From Reviews to Revenue: How Ratings and Reviews Influence Sales

download From Reviews to Revenue: How Ratings and Reviews Influence Sales

of 34

  • date post

    12-Jan-2017
  • Category

    Retail

  • view

    361
  • download

    0

Embed Size (px)

Transcript of From Reviews to Revenue: How Ratings and Reviews Influence Sales

  • PowerReviews, Inc. 1

    From Reviews to Revenue: How Ratings and Reviews Influence Sales

  • PowerReviews, Inc.

    Ask Questions #PowerReviews

    Post them in the questions panel on the right

    of your screen. We will answer at the end.

    You will receive a link to the recorded

    webinar.

    2

  • PowerReviews, Inc.

    Tom CollingerExecutive Director, Spiegel Digital & Database Research CenterSenior Director Medill Distance LearningNorthwestern Universityt-collinger@northwestern.edu http://spiegel.medill.northwestern.edu/

    Edward C MalthouseTheodore R and Annie Laurie Sills Professor of Integrated Marketing CommunicationsProfessor of Industrial Engineering and Management SciencesResearch Director, Spiegel Center on Digital and Database MarketingNorthwestern Universityecm@northwestern.edu

    Introductions

    mailto:t-collinger@northwestern.edumailto:t-collinger@northwestern.eduhttp://spiegel.medill.northwestern.edu/http://spiegel.medill.northwestern.edu/mailto:ecm@northwestern.edumailto:ecm@northwestern.edu

  • PowerReviews, Inc.

    Context for the Study

    Where Ratings Matter

    Mitigating Risk with Reviews

    Summary and Areas for Exploration

    4

    Agenda

  • PowerReviews, Inc. 5

    Context for the Study

  • PowerReviews, Inc.

    15 Of The Absolute worst Marketing Campaigns From 2014 *Spokal

    Ad Ages #1 pick in 21st Century Ad Campaigns

    Victorias Secret Perfect Body CampaignDove Campaign for Real Beauty

    6

    Context: What Really Works?

  • PowerReviews, Inc.

    12 Best Facebook Marketing Campaigns, Adweek 10 Worst Social Media Fails of 2014, ClickZ

    ALS Ice Bucket ChallengeEpicurious Post after Boston Marathon Bombing

    7

    More Context: What Really Works?

    Boston, our hearts are with you. Here's a bowl of breakfast energy

    we could all use to start today

  • PowerReviews, Inc. 8

    Context Summary: It Depends and

    Its Complicated

  • PowerReviews, Inc.

    Previous PowerReviews studies focused on higher priced categories (Electronics, Appliances)

    This study focused on lower priced categories (CPG)

    Answer the question: How Do Reviews Influence Purchase?

    9

    About the Study

  • PowerReviews, Inc. 10

    Where Ratings Matter

  • PowerReviews, Inc. 11

    Where Reviews Live in a Consumer Decision Journey

    1

    2

    3

    45

    Initial Consideration

    Set

    Trigger Post-purchase Experience

    Moment of Purchase

    Active Evaluation

    Reviews

    Loyal

    ty Loo

    p

  • PowerReviews, Inc.

    Product Price

    Number of Reviews

    Stars

    Advertising

    Word of Mouth

    Promotion

    Competition

    Customer Involvement

    12

    We Analyzed Some of the Variables that Influence Purchase

  • PowerReviews, Inc.

    OMITTEDUSED

    Controlled

    Influencer

    Word of Mouth

    Promotion

    Competition

    Customer Involvement

    Influencer

    Controlled

    13

    We Analyzed Four Purchase Variables

  • PowerReviews, Inc. 14

    4.2-4.5 is the ideal average star rating for purchase probability

  • PowerReviews, Inc.

    Average Star1 2 3 4 5

    4.5Most likely to purchase

    15

    Example: Light Bulbs

    Least likely to purchase

  • PowerReviews, Inc.

    4.2

    16

    Example: Hair Care

    Average Star1 2 3 4 5

    Most likely to purchase

    Least likely to purchase

  • PowerReviews, Inc.

    4.4

    17

    Example: Salon Hair Care

    Average Star1 2 3 4 5

    Most likely to purchase

    Least likely to purchase

  • PowerReviews, Inc.

    Consumers seek out negative reviews

    Negative reviews establish trust and authenticity

    Increase buyer confidence

    18

    Theres a Positive Impact of Negative Reviews

  • PowerReviews, Inc.

    Star Ratings impact expensive items more than cheaper items

    Specifically, expensive items within high consideration categories

    Categories studied include: Salon Hair Care, Weight Loss and Baby Food

    19

    Where Are Stars Most Impactful

  • PowerReviews, Inc.

    Cheap slope

    Expensive sl

    ope

    20

    Example: Salon Hair Care

    Average Star1 2 3 4 5

    Most likely to purchase

    Least likely to purchase

  • PowerReviews, Inc.

    Cheap slope

    Expensive s

    lope

    21

    Example: Weight Loss

    Average Star1 2 3 4 5

    Most likely to purchase

    Least likely to purchase

  • PowerReviews, Inc.

    Cheap slope

    22

    Example: Baby Food

    Average Star1 2 3 4 5

    Most likely to purchase

    Least likely to purchase

    Expensive slo

    pe

  • PowerReviews, Inc.

    Consumer feedback is more important with expensive items, relative to category

    High consideration items (Baby Food) need to be ensured they are safe, the best

    23

    Star Ratings Impact Expensive Items Within High Consideration Categories

  • PowerReviews, Inc.

    New brands and new products in existing categories have low initial likelihood of purchase

    Categories with low initial likelihood of purchase are most impacted by reviews

    Categories studied include: Salon Hair Care and Dishwashing Detergent

    24

    When Are Stars Most Impactful?

  • PowerReviews, Inc.

    Higher initial purchase likelihood Smaller Impact

    Lower initial purchase likelihood Greater Impact

    25

    Example: Dishwashing Detergents

    Average Star1 2 3 4 5

    Most likely to purchase

    Least likely to purchase

  • PowerReviews, Inc.

    Consider products that are new in a category or that are unfamiliar to customers (ex: niche products)

    Focus review capturing efforts on such products

    26

    Reviews Can Impact New Product Launches

  • PowerReviews, Inc. 27

    Mitigating Risk with Reviews

  • PowerReviews, Inc.

    Where Ratings Mattered Most (Item)

    High Consideration, Expensive Items

    Expense

    Safety

    When Ratings Mattered Most (Purchase)

    Low Initial Likelihood of Purchase

    Unknown product

    Unknown brand

    28

    Key Finding: Reviews Can Mitigate Risk

  • PowerReviews, Inc. 29

    Summary and Areas for Exploration

  • PowerReviews, Inc.

    5 star ratings are not the most influential Allow negative reviews on your site to build trust with shoppers

    Consider item category and purchase type Prioritize reviews for items in lower likelihood categories/products

    Unknown brands and products are heavily influenced by reviews Consider sampling for new brands or products

    30

    Key Findings With Action Items

  • PowerReviews, Inc.

    Questions?

  • PowerReviews, Inc.

    32

    Ask Questions #PowerReviews

    Post them in the questions panel on the right

    of your screen. We will answer at the end.

    You will receive a link to the recorded

    webinar.

  • PowerReviews, Inc. 33

    For a Full Copy of the Report

    powerreviews.com/NWU

  • PowerReviews, Inc.

    Thank you.

    www.powerreviews.comwww.powerreviews.com/blog