How online reviews make or break business

The Power of Online Reviews: How They Influence Consumer Decisions

Many pieces of research show that consumers are relying on online reviews much more than before. But what exactly makes so many consumers looking for reviews of businesses before making a decision? There are perceived risks in the online environment.

"The reviews of a product or service become one of the ways that help consumers getting more information and details, and also, feel able to trust a business."

Compared with the offline deciding process, people who buy things online usually can’t check the quality of products or services in person. That is to say, there’s a high chance that online buyers have to face more uncertainties about online transactions. Consequently, the reviews of a product or service become one of the ways that help consumers getting more information and details, and also, feel able to trust a business.

It might be a bit hard to know how influential online reviews are with the only description, so here we find some general statistics on online reviews, for numbers explain the fact frankly:

• 93% of people say online reviews impact their buying decisions.
• 53% of consumers view product ratings and reviews as the most important factor in the online shopping experience.
• 84% of consumers trust online reviews as much as personal recommendations.
• Consumers trust customer reviews 12 times more than manufacturers’ reviews, according to consumer trust statistics.
• People read an average of 10 online reviews before trusting a business.
• 72% of customers say they won’t take action before reading reviews.

"Online reviews have a greater impact on an industry like hospitality."

In this digital era, more and more consumers are buying products online. Online reviews, without a doubt, are a great factor affecting people’s decision-making. Online reviews have a greater impact on industries like hospitality. With the intangible characteristic of the hospitality industry, which the services couldn’t be able to examine physically, people would try to gather much information before finishing the purchase. Hence, online reviews are one of the sources that customers can reach when making a buying decision.

"To be trusted by customers, increasing reviews is the best way."

Positive reviews definitely have a good influence on customers’ purchasing intentions. Studies show that to reduce perceived risks, buyers are willing to pay higher price premiums for identical products when a business has more and higher rates. They also say that the one with positive reviews and rates earns an 8% premium than the one with less or lower reviews. In contrast to positive online reviews, negative ones could more or less drive customers away. To a certain extent, customers will hesitate to purchase from a business that has negative reviews.

To sum up, building trust in customers is absolutely necessary. If a business wants to be trusted by customers, increasing reviews is the best way to achieve that. Reviews and feedback help customers to inform themselves about others’ experiences and distinguish between trustworthy and non-trustworthy businesses.