We have seen many changes in consumer behaviour in the last decade. These changes has been brought by many factors, with online commerce and customer reviews at the top of the list.
In the past, ‘word of mouth’ was a powerful tool to build trust among consumers, as personal recommendations played a huge part in helping people choose a business or product. Online reviews now seem to have taken over.
According to BrightLocal’s 2017 Local Consumer Review Survey, 97% of consumers are now reading online reviews for local businesses while 85% trust online reviews as much as personal recommendations from their family and friends.
This means that more people are checking online reviews than ever before and prefer businesses that regularly receive high-rated feedback.
In 2017, 73% of consumers have said that positive customer reviews make them trust a company more, while 50% admit that negative reviews make them question the quality of a business, meaning positive reviews clearly have a larger impact on customers’ perception than negative ones.
But exactly how much do reviews matter to us as consumers? And what matters the most to us when looking for reviews?
Because trust is an important value for us at Creditplus, we have decided to look at how consumers are using reviews and how important they are in building consumer trust.
According to BrightLocal’s research, 85% of consumers now trust online reviews as much as a recommendation from their friends and family, but reading one review is not enough for most people to trust a business.
54% of consumers consider the average star rating to be the most important factor when deciding if a company is trustworthy, with 87% of consumers saying that a business needs a rating between 3 and 5 stars before they decide to use their products or services.
48% of consumers need at least a four out of five stars rating before they choose to use a business. The number of reviews was the second most important deciding factor in 2017, with 68% of consumers reading four or more reviews before deciding to trust a business.
The study also suggests that feeling like a company is listening to their customers is becoming increasingly important to us as consumers, with the importance of businesses responding to reviews rising to 30% - up 10% from 2016.
People not only recognise the importance of reviews in helping them decide whether to trust a business, they also seem to be increasingly willing to share their own experience with other consumers.
63% of respondents have left positive reviews for local businesses, while 32% have left reviews for negative experiences – suggesting, once again, that, despite common belief, a positive experience seems to be more compelling than a negative one, both when reading and leaving customer feedback.
Fortunately, most businesses seem to be paying attention, as 74% of consumers say they have now been asked for their feedback on a company.
In this post-truth era, where fake news seem to be a growing trend, people are becoming wary of the veracity of online content in general – and reviews are no exception.
25% of consumers say that they must believe the reviews are authentic before they trust them as much as a personal recommendation. A glaring 79% of consumers believe they have read at least one fake review in the last year.
It is no surprise that 68% of consumers trust reviews more when they see both good and bad scores, while 30% suspect censorship or fake reviews when they don’t see any negative opinions on a company’s page.
Troubling enough, 25% of consumers believe they have read a lot of fake reviews in the last year, with just 16% of people claiming to be able to spot when a review is fake.
We can now find online reviews for all sorts of businesses and products and the financial industry is no exception.
In fact, according to a study conducted by independent review platform, Feefo, 85% of consumers under the age of 35 say that the most important factor influencing their choice of financial provider is positive reviews, placing them above personal recommendations.
77% of young consumers are now researching online to choose their financial provider, which comes to confirm that the shift towards digital goes well beyond online shopping.
In fact, technology plays a significant part in customer loyalty among young consumers, with 37% admitting they’re more likely to stay with their financial institution if it shows a commitment to improving their services through the latest technology.
In 2017, simply having an online presence in no longer enough - today’s consumers also care about how innovative their financial providers are.
Young consumers also seem to be increasingly interested in non-traditional financial providers, with 51% admitting to have chosen a financial product from someone other than their bank, while 6 out of 10 see themselves using less traditional financial services - like online brokers and lenders - more frequently in the future.
The ‘human side’ of a business is also becoming increasingly important to young consumers when it’s time to choose which financial companies are worthy of their trust.
In fact, 70% of them say that ethical financial practices influence their choice of provider, while 35% say their loyalty will increase if the company responds to what customers have to say to improve their services.
With the widespread growth of online reviews and the multiplication of digital influencers in the past few years, consumers are shifting their attention to the online world when it’s time to choose which businesses are worthy of their trust.
In the end, legitimate customer feedback, feeling heard and ethical behaviour seem to be the ultimate deciding factors.