Online Reviews: 4 Tips for Building Customer Trust

The Challenge: Do you have a strategy for encouraging reviews? Do you monitor reviews? Are you responding to reviews and taking action based on this powerful voice of customer guidance?

Today’s educated and digitally savvy consumers search out online reviews, even from people they do not know; 69% of local consumers trust online reviews as much as personal recommendations. Less than 10% trust what companies say about themselves, according to an Econsultancy report. Studies by Saurage Research show that 84% of US shoppers rely on reviews before making purchase decisions.

The findings below are based on extensive Voice of Customer (VoC) research conducted by our firm, ERDM regarding the rapidly evolving role of reviews in consumer’s decision making process:

•  A large number of reviews with both positive and negative sentiments are an advantage and create trust.

•  Apparel and cosmetics customers want to be able to sort reviews by multiple criteria to evaluate the relevance of the reviewer’s comments to their personal situation. Criteria include; part of the country, (some feel that people from other parts of the country don’t share their fashion preferences), age, skin type, and clothing size.

•  Pictures and profiles of the reviewers are also important. Per this quote from a recent VoC research effort, “I like to see who is writing the review. It makes a difference as to how much weight I assign it.”

Case Study Intuit Quickbooks:

Adding ratings and reviews greatly increased sales for Intuit Quickbooks ProAdvisors. They are accounting service providers who have completed a comprehensive QuickBooks curriculum and are listed on Intuit’s website, which is searchable by businesses looking for accounting services.

• QuickBooks ProAdvisors® with reviews get 5X more referrals than those with few or none.

• ProAdvisors with reviews get more clicks than higher-ranked ProAdvisors.

• The number of reviews can be more important than the rating.

4 Takeaways to Help You Leverage the Power of Online Reviews:

1. Ask your customers for reviews and do not fear negative reviews: The Quickbooks case study uncovered that for US clients, 80% of reviewers give a 4 or 5 (out of 5) star rating.  UK clients’ reviews are 88% positive. A few negative reviews lend credibility to the positive ones.

2. Quantity of the online reviews can outweigh the quality. In the Quickbooks example, ProAdvisors with ten reviews averaging four stars receive more clicks than those who have a five star average, but only two reviews. Therefore encouraging customers to share information with you is imperative.

3. Online reviews are also important for offline businesses, “Nearly 70% of US internet users sometimes compared prices or read reviews before visiting a store.” - eMarketer

4. The more detailed and personalized the reviewers are, the more successful the review will be in converting potential customers. Offer incentives for completely filling out profile details, preferences, and including a photo.

JC Penney: If you don’t listen to your customer...you lose

The Challenge: Few companies know as much as they should about their customers and their expectations for meaningful engagement.

Being arrogant in disregarding customer expectations is dangerous. This is a lesson JC Penney found out the hard way when sales dropped 25 percent in 2012.

This is reinforced by the Accenture Study on customer-centricity in which they noted, that for too many companies, providing a tailored experience is an elusive goal; “...failing to deliver a high-quality customer experience can result in a staggering erosion of a company’s customer base—a loss of as much as 50 percent over a five-year period.”

Some of JC Penney's missteps included:

•  Customers have come to expect promotions around holidays. But the company did away with these sale events. They are bringing back event promotions 26 times a year, often around holidays like Mother’s Day.

•  Customers associate a company with the merchandise or services they traditionally provide. When the selection changes, it causes confusion. JC Penney will be returning to basic clothing and favorite brands.

•  Knowing your customers means knowing demographic aspects meaningful to sales. The company switched its focus to a trendier, younger and generally thinner audience, alienating longtime Penney customers who could not find items to suit their size or style.

Penney has been hurrying to welcome back customers. A few weeks ago, it apologized to customers in an ad that said: “Come back to J. C. Penney. We heard you. Now, we’d love to see you.”It then ran a second ad thanking customers for returning. New marketing materials also specifically state, “you asked, we listened” as well as “you can have it all”.

5 Takeaways:

» If you think “the customer doesn’t really know”, stop! You disregard the wisdom and preferences of your customers at great peril! Your business starts and ends with the customer.

» Build your value promise around the wants of your customers. Then, put measures in place at every level of the organization to deliver on that promise.
Customers should have a consistent experience with every employee and every situation. And every employee should know what you have promised.

» When is the last time you really asked your customers what you could do better? Before you add, change, or “improve” anything, make sure it is something that will be wanted and embraced by the people who count; your customers.

» If you have not recalibrated your strategies within the past 12 months, you are likely out of date with the needs of today's rapidly changing and greatly empowered consumers.

» Constantly monitor customer service complaints and sales statistics to identify and quickly resolve “hot button” issues.