How Customer Reviews Boost E-commerce and Loyalty

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By: Wise Marketer Staff |

Posted on October 25, 2006

What other people think about computers and electronic goods is increasingly important - particularly when shopping online. The majority of the 2,000 CompUSA shoppers surveyed by iPerceptions said they consider customer ratings and reviews 'important' when they are researching or planning a purchase.

According to Al Hurlebaus, senior director of e-commerce at CompUSA, customer ratings and reviews have become critical to customers who want to choose the right product, as well as for attracting new customers.

Depending on customer reviews
A recent study by JupiterKagan found that the number of online shoppers who cite customer ratings and reviews as the most useful shopping site feature has more than doubled since 2005. That study also found that online shoppers who find user-generated product ratings and reviews useful tend to be heavier-than-average online spenders.

Key findings
But apart from measuring the overall importance of customer ratings and reviews for consumer electronics purchases, the CompUSA study provided new insights into the conditions that influence the importance and relevance of other consumers' opinions. For example:

  • Surveyed shoppers indicated that both positive and negative reviews helped them make the right purchase decision for their needs. Some shoppers even stated that they consult ratings and reviews before making every online purchase.
  • Repeat customers considered ratings and reviews more important (86%) than one-time buyers (82%), confirming the value of ratings and reviews in fostering customer loyalty and repeat purchase behaviour.
  • Highly qualified shoppers (those who indicated that they were "very likely" or "somewhat likely" to make a purchase) considered ratings and reviews more important (85%) to their decision process than those who were unlikely to purchase (70%).
  • Younger shoppers considered ratings and reviews more important than older shoppers. Importance was highest (88%) for the up-to-18 segment, and lowest (70%) for the 45+ segment.

"Our findings for CompUSA represent a significant advancement in measuring the impact of customer word of mouth on both online conversion and branding," said Jerry Tarasofsky, CEO for iPerceptions. "With ratings and reviews, CompUSA has managed to transform thousands of customer voices into a very tangible and strategic marketing advantage. Harnessing customer word of mouth is critically important for companies that want to build their businesses in the always-on and always-connected online environment."

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