Are User Reviews Helping or Hurting Consumers?

June 20, 2009 10:00 AM
by Liz Colville
Businesses are seeing their reputations change as more and more people take to the Web to share their opinions. But it can make decision making more confusing for customers.

A Wild West of Opinions

If a customer wants to let others know about a great restaurant or an unreliable watch repair service, they can log on to a variety of sites to spread the word. But because of the untamed, low-security nature of most signup processes online, the reviewer does not have to reveal their identity.

Of course, this means that a business owner or employee can also “log on anonymously and praise themselves or bash their competitors,” as South Florida Sun-Sentinel’s Diane C. Lade points out.

Sites like Epinions, Angie’s List, Amazon and Cruise Critic allow anyone to sound off on “everything from their local dry cleaners to their latest hotel stay,” Lade says. But it’s not always clear how such a site “collects its information and how it makes its money,” Angie’s List founder Angie Hicks told Lade.
Review sites are proving to be very influential in how consumers spend their money, especially when it comes to how much they’re willing to spend. According to a 2007 report by comScore and The Kelsey Group, “consumers were willing to pay at least 20 percent more for services receiving an “Excellent,” or 5-star, rating than for the same service receiving a “Good,” or 4-star, rating.”

But recent controversies surrounding the local review site, the lawyer profile and review site, and the drug forum CafePharma highlight the challenges that businesses and consumers face when they become involved with such sites.

Background: Online review sites face criticism and legal battles, a site where consumers review restaurants, bars and other venues in 18 U.S. cities, came under the spotlight in 2008 when it removed some users’ reviews from the site alleging that “business owners had swapped positive reviews with other business owners,” the San Francisco Chronicle reported.

Yelp “regularly deletes reviews it believes are phony,” according to the Chronicle. The offending users were outraged about the decision, but Yelp CEO Jeremy Stoppelman maintained that it had to be done. ”Trust is our oxygen,” he said. “If you're the consumer and about to spend $90 on a massage, are those the reviews you want to read?"

The event pointed out the inherently imperfect system that sites like Yelp use to monitor spam. Sometimes “legitimate posts are also deleted,” the Chronicle reported. In one case, a group of lawyers “were dismayed to find that Yelp flagged most of the positive reviews of their law firm as untrustworthy, because they were written by first-time users. As a result, the Web site blocked 11 positive reviews, leaving a couple of unflattering comments.”

Earlier in 2009, online comments from the site CafePharma, a forum for discussion of drugs, were used in a lawsuit against Schering-Plough Corp. and Merck & Co. The suit asserted that the companies did not disclose test results showing that their drug Vytorin does not unclog arteries any better than an older, less expensive drug.

The D.C. Bar Association threatened to sue the Web site, which reviews lawyers, in March 2009. The bar association says the site is violating copyright and privacy laws. “There's no reason why lawyer-licensing records should be treated any differently than records for any other profession,” Joshua King, the site’s general counsel, told The Washington Post in March. “The bar doesn't like the fact that the information is out of its control.”

Opinion & Analysis: How to use online reviews effectively

Consumer Reports, in defending its decision to not take user reviews into account when it rates products, posted on its blog that user reviews are “useful” but “[e]ven the most thorough reviewer may lack the context that comes from extensive side-by-side tests” of products.

It can be helpful to have statistics about user reviews when deciding how to use them. As the blog Marketing Pilgrim explained in 2007, citing data from Jupiter Research, “Customers are about twice as likely to write user reviews about good shopping experiences than bad ones. Likewise they are twice as likely to write user reviews about products they like than products they do not like.”

Angie Hicks of Angie’s List encourages trustworthiness by charging an annual subscription fee for her review site, the Sun-Sentinel reports. “Balance those reviews with information from the outside world and never neglect your gut instinct," Hicks said.

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Reference: Consumer reviews impact buying behaviors


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