Who Cares About Online Consumer Reviews?
Online consumer reviews might not be as powerful as suggested, but it seems companies have gained more power than ever through reviews...3 Oct 2017 2824 Views
Written by Weronika Bojanowicz
I aim at shedding light to the fact that online consumer reviews are not as powerful as commonly suggested. Take that back, the power does not lie in the consumer’s review, but rather in the response provided by the firm. Holding the argument that online reviews facilitates and amplifies the power of the firm further. And the consumer thus becomes another tool for brand building.
The Powerless Consumer
Online reviews, also known as electronic word-of-mouth (eWOM), is a natural element of Web 2.0, where the creation and distribution of content is becoming just as simple as consuming it. Web 2.0 applications, from e-commerce platforms (eBay, Amazon, and TridAdvisor) to social media platforms (Facebook, Instagram, and Twitter) rely on, and thrive in user-generated content (UGC), such as online consumer reviews (Liu, Schuckert, & Law, 2015). Barwise and Meehan (2010) address the widely recognised change of how the rise of the social media with the Web 2.0 has shifted the power from the brand to the consumer. Firms can no longer leverage upon the information asymmetry that used to exist between consumers and companies (Erdem & Swait, 1998).
More prominently, the introduction of the active consumer poses a threat to the business. The ability to voice one’s opinion online comes with the possibility and availability of negative online consumer reviews (Pee, 2016). Compared to offline reviews, online reviews reach a wider audience and sustains for a longer period of time Dellarocas (2003), if not even permanently. Labrecque et al. (2013) holds a discussion on the consumer power that emerged with the introduction of Web 2.0, addressing the enhanced access to information and the opportunity for consumers to collaborate. Moreover, a recent research conducted by Dimensional Research (2013) showed that 86% of customers get influenced by negative reviews in their buying decisions. Still, the same research revealed that positive online reviews influences up to 90% of customers in their buying decision.
Both scholars and marketing practitioners have without a doubt acknowledged the importance of online consumer reviews. Leading to discussions among researchers on how to leverage upon the tools of Web 2.0 in order to create valuable cooperation with consumers (Barwise & Meehan, 2010; Nath, Singh, Iyer, & Ganesh, 2010). But also, firing off articles by magazines aimed towards business owners to help with acquiring online reviews, such as Forbes’s “6 Simple Ways to get Customers to Review Your Business Online” (Akalp, 2014), business.com’s “Is Your Company Encouraging Customers to Give Online Reviews?” (Froelings, 2016), or Time’s “The Weird Reasons Consumers Write Bad Online Reviews for Products They Never Bought” (Tuttle, 2013). Amongst others, they encourage businesses to create incentives for the customer to leave reviews, to make it easily accessible, and simply asking the consumer to leave a review (Akalp, 2014; Froelings, 2016). Or as in the case of the fake online consumer reviews, they had taken upon themselves to guide the business through reviewing products they felt were unworthy of the business (Tuttle, 2013).
Whether positive or negative, online reviews may have important implications on brand building, brand reputation, future profits, and consequently brand equity (Dellarocas, 2003). Ratings can be linked to key company metrics, such as box office revenue (Liu, 2006) and stock returns (Chen, Liu, and Zhang, 2012). So why does the heading speak of a powerless consumer? Let us look are some examples of online reviews.
Looking at this complaint, it is likely to discourage potential customers from choosing JetBlue airline for their next flight. However, JetBlue did a great job with answering the consumer and showing their sympathy, as shown in the figure below. Ultimately, they compensated with a credit for the non-working TV. Isn’t this the treatment that you would like to get yourself and that encourages you to proceed with choosing JetBlue airline for future endeavours?
Now look what can happen when a company successfully manages to reply to a complaint. In the example below, the home painting company WOW 1 DAY had reached out to the dissatisfied costumer in order to mutually find a solution to the problem. Although I did not manage to retrieve the original complaint, the outcome speaks for itself. The consumer left a new five-star review, and most importantly, expressed that they will continue to work with WOW 1 DAY in the future.
The firm has successfully managed to regain a lost consumer, that without Web 2.0 would not have been possible, seeing as the complaint might have never reached the firm. Moreover, a negative or positive online review of an experience is not as powerful as seeing a customer take the time to rewrite a review because of a pleasant and satisfactory interaction. In other words, the power lies in the hands of the company. They steer the conversation through thoughtful interaction.
The Powerful Company
Simply put, the customer’s perception of a response to an individual online customer review has a stronger impact on the customer than the review itself (Conlon & Murray, 1996). As Stauss puts it, “a company’s response has enormous impact on the customers’ future behaviour” (“2002, p. 173). If a complaint is handled properly, the customer gains complaint satisfaction. The end result is an encouraging and powerful outcome; complaint satisfaction leads to positive word of mouth, increased repurchase readiness, and most prominently positive changes in attitudes (Strauss, 2002). To change consumer attitudes is a well-known hard task to take upon. To the extent that it is often recommended to learn the attitudes of the consumers and target those with positive attitudes rather than trying to change the attitudes of those consumers holding negative ones (Armstrong, Kotler, Harker, & Brennan, 2012).
Moreover, as previously mentioned, much research has pointed to the shift of the power to the consumer. However, another profound shift has been made possible through Web 2.0, that has not been given the appropriate attention that it should. Companies have access to more data than ever through social media. Information that is rich, it is unmediated customer insights, and can be retrieved in an instance (Barwise & Meehan, 2010). Consumer’s lives and opinions are on a daily display through social media (Barwise & Meehan 2010), making them vulnerable. In other words, maybe it is not as much about the consumer being powerless, but the fact that the firm is more powerful than ever.
The hands-on possibilities of changing consumer attitudes provided by Web 2.0 is a game changer. This coupled with the fact that firms possess more information about their consumers than ever thanks to Web 2.0, makes a great recipe for power. Yet, Fournier and Avery went as far as stating that brands are “uninvited crashers of the Web 2.0 party” (2011, p. 193). Arguing that social media was not created for brands but consumers. And I agree, to some extent. Social media is for consumers to interact and create, but for companies to take advantage of. As Pee (2016) discuss, it is not about looking at the impact of the online reviews but how to handle it. Li, Huang, Tan, & Wei (2013) for example, address the fact that consumers facilitate information among each other, and that it is not necessarily a value-creation process. Hence, let the consumers talk, as long as you respond. In this case, it is not the online review itself that adds or subtracts value; but the review together with a response provided by the company.
A Strategic Power Play
While scholars are preoccupied with learning how to leverage Web 2.0 by creating a presence on social media. The efforts should be put on how to capitalise on the voice that has been given to the consumer, in this case the online consumer reviews. Firms have access to greater amounts of consumer information, and should thus focus on how to sought this out. This way becoming more powerful than ever, while the consumer is more exposed, and thus vulnerable (or powerless), than ever.
Without a doubt, many arguments could be raised to criticise this standpoint. After all, statistics has shown that online consumer reviews influence consumers on an unprecedented scale (Dimensional Research, 2013). Having that said, what the earlier mentioned arguments point at, is that there exists a misconception on the power play. Before Web 2.0, consumers had opportunities for harm as well. Whether through word-of-mouth, making a scene at a restaurant, or news media. Today, these opportunities are more accessible, reach a wider audience, sustain for a longer period, and ultimately engages consumers on a new level. However, handled correctly, these reviews can become tools for brands to further strengthen their identity, position, and image. Like in the example below.
Here we can see a relatable situation. Have you ever felt the need to make sure that an owner should know about your satisfaction with the server because they deserve the recognition? Or have you maybe worked as a server yourself and gotten many compliments from the customers while your boss does not hear them? Reading this review one can feel a satisfaction in the fact that Hard Rock Café recognised the server. It can thus be seen that they have successfully managed to create an image of a company that values their employees and their customer (through the act of responding). Creating favourable associations towards Hard Rock Café.
In other words, in the same way that Web 2.0 has empowered the consumer; online consumer reviews have amplified the power of the firm. To be able to act as the hero with the wide audience that is provided by Web 2.0, is a powerful instrument. Good actions, such as giving away vouchers to make up for any complaint, do not go unseen and thus also gives incentives for the firm to act upon complaints. So what I am arguing for, is that two-way communication in this sense is not concerned with creating a mutually beneficial relationship, or to start a conversation with the brand’s audience, but rather about building your brand. Making this a matter of relocation of the source of the power for the brand rather than the loss of it.
Evidently, many brands get lost and fail in successfully taking advantage of this power that has been given them. Hence, some final remarks on how to strategically make use of the power through online consumer reviews:
Do not forget to continuously encourage consumer online reviews.
The most obvious recommendation is to simply answer. It is the first step to successfully use the power for brand building purposes.
Take responsibility. Do not provide excuses or blame external factors as explanations to why there is a problem. Own up to your mistake.
Give feedback for positive reviews as well. Remember that they still have greater numbers of viewers than negative reviews on potential consumers. So make sure to amplify their influencing power.
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