User Reviews Affect Offline Buying

We all recognize the power of review sites in diversifying and expanding the reach and influence of both our online and offline enterprises. More and more we see consumers merging their online and offline activities, and in addition we see them becoming more and more interdependent.

A study conducted by comScore with The Kelsey Group, a research and strategic analysis firm, focused on local media and advertising. The research examined the impact of consumer-generated reviews on the price consumers were willing to pay for a service delivered offline.

The study, based on a survey of more than 2,000 U.S. Internet users in October 2007, revealed that consumers were willing to pay at least 20 percent more for services receiving an “Excellent,” or 5-star rating, than for the same service receiving a “Good,” or 4-star, rating.

The study examined the offline sales impact of online reviews for restaurants, hotels, travel, legal, medical, automotive and home services. Nearly one out of every four Internet users (24 percent) reported using online reviews prior to paying for a service delivered offline. Of those who consulted an online review, 41 percent of restaurant reviewers subsequently visited a restaurant, while 40 percent of hotel reviewers subsequently stayed at a hotel.

More than three-quarters of review users in nearly every category reported that the review had a significant influence on their purchase, with hotels ranking the highest (87 percent). Ninety-seven percent of those surveyed who said they made a purchase based on an online review said they found the review to have been accurate. Review users also noted that reviews generated by fellow consumers had a greater influence than those generated by professionals.

comScore asked the study participants how much they would be willing to pay for a particular service based on the quality of the service. The results showed that consumers were willing to pay between 20 percent and 99 percent more for an Excellent (5 star) rating than for a Good (4 star rating), depending on the product category.

“These data show the importance of local service review sites in consumers’ purchasing process,” said Steve Marshall, research director for The Kelsey Group. “With such a large percentage of review users subsequently purchasing, it’s vital that local service providers have a positive presence on these review sites.”

“This study underscores the importance of providing not just good, but excellent service if a business hopes to generate positive consumer reviews which will result in greater sales,” said Brian Jurutka, senior director, comScore Marketing Solutions.

This data is of particular importance to those businesses utilizing review sites in their marketing mix to drive interest in their brick and mortar enterprises, those using their own review sites to channel potential customers to other websites and offline retailers, and also to those using review sites to direct customers to online retail hard goods sites.

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However you are bridging the online > offline phenomenon, include some review site marketing in your model - whether you are tapping into existing services or building and utilizing your own review sites, the power of the 5-star Testimonial has never been stronger...