Online Reviews: Digital Era’s New Social Proof

Online Reviews: Digital Era’s New Social Proof

​Major brands have used the “crowd” as a marketing pull. In 1962, record label company RCA renamed Elvis Presley's ninth album “Elvis' Gold Records, Volume 2” to “50,000,000 Elvis Fans Can't Be Wrong”. In 1955, Ray Kroc opened the first McDonald's franchise with the sign “We have sold over 1 million”. 

Social Proof Concept

“The principle of social proof states that one important means that people use to decide what to believe or how to act in a situation is to look at what other people are believing or doing there,” said Robert Cialdini in his work “Influence: Science and Practice”.
 
There's a wealth of evidence that shows people mimicking others in an unconscious way. You may not notice, for instance, you’ve acquired the speech inflections or idiosyncratic verbal expressions of your friend. If you see a large number of people staring at the sky, you're likely to do the same. Or you may not notice crossing your arms while talking to a person who also crosses his or her arms while talking to you.
 
“Powerful imitative effects have been found among both children and adults and in such diverse activities as purchase decisions, charity donations, and phobia remission,” Cialdini said. Social proof, he said, is most persuasive in these two conditions:

​1. Uncertainty
When a person is undecided or when the circumstance is unclear, such person is likely to mimic the action of others and to assume that such action as appropriate. According to Cialdini, a crowd is unlikely to help a person – even if that person genuinely is in need of help – when they perceive that the need for emergency aid is unclear.
 
2. Similarity
A person is more likely to mimic the action of others with the same background. A 1968 study found that New York residents were more likely to return a lost wallet after learning that another New Yorker had previously tried to do so. The 1968 study also found that knowledge that another person – a foreigner – tried to return the wallet, had no effect on the New Yorkers’ decision.

Social Proof in the Digital Era

​In today’s digital era, many people rely on online reviews as their social proof. A 2015 BrightLocal study found that 92% of consumers read online reviews for local businesses.
 
Google reviews are examples of online reviews. “Reviews on Google provide valuable information about your business to both you and your customers. Business reviews appear next to your listing in Maps and Search, and can help your business stand out on Google,” the search engine giant said.
 
As the new social proof, online reviews work best under the following conditions:

1. Product Uncertainty
Online reviews are persuasive for online consumers as they are more likely to be uncertain about the product quality compared to offline consumers. According to the study “User reviews and uncertainty assessment: A two stage model of consumers' willingness-to-pay in online markets”, an offline customer, for instance, can assess and verify the product quality in the seller’s store or physical settings. An online customer, on the other hand, has limited information and must actively search online to check the product quality
 
Implication to Your Company:
If your company has a limited budget to market your product in physical settings or other online platforms, online reviews can boost your company’s online visibility and ease the uncertainty that clouds the minds of your would-be customers.
 
2. Seller Uncertainty
The “User reviews and uncertainty assessment” study added that the uncertainty faced by online customers isn’t limited to the product alone. “While purchase uncertainty in offline markets is primarily in product alone, purchase uncertainty in online markets is related to both products and sellers,” the study noted. “As such, consumers not only evaluate various products in a category to assess product uncertainty as they do in offline markets, but also evaluate different sellers to mitigate seller uncertainty which they do not in offline markets.”
 
Implication to Your Company:
If your company is new or not well-known due lack of marketing efforts and funds, online reviews are your organization’s chance of being known to the public.
 
3. Affinity to Online Reviewers
A study by Spiegel Digital and Database Research Center and PowerReviews (PDF) found that reviews from verified customers – those who purchased the product – are perceived as more credible and have a greater impact on sales.
 
The Spiegel Digital and PowerReviews study analyzed 65,000 reviews from verified buyers and 57,000 reviews from anonymous consumers for about 13,500 unique products from different categories, including health, beauty, home, garden and electronics.
 
The study found that purchase likelihood increases by 15% when consumers are exposed to online reviews written by verified buyers as opposed to anonymous reviewers. “This suggests that reviews written by those with direct experience using a product are considered more credible and trustworthy,” researchers from Spiegel Digital and PowerReviews said.
 
Implication to Your Company:
As online reviews from verified customers are perceived as more credible than anonymous reviewers, it makes sense to encourage your past customers to provide online reviews for your products or services offered by your organization.
 
4. High Number of Reviewers
The study “Online Customer Reviews of Hotels: As Participation Increases, Better Evaluation Is Obtained”, which analyzed online reviews of 16,680 hotels in 249 tourist areas; found that early reviews of a business tend to be slightly negative. As the number of reviews increases, the study found that positive reviews mitigate the effects of negative reviews, as positive comments are more common than negative reviews.
 
Implication to Your Company:
According to the “Online Customer Reviews of Hotels” study, “Whether or not hotels actively respond to negative reviews, one implication of this study is that hoteliers should try to increase the number of reviews they receive to balance the positive and negative representations of their property (in addition to investigating and correcting the causes of negative comments).”
 
It’s important, therefore, for your organization to provide your past customers easy access to customer review sites to mitigate negative reviews.

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