Word of Mouth, Online Reviews Most Influential in Purchase Decisions

Thursday, October 23rd, 2008 by Jordan McCollum

Word of Mouth, Online Reviews Most Influential in Purchase Decisions

UPDATE: The full PDF of the study is available (link via RWW).

A new study by Rubicon Consulting states that word of mouth and online reviews are the most influential factors in consumer purchasing decisions. According to the study, the Internet is also important in providing customer support. The survey also looked at consumer’s use and perceptions of different websites and categories of websites:

The Web is the #2 resource for customer support information, after user manuals. It ranks ahead of calling the manufacturer or asking a dealer.
Website categories that get the most daily usage are search, social communities like MySpace and Facebook, general news websites like CNN.com and NYTimes.com, and online banking.
The websites that Americans value most are (in order), Google, Yahoo, YouTube, Wikipedia, and Facebook.
Although Yahoo’s financial challenges have generated a lot of press attention, it continues to have a very large and loyal following.
Facebook appears to be ahead of MySpace in terms of number of users in the US, and perceived value of the site.
Despite extensive publicity, the community sites SecondLife and Twitter reach only a few percent of US Internet users. (Surprise, surprise.)
Democrats are more active online than Republicans. Democrats are more likely to participate in online communities, and say they are more heavily influenced in their voting decisions by information they find online.
Young people (age 22 and under) account for about half of all the content and comments posted online.

What’s the take home message for us? Well, this may be preaching to the choir, but it’s important to have an online presence, including in search results and online communities (especially Facebook, apparently). Harry Max of Rubicon Consulting says:

Many companies downplay the importance of online communities because only a few percent of all Internet users contribute to them heavily. What they don’t understand is that most other Internet users read those reviews and rely on them heavily when making purchase decisions. Taking good care of online communities can be a huge money-saver for companies trying to get more marketing impact from limited budgets.

On that note, it’s also important to keep track of what people are saying about your company and products in those online communities—aka online reputation management. (Gee, I wonder where you could find something to help monitor all these communities and more for mentions of your company and products. . . .)

What do you think—which of these observations is most useful? Most surprising?

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18 comments on “Word of Mouth, Online Reviews Most Influential in Purchase Decisions”

Dylan Darling Says:

October 23rd, 2008 at 2:11 pm

I agree. Consumer reviews on the web help people make business and purchase decisions. Testimonials are found throughout the web on products and sevices. It’s important to make it easy for your clients to write reviews. Sometimes it pays off in SEO terms as well, because the client links to your site in their review.
Nick Stamoulis Says:

October 23rd, 2008 at 4:30 pm

These are very interesting pieces of information. I wonder where social media marketing will be down the road since half is made up of such a young demographic. I think we are def. only on the nose end of social media and it some day will be a wild beats to tame.
Ashlee Says:

October 23rd, 2008 at 11:45 pm

This is true.Sometimes a few customer reviews are even stronger than a long sales page, that’s why I have added a product review section to my diet weight loss blog recently to encourage people to leave honest reviews for different products.I think this not only provide additional information for consumer but also help them to make better choice!
Kurt Says:

October 24th, 2008 at 3:59 am

great post, reviews sites are getting really hot because most visitors are ready to buy, an easy way to make some nice commission bucks..

Kurt’s last blog post..My Twitter Strategy-My Approach to use Twitter Effectively as a Marketing Tool
Secured Homeowner Loan Says:

October 24th, 2008 at 4:39 am

Social media marketing is a growing way of getting quality backlinks, however I think that it will only be a short term hotspot. Google will fade the links in social media in the future as it is abused too easily.
Dave Law Says:

October 24th, 2008 at 4:42 am

It surprises me that the internet is only the number 2 resource for customer support. I find searching forums much more helpful than manuals and their FAQ pages.

It’s a shame there wasn’t a stat about how many people research buying decisions on the web before they go and buy… I find it interesting how, thanks to the web, a customer can often be even more of an expert on the product than the sales person.
Nicole Price Says:

October 24th, 2008 at 5:46 am

In terms of importance, they are all valid. If anything, the importance will only grow, even globally as penetration of computer use increases in the rest of the world.

Nicole Price’s last blog post..Plan for Halloween
Green Says:

October 24th, 2008 at 9:13 am

No doubt there is a lot of opportunity to capture sales from those looking for support on products sold by your competition. I had no idea the demographics were still skewed that heavily towards the sub 22 crowd.

Green’s last blog post..Commerce Goes Off The Cliff
Word of Mouth, Social Communities and the Web: Money savers and Influencers , 77Lab Says:

October 24th, 2008 at 12:16 pm

[...] liked how Marketing Pilgrim narrowed it down for us and this is the well-supplied [...]
Growing Your Business with Social Media “Sweat Equity” - One Approach - Scott Clark Says:

October 24th, 2008 at 12:28 pm

[...] we referred to earlier. But the “feeling” of every question should be more like “word of mouth” wisdom than a canned corporate answer. Be yourself, be helpful, authentic and transparent – [...]
Christopher Ross Says:

October 24th, 2008 at 2:40 pm

I couldn’t agree more!

One of the first things that I look at when I’m making a purchase these days is other peoples reviews, especially of big ticket items like TV’s and cars. I can’t wait to see how new models of major appliances etc start to change when companies realize they can no longer hide faults.

Christopher Ross’s last blog post..Adapting my holiday logo rotator for WordPress
Busby SEO Says:

October 25th, 2008 at 7:04 am

Social media marketing is a growing way of getting quality backlinks and help people make business and purchase decisions.

Busby SEO’s last blog post..By: Busby SEO Testing by Dewaji
Wayne Smallman Says:

October 25th, 2008 at 11:33 am

“What do you think—which of these observations is most useful? Most surprising?”

None really. They’re all part & parcel of a gradual but measurable trend.

The penultimate points means nothing to me since I don’t care about US politics, but I’m guessing it’s a surprise to some people in the US.

In time, places like Get Satisfaction will become heavily trafficked, and StumbleUpon might have to set its stall out differently, to cater to a slightly different audience. Or to the same audience but with slightly different needs…
Erik freefor15 Says:

October 25th, 2008 at 1:39 pm

I will almost always read the testimonials if they are on the page before buying anything so it helps to have them.
FreshNetworks Blog » Blog Archive » Online reviews - second biggest influence on purchase decisions Says:

October 27th, 2008 at 6:58 am

[...] Word of Mouth, Online Reviews Most Influential in Purchase Decisions [...]
iPwner Says:

October 28th, 2008 at 8:44 pm

Online reviews are obviously really helpful. Blog reviews can be really powerful!

iPwner’s last blog post..Week 9 NFL Power Rankings Titans Undefeated!
go green Says:

November 5th, 2008 at 9:26 am

Online reviews are great, especially on Amazon. What is nice is that they give you such a broad range of reviews from people across America. Sometimes the reviews can be biased, but if there are enough reviews, it usually gives you a good feeling about the product.

go green’s last blog post..Green Renewable Energy Certificates
The changing face of Social Media Says:

November 6th, 2008 at 9:41 am

[...] in point would be Jordan McCollum of Marketing Pilgrim and her overview of a Rubicon Consulting study stating that: “word of mouth and online reviews are the most influential factors in consumer [...]

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