Collaboration Cast

As the web becomes more social we are seeing an increasing number of companies adding ratings and comments to a piece of content or product. The question people ask me all the time is, why should I add ratings and comments to my website and what value will I receive?

The good thing is that a lot of research has been done on the value of ratings and comments. Bazaar Voice, a social software company, has specifically focused on ratings and comments for eRetails. From an inside source I hear they are doing very well with revenues of about $30 million. So there are companies out there seeing the value in ratings and commenting.

The following statistics show the value of ratings and commenting:

• The Number One Functionality Desired By Internet Users - Forrester Research conducted a study showing that user ratings and reviews was the number one feature requested by US internet users.

• Makes a Site More Credible - According to a global Nielsen survey of 26,486 Internet users in 47 markets, consumer recommendations are the most credible form of advertising among 78% of the study’s respondents. (Nielsen, “Word-of-Mouth the Most Powerful Selling Tool”)

• People Trust Peer’s Opinions More Than Advertising - Online social network users were three times more likely to trust their peers’ opinions over advertising when making purchase decisions. (“Social Networking Sites: Defining Advertising Opportunities in a Competitive Landscape,” JupiterResearch, March 2007)

• #1 Aid To Buying Decisions - A consumer survey by the JC Williams Group ranked consumer content as the #1 aid to a buying decision, cited by 91% of respondents. (JC Williams Group, 2006)

• Reviews Makes Your Website a Top Destination - When asked what sources of information they are “very likely” to consult before making a decision about their entertainment options, 62% named Web sites with user reviews as their top choice, even beating out a knowledgeable friend (59%). (Marketing Sherpa, July 2007)

• More Likely to Buy - Two thirds of UK social networkers (66%) are more likely to buy a product as a result of a recommendation, compared to 52 per cent of non-social networkers. (Royal Mail’s Home Shopping Tracker Study 2007

• Influences Purchase Decisions - More than eight in 10 (82%) of those who read reviews said that their purchasing decisions have been directly influenced by those reviews. (Deloitte & Touche)

• Pay More - Consumers were willing to pay between 20 to 99% more for a 5-star rated product than for a 4-star rated product, depending on the product category. (comScore/Kelsey, October 2007)

• Drives Higher Spending - Reviews usage drives higher spending: 27% of users report an increase of 5-10%; almost 7% report an increase of 20%+. (Avenue A/Razorfish “Digital Consumer Behavior Study,” October 2007)

For those companies who have adopted reviews and are posting fake reviews, I would recommend to stop doing. Number one it is not ethical. Second if you do not cover your tracks and consumers find out, your consumers will surely create a PR nightmare for you. Just look at what happened to Slide, a Facebook application company, who fabricated their own reviews. TechCrunch picked up the story, there were 92 comments about the story, and at least 7 other bloggers picked it up.

Besides just a PR nightmare, I believe it could be possible that fake reviews could also end up in a lawsuit. Just look at Sony, who promoted fake reviews about one of their films and got sued for $326,000 in 2002 and again in 2005 for $1.5 million.

In summary, reviews are very beneficial for companies and companies should stay honest in their review and posting practices, while allowing customers to speak openly about the company’s products and content. In the end of the day, if a company is listening and improving their products to meet customer needs, they will be successful.