The Effect of Online Reviews on Sales

Amazon has shown customer reviews and ratings for years. Many other retailers have followed suit. So, a vital question is: What is a good online rating score for a retailer or a specific product? The results of a recent study may surprise you, since a 5.0 out of 5.0 rating is NOT the one eliciting the most customer purchases.
As reported by Retail TouchPoints:
“While every retailer pushes for perfect ratings to illustrate the effectiveness of their products, these ideal ratings may not be optimal for sales. On a scale of one to five, the likelihood of purchase peaks for products with an overall average star rating between 4.2 and 4.5, according to research from Northwestern University.”
“Above 4.5, purchase likelihood drops as the rating approaches five stars. Five-star reviews actually are often considered ‘too good to be true’ by the consumer. As counter-intuitive as that logic may seem, negative reviews can have a positive impact because they help establish trust and authenticity with the consumer.”
To download the full Northwestern University/PowerReviews study on online ratings, click the image below. NOTE: A free signup is required.

 

 

This entry was posted in Online Retailing, Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 3: Targeting Customers and Gathering Information, Part 7: Communicating with the Customer and tagged , , , , , , , , , , . Bookmark the permalink.

One Response to The Effect of Online Reviews on Sales

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