• Ivaylo Yorgov

CX Science: the cost of a single negative review


What:

  • Customers are 50% less likely to buy a product if they see a negative review about it (i.e. the review is available on the first page)

  • On the other hand, if a purchase occurs it will be a 16% more expensive one


Now what:

  • Customer behaviour is clearly very malleable and easily swayed by a single review. No company can let its guard down in this respect - all reviews matter, as long as they are easily available and accessible to customers.



By now it is clear that the trend of customers sharing their opinions about products and services online is here to stay. We also have a general understanding of the fact that customer reviews have a major impact on other customers' purchases.


Yet, as is typical when we are in the middle of major trends, we often sense things but don't really have definitive answers. There is a myriad of questions we can ask ourselves about user-generated content, related to its specific power, whether it works the same way for all products and services, who is more likely to post and read online reviews, and many others.


Luckily, science is catching up with these topics. In what is a very important study for our understanding of online reviews, Marton Varga and Paulo Albuquerque from INSEAD investigated an important question: how is behavior affected by customers reading a single negative review on a retailer website. Read on.



An interesting change in perspective: from reviews submitted to reviews seen


Varga and Albuquerque approached this from an interesting angle. Instead of asking how much the submission of a negative review affects sales, they investigated it from the reader's perspective - how much seeing a negative review affects purchase behavior.


This is a critical distinction as in most websites reviews are sorted chronologically with the newest ones appearing on top; and typically only a limited amount of reviews are visible without the customers opening a second page of reviews. So some customers just scroll down to the review section and see a negative review, while others see a negative one only when they dig deeper into the reviews section.



What's the impact?


So how is consumer's behavior different if it's easy for them to see a negative review vs if the same negative review is available but only on a second review page?


  1. Number one, and most important: seeing a single negative review leads to a 51% lower chance of purchase. You are reading this correctly: customers who see a negative review are 50% less likely to buy the product compared to the ones who have not seen it.

  2. Interestingly, customers who see a negative review pay 16% more for a product in the same category (if a purchase occurs).


In short: a customer who sees a negative review is 50% less likely to buy the product but is likely to pay more for a product in the category most probably in search of a viable alternative.


Customer behaviour is clearly very malleable and easily swayed by a single review. No company can let its guard down in this respect - all reviews matter, as long as they are easily available and accessible to customers.


My best wishes for a great day ahead!


CX Inspirations - card 8
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