Customer Reviews Drive Online Satisfaction, Recommendation and Loyalty

Online retailers are always on the lookout for ways to improve the online shopping experience and stay ahead of the competition. Adding consumer product reviews is one such way.

As part of the analysis of the Spring 2007 edition of the Top 100 Online Retail Satisfaction Index, we delved into the data specific to consumer product reviews to answer these questions:

- How do customer reviews contribute to satisfaction with the website experience?

- Do customer reviews drive purchase?

- Are there any differences in the effectiveness of customer reviews by product category?

The Top 100 Online Retail Satisfaction Index is produced twice per year (spring and holiday) by ForeSee Results in partnership with FGI Research, and uses the methodology of the University of Michigan's American Customer Satisfaction Index (ACSI). The research is conducted with website browsers, defined as shoppers who visited a website but didn't necessarily purchase (although some did).

Customer Reviews Boost Online Satisfaction, Loyalty and Acquisition

Twenty-five percent of online shoppers in our survey recalled seeing consumer product reviews, a significant percentage of the total respondent base. Seventeen percent said reviews weren't present on the site they visited. A significant group of online shoppers, 57%, didn't recall whether or not they'd seen reviews. These statistics show that retailers that do offer reviews have a huge opportunity to position reviews more prominently and encourage consumers to both read and contribute to them. After all, as shown in the following chart, satisfaction and future behaviors tied to loyalty are significantly higher for people who recalled seeing customer reviews than for people who didn't.

- Customer reviews significantly improve the online shopping experience:

Satisfaction is 11% higher for people who said they had seen customer reviews on the site than for those who said that reviews weren't on the site they visited.

- Customer reviews increase conversion and loyalty: Shoppers on sites with reviews are 10% more likely to purchase from the retailer's website than those on sites without reviews. This group is 7% more likely to purchase from the retailer for their next purchase of similar merchandise, which is a strong loyalty metric.

- Customer reviews support acquisition: Customer reviews are a form of recommendation (whether they're positive or negative) and recommendation is a powerful influence in online retailing. Online shoppers that remembered seeing customer reviews are 13% more likely to recommend the site than are shoppers who didn't see reviews.


Customer Reviews are a Significant Factor in the Purchase Decision

While consumer product reviews provide value to shoppers, do they benefit retailers? Yes. According to our research, reviews have a significant impact on sales.

Thirty-nine percent of respondents who recalled seeing customer reviews went on to buy a product during their visit to the site.. This number is 26% higher than the percentage of people who bought from sites they said didn't have reviews. While the presence of customer reviews was probably not the sole reason that people bought, reviews obviously influence sales.

While many factors influence the purchase decision, customer reviews can make a big difference. Of people who bought from a site with reviews, 44% cited customer reviews as one of the primary reasons they bought from the retailer ? either online or offline. Only 17% of buyers from sites with customer reviews said they had little or no impact on their purchase decision.

Further proof of the power of customer reviews comes from looking at how the lack of reviews affects purchase. Of shoppers on sites without reviews, 10% said that the absence of reviews was one of the primary reasons they decided not to buy from the retailer.

Retailers are always on the look-out for ways to maximize the role of the web in multi-channel sales, and customer reviews appear to be one such tool. Our data shows that online customer reviews have an impact that goes beyond the virtual world and extends in to the store, catalog and call center.

The Effect of Customer Reviews by Product Category

Our research also looked at whether there are differences in satisfaction and purchase intent tied to customer reviews across the leading product categories measured in the Top 100 Online Retail Satisfaction Index.