New discipline is needed to harness consumer power

The other day, I wanted to buy an external hard drive. Being a techno-ignoramus, I looked around for some peer reviews to give me guidance. They left me feeling more confused than ever. Some said the product was great. Others said it was awful. I was none the wiser.

Peer reviews are a relatively new online phenomenon that is supposed to be empowering consumers. But things aren’t as simple as that.

For a start, they can be a means of manipulation if a retailer only publishes the positive reviews, or if they are written by sellers pretending to be buyers. That’s why some services, such as Reevoo.com, only carry reviews from individuals who they know actually purchased the item in question. Reevoo polls the customers of 55 retailers (including Dixons, Currys, Jessops, Empire Direct, T Mobile, Orange, Vodafone and Carphone Warehouse) for reviews. To do this, it had to build relationships with each retailer and establish mechanisms for getting in touch with their customers: a complex and costly process.

Meaningful responses

Also, most reviews aren’t very useful. Saying “it’s great!” or “it sucks!” isn’t very informative. So Reevoo prompts reviewers to comment on a range of salient issues. If it’s a TV, for example, it asks them about design, sound quality, image quality and ease of use, as well as value for money.

It also provides a free-form box to capture comments about other issues (such as connectivity, number of scart leads and energy use) which it uses to create extra comparison categories for people concerned about such things. This creates its own operational balancing act. Ask too little and you don’t elicit enough useful information. Ask too much and doing reviews becomes too much like hard work for the customer.

Even then, you’ve still got problems. How, for example, to get a meaningful overview from 35 different reviews? How to weigh the negatives against the positives?

In response, Reevoo has created scores for each attribute (sound, image, etc on a scale of 1 to 10) to create an overall score for each product. But this leaves a nagging question: is 9.2 a good or mediocre score for products in this category? Simply setting one product’s average score against another’s might be misleading. What if one product has two reviews while the other has 200? What if the reviews of one product are recent, while those for another are old? (If you look at some sites, some of the reviews are five years old or more. How much has changed since then?)

Also, what’s more use to a potential buyer: a review written straight after purchase in the glow of post-purchase rationalisation, or a year later, when its weaknesses have crawled out of the woodwork?There’s also a question of fairness to suppliers. Say your product has a glitch in it. Reviewers pick it up and bad reviews get plastered all over the place. You rush to fix the glitch. But the bad reviews are still out there in abundance. Should the review site give you right of reply? Should it withdraw the bad reviews?

Too much information

We are still only scratching the surface. Different people want different things from product reviews. My son is a geek photographer. He sneers at little details in cameras that I don’t think I would ever notice. All I want to know is, if I point and shoot, will I get a decent holiday snap? A product review by my son would be useless to me. That’s why Reevoo is now asking reviewers to categorise themselves so that people can find reviews from “people like me”.

Also, people use reviews for different purposes. For some, it’s about sifting through alternative choices in detail to make “the best choice”. For others, it’s about risk reduction – avoiding the lemons. For others, it’s about category education – what are the things I should look out for but wouldn’t think to ask about? Yet others simply want quick navigation to a good enough choice without having to spend hours researching.

To address this need, Reevoo has “recommended buys” based on aggregated peer reviews for different categories, such as home cinema TVs, family TVs, budget TVs, small flat screen TVs and so on. (By the way, making recommendations opens up its own can of worms. What if the product with the highest review scores isn’t popular? Should the review site factor in considerations such as popularity, or how new it is on the market, as well as review scores? After all, they may influence the buyer’s choice.)

Then, of course, a product review in isolation doesn’t solve the shopper’s problem. Is the retailer’s service good or bad? What about availability, proximity, price and the supplier’s social and ethical credentials?Finally, all these factors need to be designed into a website that’s easy to use and powers a viable business model that makes money. The more sophisticated the service, the tougher this challenge becomes.

What lessons can we learn from this example? Two stand out. First, the common assumption that “consumer empowerment” is bad for sellers is mostly false. Sellers can benefit from informed consumers trading through trusted channels. Retailers including peer reviews on their sites typically generate conversion rates 90% higher than when reviews are absent. For suppliers, peer reviews are a new form of market research that’s rich, fast – and largely free.

Second, clichés about “the internet empowering consumers by making more information available” are superficial. Consumer empowerment is not some vague “trend” or “phenomenon” generated by the mere “availability” of information. Generating and processing information that is both trustworthy and useful takes a lot of hard, careful work. (At present, Reevoo is focusing most of its development efforts on just one category – televisions – because even getting one category right is tough.)

Serious business

Consumer empowerment actually requires a new type of business – one that is as disciplined, complex, dedicated and focused as any other. This means real consumer “empowerment” will take much longer to mature than many suppose.

As it does mature, however, its effects on marketing channels and practices will be all the more profound. Marketing today is dominated by two top-down “influencing” channels – media advertising and retailing. As sources of bottom-up, trustworthy buying information and advice mature, they could become the first port of call for many consumers when going to market. As a change, this is as big – probably far bigger – than yesterday’s rise of “retailer power”.