

Create representative characters complete with ages, locations, occupations, consumer goals, and even stock photos. Knowing your audience and keeping them in mind will no doubt be helpful in determining what to post on social media.


Social media marketing takes time, so you want to make sure that you’re investing your time in the strategies most likely to succeed. One of your first considerations should be which social media platforms to utilize. Each platform has its own benefits:

  • Facebook: Largest social media platform with over 2 billion users.
  • Twitter: Focus on brief 280-character messages to reach audiences efficiency.
  • Instagram: Visual platform relying heavily on aesthetics.
  • Youtube: Most popular platform for online videos.
  • LinkedIn: Largest social network for professionals.
  • Pinterest: User-driven platform ideal for promoting action.

Bear in mind that while social media may be a cheap or even free alternative to traditional marketing, it still takes considerable time and energy to execute properly. Be sure to select the platforms that will work best with your business. Make it easy on your yourself and begin with only one or two social media platforms until you’ve gotten fully into the swing of things.


With your goals set, research done, audience in mind and platforms selected, there’s nothing left but to begin. In order to build your brand, you should expect to spend about a half hour per day on social media activities when you’re starting out, and this will only increase as your business expands and your social media prowess develops.

Take cues from the competition on what sort of content to post. Readers will respond better to helpful and useful information. Think of what problems your readers may be facing, and what information relevant to your business might help them resolve these issues. Providing information that directly assists your readers will make them view you as an expert. In the end, helpful information will keep readers engaged and make them more likely to read more, or to return to your pages in the future.

All of your social media accounts should connect to your website, and your website is truly the epicentre of your online presence. Post content in the interest of engaging your audience, funneling them toward your website an—ultimately—converting them to paying customers.


Social media is like a non-stop wind circling the globe. The online conversation never stops, and at any time people may be discussing your brand. In order to find success in this whirlwind, you’ll need to join in on the conversation. Keep an eye out for mentions of your brand and respond to them, even the negative mentions—especially the negative mentions. This active participation in the banter allows you the opportunity to control the conversation, and steer it toward the positive. At the very least, your participation demonstrates that you are an engaged brand, and genuinely interested in your client’s experience.

The most difficult aspect of this task is, of course, catching what people are saying about you. With so many social media platforms, pages, forums and threads, catching one bad review can seem like trying to find a needle in a haystack. Fortunately, there’s an app for that. Try using social listening apps like Mention, which automatically scan the internet and alert you to mentions of your name or brand.


Perhaps the most crucial step in developing social media skills is learning from your mistakes. Use tools like Google Analytics to monitor traffic and activity on your site and blogs. Pay attention to what’s working and what isn’t—in the case of the former, stick with and multiply those approaches; in the case of the latter, change it! Effective use of social media must be deliberate. Know your strategy, analyze your results, and continue to reshape your approach accordingly.

In the end, you can strategize all you want, but you will only truly begin to master social media from experience. Put your business out there and see what sticks. Your audience will be your ultimate gauge of success. Set up some accounts and take advantage of what social media has to offer.

March 1, 2018 / by / in ,
Common Marketing Mistakes

Mistakes are inevitable when it comes to marketing, with even major brands making headlines each year for catastrophic advertising blunders. Small businesses are particularly vulnerable to poor maneuvering however, with small budgets and a need to reach audiences quickly and efficiently. You will make mistakes in marketing your business, that’s an unfortunate fact of the learning curve. However, there are some common mistakes that nobody needs to make. Here’s a quick rundown of some of the most common marketing mistakes, so you’ll at least know what not to do.


It’s no secret that the internet is a major playing field for modern marketing, and probably the single biggest mistake that you could make when marketing your small business would be to neglect your online presence. Despite how obvious this all seems, nearly one-half of small businesses in the United States do not have a website. Without a website to serve as your online headquarters, it is almost pointless to put time and effort into social media and other forms of digital marketing, because there is no page to ultimately send your potential customers.

This is a critical mistake for which there is no real excuse. Creating a website has never been easier, with several services available which make designing your own site simple and affordable—you could have the whole thing up and running with a few hours of work and couple hundred dollars.


One of the first things you should establish before delving into marketing is a marketing strategy. Just because a billboard ad works once doesn’t mean it will keep working forever. Similarly, just because a banner ad got potential customers onto your website doesn’t mean that they have been encouraged enough to make a purchase. Focusing on individual tactics is important, but isolated tactics are not working at full efficiency unless they are part of an overarching strategy.

Set goals and determine how you can reach them in a certain time frame. Once you have determined this strategy, then it is time to turn your attention to individual tactics.


Marketing isn’t just about reaching your ideal customers, it’s about catering to the people who want to spend money on your product or service. Too often, business owners have their target audience in mind when marketing and developing their business, at the cost of ignoring the customers that they already have. If you really want to sell your fitness equipment to hip young people, but only hockey moms are buying it, maybe you should stop channeling all of your efforts toward attracting that target audience that just isn’t interested.

Marketing decisions are always tactical choices—you risk your money by marketing to a demographic that isn’t interested, or you can use those resources to connect with people who care. In this example, maybe you should stop focusing on Snapchat, and shift your time and resources to physical marketing or banner ads on junior hockey sites. A basic rule of thumb: focus on whatever shows the best returns.


Yes, you need to reach your audience quickly, but you also have expenses to think about. Unless you are blessed with a huge budget, it’s a good idea to save the cost of big-budget marketing tactics and dedicated professional marketing staff until you’ve developed an adequate stream of profits. Spending too much, too early on marketing depletes your resources which should instead be used for other things . . . like meeting demand. Keep the horse in front of the carriage; start small and grow your marketing efforts according to the rest of your business.

There are plenty of low budget marketing options out there, and you really only need to move onto bigger and more expensive strategies when you have exhausted these options. Interns, freelancers, social media, and a number of other options are available for effective, low-cost marketing—take advantage!


Consistency in marketing your brand is important. Logo, tone, aesthetic, and cadence are all opportunities to establish consistency, and you can see this practice at work in the marketing of virtually any major brand. However, this consistency should not end with marketing.

If your ads all follow a certain rhythm, but then bring customers to a website that seems like another world, you’re going to break the spell. Whatever your brand’s image, vibe, or promise, it should carry through from the first ad all the way until the delivery of the product. Consistency throughout marketing and sales suggests integrity, organization, and reliability—all qualities that you want your brand to exhibit.

This start-to-finish consistency requires collaboration between marketing and sales. Ensure that the departments are in open communication with one another, and are making the effort to ensure that they work together to give your brand a cohesive feel.


Observing the tactics of successful (and unsuccessful) competitors in your industry is an excellent way to figure out what works when it comes to marketing without spending a dime. This vicarious learning provides you with tough lessons that you don’t actually need to learn the hard way—let someone else do the work!

Similarly, tracking your own results is a fundamental component of learning—and if you don’t do it, you’re not going to learn. Without studying which strategies improve conversion, you are effectively wasting money. Use tools like Google Analytics to track traffic to your site and note conversion rates for different marketing strategies. Keeping track of what works and what doesn’t is the single best way to ensure that you’re getting the highest return on your investments. This is the single most important point on this list: if you are not tracking results, you’re not learning. It’s that simple.

Marketing is complex and requires practice to execute correctly. Each one of the mistakes listed above is surprisingly common, so by keeping them in mind, you are giving yourself a head start in the game. Keep a critical eye on your marketing strategy and maintain that lead!

February 22, 2018 / by / in ,