Daily Archives: May 8, 2012

Online Reviews and Ratings – A Cautionary Note

Sites like Epinions offer consumer reviews and ratings on thousands of products.  Yelp allows consumers to rate local businesses – restaurants, hair salons, car repair shops and the like.  Amazon is credited with allowing consumer reviews and ratings, which in the early days of e-commerce was an important means of building trust.

Unfortunately, you can’t always believe what you read.  There is a big incentive for unscrupulous companies to promote their products or demote their competitors’ products by posting fake reviews and ratings.  Several instances of fake reviews have been uncovered.  Researchers at the University of Illinois have developed an algorithm which can detect fake reviews.  Reviews that containing overwhelming praise and absolutely no negatives should be viewed with skepticism.

Opinion mining and sentiment analysis on social media is a big focus these days.  But the value of such analytics hinges on the authenticity of opinions posted.  Angie’s List, which is an online consumer review site guards against fake reviews by checking each posting.  Their business model in interesting and quite different from others such as Yelp.  Angie’s List charges consumers a membership fee.  This ensures that they have the full name, address and credit card information of their members.  Only members are allowed to post reviews.

A 2007 study by comScore revealed that “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.”  At least three quarters of respondents in that study said they were influenced by online ratings.  Clearly there is an incentive for submitting fake reviews.

Some consumers are more susceptible to social influence.  According to one study, low involvement consumers seem to sway in the direction of the reviews more than those who have a higher involvement in the product category.  Perceived trust in the reviewers does impact their effectiveness.

Some tips for consumers:

  • If reviews and ratings are completely positive with no negatives, then be cautious.
  • If same reviewers seem to post in different sites or review multiple products within a site, they either have too much time on their hands or could be paid to do this.
  • Those with extremely positive or negative views are more likely to be motivated to post them, compared to those with less extreme views or experiences.
  • For higher involvement products, see if reviews by consumers are roughly the same as reviews in reputed sources such as Consumer Reports. Use multiple information sources and your own judgment.

Sometime what you read may not be what you get.  As with everything, buyer beware.