New Research: Consumer Reviews are Key to Measure Quality
May 22, 2019
New research by Eller Assistant Professor of Marketing Anastasiya Pocheptsova Ghosh shows that the quantity of product reviews is often more important than higher product ratings
Amazon has changed the way we shop. Since the e-commerce website became a household name more than a decade ago, we are no longer forced to wander the aisles of department store after department store, searching for the perfect product. Shopping with confidence has never been easier, thanks to detailed customer product reviews and helpful ratings that have granted more power to the consumer than ever before.
It’s a transition that has captivated Anastasiya Pocheptsova Ghosh, assistant professor of marketing at the University of Arizona's Eller College of Management. This fascination nudged Pocheptsova Ghosh and her team deep into the world of consumer education and the value of features like public customer reviews and ratings.
In fact, Pocheptsova Ghosh and her fellow researchers recently published a new study in the Journal of Marketing that uncovered a fascinating discovery: Contrary to what you’d expect, higher product ratings don’t always translate into better sales. Instead, the quantity of product reviews—regardless of whether those reviews are positive or negative—is often much more important in the consumer’s decision process. Simply put: Lower-quality products can outsell higher-quality alternatives as long as they collect more reviews.
The Proof is in the Analysis
Ask your average consumer if they think it’s true, they’ll likely deny it. In Pocheptsova Ghosh’s preliminary research, 60 percent of consumers said the average product rating is what they focus on the most when they’re making a purchase decision. Conversely, only 46 percent claimed they ever pay attention to the number of reviews a product has. However, as so often happens, the research team discovered consumers don’t know themselves as well as they think.
To conduct her research, Pocheptsova Ghosh conducted seven studies, employing tactics like traditional lab research, eye-tracking experiments and simulations. Together, the researchers analyzed sales data on 2.5 million Amazon products across 24 different product categories. No matter how they broke it down, the number of product reviews held more significance in the sales decision than the product ratings.
It was the trend’s prevalence that most shocked Pocheptsova Ghosh. “The effect was drawn across all the product categories we tried and the different number of variations we played around with.” Furthermore, the content of the reviews appeared to be less important, as consumers were more focused on the overall number of reviews.
There were a few small caveats. Products saw a diminishing return on the number of reviews once they reached 200. In addition, consumers will choose the higher-rated product when the difference in product review count is negligible. Finally, the team determined consumers will actually defer purchase when there aren’t enough reviews and ratings for them to buy confidently.
Important Implications for Marketers
The research marks a paradigm shift for marketers. Product quality and features are no longer the most important factors when selling online, especially in online marketplaces like Amazon. Instead, the power has shifted to consumer reviews. Therefore, marketers must focus on prompting consumers to review products early in that product’s life cycle.
“At the beginning, when you’re first launching a product, absolute volume matters more than what people are writing,” says Pocheptsova Ghosh. “so you really should invest in encouraging your consumer to leave reviews, regardless of whether you believe they’re going to leave highly positive ones.” According to Pocheptsova Ghosh, the best method of acquiring reviews at scale is to offer free products in exchange for write-ups as soon as the product is released. While this may require a significant upfront cost, most marketers can cap the free offerings at 200 units, as the research suggests marketers will see diminishing returns beyond 200 reviews. Simplifying the process further is the fact that these reviewers can be any consumer; there’s no need for industry influencers to get involved, as most of the product reviews are anonymous.
Other reliable sourcing methods include incentivizing the review process through follow-up emails by offering discounts or rebates. What’s most important, however, is ensuring new reviews are generated early in the product lifecycle, or else the product could be beaten out or replaced by competitor products.
Interestingly, the research also places a higher value on a company’s older products with a greater number of reviews. Though your legacy products may lack the attractive features of your latest releases, they’ll likely sell better if they’ve been reviewed more. With that in mind, marketers should promote older products until new ones reach the 200-review threshold or collect more reviews than older products.
The Value of an Eller MBA
As a research institution, the Eller College of Management offers a rich classroom environment. That’s because professors like Pocheptsova Ghosh must keep up with the latest developments, statistics and trends in their respective fields in order to conduct meaningful research. This continuous education quickly finds its way into the classroom—sometimes even within 24 hours. As a result, Eller MBA candidates are also up to date on the latest developments, molding them into prime job candidates upon graduation.
Anastasiya Pocheptsova Ghosh joined the Eller College of Management in 2017. Before coming to Eller, she worked as an assistant professor of marketing at the University of Maryland and the University of South Carolina. Her areas of expertise include consumer self-control, financial decision making, online reviews and affect in judgements.