Reviewing online reviews

For well over a decade online reviews have been a topic of contention in businesses across industries. Yet, far from fading away, the desire to get to an ideal where only genuine customer reactions populate forums is being taken up with renewed vigor both by consumer advocates and government agencies with even many businesses ending up as forceful advoates.

Colloquy a magazine put out by an organization at the forefront of issues pertaining to customer loyalty notes in its latest issue that a mere 13 percent of customers trust online reviews. And yet, paradoxically, "more than three quarters of Americans read reviews before making purchase decisions". The findings were the result of a recent survey by online market research agency YouGov. The survey also found that consumers "use reviews primarily to ensure good quality"; 3/4ths of respondents said they "try to read equal numbers positive and negative opinions"; more Americans write positive than negative reviews and do so with altruistic reasons "to help others make better purchasing decisions. Only a small handful (12%) write reviews to "expose poor brands".

A Harvard Business Review earlier this year on online reviews elaborates on what it terms as "the influence mix" for marketers. Noting that buyers today have options beyond what is put out by marketers they are able to quickly drill down to "what’s known as absolute value—a rich, specific sense of what it’s like to own or use the goods they’re considering". HBR breaks out the influence mix as being comprised of consumers' "prior preferences"  (P), information from marketers (M), and input from other people and services (O) and suggest that it is a zero-sum game with products and services increasingly more dependant on O than the other two and lying at various points on the "O" continuum. O, of course, is increasingly driven by what is available online.

HBR's research suggests that marketers need to focus more on consumers' dependence on the O factor as prior experiences diminish in terms of influence on purchasing power. That is true for a number of reasons including the fact that even if a consumer had a prior experience in an airline or hotel it likely is not recent and other more recent reviews are likely to be meaningful pointers for the purchase decision.

While the foregoing comports with the direction marketers are taking it does not address reviews that are not on an open platform like tripadvisor or yelp or even Amazon.  Mis-labeled disruptor Airbnb had a review system that allowed both the "host" and the guest review each other often resulting in more positive reviews than not as neither wanted to be tarred with a bad review. The (largely illegal) hotel company has recently revamped its review system and now requires both parties (host and guest) to submit their reviews before it is published. Hopefully that will lead to more honest reviews that show up the company, warts and all.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.