Online reviews – second biggest influence on purchase decisions

We’ve written on this blog before about research and reports that show the influence that social media and online reviews can have on purchase decisions, including a post showing how 25m American adults make decisions based on social media. A report out last week supports this and shows the role of online reviews, in particular, to be greater than we might previously have thought.

The report, by Rubicon Consulting, shows that for American adults, online reviews are second only to word-of-mouth in terms of influence on purchase decisions. What is common about both of these, of course, is that they both rely on consumer-to-consumer recommendations. We’ve seen this before with research from Forrester, McKinsey and with our own experience at FreshNetworks of talking to clients. A consumer-to-consumer message is stronger than a brand-to-consumer one. And now it appears that getting this message through online reviews is second only to word-of-mouth.

The detail of the report shows some more exciting and interesting observations. Whilst the influence of online is large and growing, it is worth exploring the differences that emerge, especially those which show where we are influenced weakly by online information.

The areas where the web has greatest influence includes purchase of consumer electronics, vacation planning, choosing a movie to watch, buying a car, looking for a job or choosing a restaurant. In each of these, more than one in three consumers say they are heavily influenced by online information when making a purchase decision. The lowest areas are choosing a mechanic or solicitor and, interestingly given the strong use of social media by the Obama campaign, choosing who to vote for.

It may be that some decisions lend themselves more naturally to being influenced by online content, but I suspect it is just that the tools, sites and content do not yet exist to make influence meaningful in some areas. There are more places where you can share thoughts (and learn others’ thoughts) on consumer electronics and vacation ideas than there are for solicitors. Of course, things change rapidly – DeJuridica, a French site where you can review your solicitor, among other professions, is launching soon.

What we are seeing here is the democratisation of information online – more users reading more reviews from more people on more products.  It is only when a tool becomes used by a broad base of people that it truly becomes useful and can have an impact on the way we live. That’s what is happening now with social media and online communities. And why they matter quite so much.

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