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How User Generated Reviews Affect Conversion Rates

《How User Generated Reviews Affect Conversion Rates》

Almost all business owners hate Yelp, but they understand its power.

User generated reviews in general are tremendously influential in persuading people to buy.

One” study found> that 88% of consumers trust online reviews as much as personal recommendations and 72% of consumers say positive reviews make them trust businesses more. Millennials, in particular, trust” user-generated content more than other media.>

Problem is, customers are more likely to share bad experiences than good ones. Business owners are well acquainted with what I call the “vocal” minority>,” those loud and influential voices that represent the extremes of your brand experience (a study found over 75% of customers almost” never write reviews>).

It’s important, then, to get the right kind of reviews and really understand how they can affect your sales and reputation.

How Do People Consume Product Reviews?

Reviews are a form of social” proof>.

Both the quantity and quality matter. When you’re looking at buying a book on Amazon, you want to know how many people bought the book and also how many thought the book was excellent (as well as why those who rated it poorly did so). This information removes a little bit of the uncertainty” of online shopping>.

《How User Generated Reviews Affect Conversion Rates》

Reviews, as a Harvard” business school article> put it, “fill in the gaps by providing a tremendous amount of information on which to base decisions.”

There are primarily two ways customer reviews are executed online:

  • Internal word of mouth (WOM): Reviews located on the retailer’s website.
  • External WOM: Reviews located on a third party website (think Yelp reviews).

Amazon is an example of the first category. The reviews are right there on the same page you can purchase the product. Yelp is an example of the second. If I’m looking for tacos in Austin, I can be pretty sure Tacodeli is going to serve me a good one:

《How User Generated Reviews Affect Conversion Rates》

Both types of user generated reviews are important. While on-page reviews have the benefit of not having to click to another tab to purchase, one” study from nielsen> found that 82% of Yelp users visit the site when preparing to spend money on a product or service.

The quality, of course, matters too. A Harvard” business school study found> that each ratings star added on a Yelp review translated to anywhere from a 5 percent to 9 percent effect on revenues – quite a substantial amount (note: this study centered only on restaurants).

While it’s easy to lambast sites like Yelp for their ability to (seemingly) only attract the most extreme voices, you have to admit it’s nice to see a large amount of (quality) reviews when picking a place to stay on Airbnb. Without a good amount of authentic reviews, there’s an imbalance of information and the consumer’s experience is a bit more opaque.

《How User Generated Reviews Affect Conversion Rates》

There’s a certain credibility to a large number of product reviews from your peers. It takes away some of the doubt and hesitation you’d normally experience in purchasing a product or service – especially one that varies in value like apartments or food.

Both On-Site and Off-Site Reviews Matter

Because of the prevalence of user review websites, you may think it’s unnecessary to implement reviews on your own site. However, there is a lot of research to support the power of on-site reviews, too:

But of course, off-site (third-party) reviews matter, too. At CXL Institute we recently published an Academic” insight> that summed up third-party review sites and their effects on sales as such:

  • Third-party websites influence customer reviews & word-of-mouth, which in turn influences sales on retail websites.
  • Third-party user reviews strengthen the impact of sales on retailer-hosted reviews.

On-site and off-site user generated reviews both matter, and they both influence each other when it comes to conversions.

Third party reviews are, by and large, a good thing for consumers as well as for your business. At least in theory, it promotes meritocracy. If your service is good, you get good reviews. If it’s bad, you get bad reviews. Customers are granted greater transparency, and good businesses get more trust (and therefore more business).

On-site reviews are awesome, too – both for the company and the shopper. Who doesn’t love seeing that their Uber driver is rated a 4.9/5? Similarly, I’m sure Uber drivers that pick me up are happy to note I’ve got a shining 4.93 passenger rating:

《How User Generated Reviews Affect Conversion Rates》

Reviews bring about a sort of crowdsourced meritocracy, especially when the reviews reach higher quantities. The ebbs and flows even out, and you get a pretty good average to base your opinion off of.

Oh, and one more thing, fellow growth marketers: user” generated reviews help your seo>.

What Makes a Good User Generated Review?

A good review will bring clarity to your offer, authenticity to your brand, and trust to your product. What’s that look like in practice, though?

We published another Academic” insight that answered>. Here’s what a good review profile usually looks like:

  • A balance of positive and negative comments
  • Actual descriptions of product usage
  • Comparing a product to competing brands
  • Shoppers prefer positive reviews over negative reviews (of course).
  • Conflicting reviews deter shoppers from their ultimate goal of making a purchase decision. In other words, if a consumer reads conflicting reviews about a product they’re considering buying (some love it, some hate it), it’s likely that they’ll just move on to a different product instead of trying to uncover the truth in the conflicting reviews.

However, that last bullet point doesn’t lend credence to you deleting negative reviews. Actually, they can” help breed authenticity and trust on that in a bit>

Quantity Counts, Too

In fact, Reevo” found> that the quantity of reviews alone correlates strongly with conversion rates:

《How User Generated Reviews Affect Conversion Rates》
Image” source>

So, how do you maximize the effectiveness of your reviews? It’s more of an art than a science usually. Of course, it has to do with the quality and quantity of reviews. But it largely has to do with how you display the reviews, as well.

How To Display Reviews

The most common way to display reviews is chronologically. This has some benefits (mainly SEO), but also suffers drawback (it’s up to chance which customer review a user sees first). Most eCommerce sites still order reviews by ‘most recent’:

《How User Generated Reviews Affect Conversion Rates》

This screenshot is from Guitar Center. While they list by date, they also provide a ‘review snapshot’ with the most helpful (ranked by user ratings) positive and negative review:

《How User Generated Reviews Affect Conversion Rates》

Pratik” dholakiya wrote on the unbounce blog that> we should give more thought to how we display reviews, instead of just arbitrarily placing them in the order of ‘most recent.’ Here’s how he put it:

《How User Generated Reviews Affect Conversion Rates》Pratik Dholakiya:

“Don’t sort by most positive rating. First off, remember that the star rating itself doesn’t actually influence sales; only the content of the review matters. Second, remember that a wider range of star values actually increases conversions, despite the fact that this means more negative reviews are visible.

Instead, you should consider testing these and other alternatives:

  • Allow users to rate each review, and then sort them by most helpful. The study found that the most helpful reviews on Amazon were also the most likely to use the appropriate linguistic style.
  • Show users a representative sample of the variability in star ratings. In other words, if 50 percent of the reviews have 5 stars, show them a list of 10 reviews, 5 of them with 5 star ratings.
  • Experiment with showing the most positive reviews from each star rating. In other words, show the 1, 2, and 3 star ratin

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