28 October 2008

Online reviews decide fate of companies

Everyone knows that the internet is a wonderful, beautiful thing, but now thanks to the folk at Rubicon Consulting, we now have further proof that it's a useful tool too - especially for shoppers.

Word of mouth aside, reviews on the internet are seen as most influential when deciding on a purchase. Online information is second only to user manuals as a resource for customers looking for answers - beating more traditional options, such as asking the manufacturer, speaking to a dealer or giving the purchase a big kick.

Although the research was carried out amongst Americans, the results are indicative of many of the current trends in online and social media globally.

Search engines Google and Yahoo came top as the most valued websites and were followed by social networking sites, general news sites and online banking. Wikipedia was ranked as the fourth most valuable site on the web.

The report goes on to say that many companies ignore online communities because only a small percentage of internet users are heavily active. However, what is disregarded is the huge number of people who read, and rely on, the reviews published by these people. If your product is receiving more positive than negative reviews that's great - but if it's the other way round you could be missing out on a lot of sales.

Of the people surveyed, one per cent were heavy internet users who posted content online regularly, minutes after events occurring. Nine per cent were common contributors, while the remaining 90 per cent rarely or never added reviews online but read the comments made by the first 10 per cent. This means that online comments tend to reflect the opinions of the extreme enthusiasts, so they tend to be either highly praising or severely damning.

Although consumers are essentially taking advice from complete strangers, participants in the research felt that these reviews could be trusted because they are written by normal people who have no motive for influencing the decisions of others.