But losses mount for the home furnishings e-retailer that went public in October.
Consumers will spend at least 20% more when a service gets an excellent rating in an online review,according to a survey by comScore and advertising research firm The Kelsey Group.
Online reviews have a big impact on customer spending on offline services, suggests a survey of more than 2,000 Internet users in October by web metrics firm comScore and The Kelsey Group, which researches local media and advertising.
The study examined the impact of online reviews on offline spending at restaurants and hotels and for travel, legal, medical, automotive and home services. 24% of respondents said they had checked online reviews before paying for an offline service. 41% of those who consulted restaurant reviews subsequently went to a restaurant and 40% who read hotels reviews went to a hotel. While they did not necessarily go to the restaurant or hotel reviewed, their behavior suggests that online reviews have an impact on what customers do, a comScore spokesman says. By contrast, only 8% of those who read reviews subsequently purchased legal services and 19% home services.
More than three in four respondents in all but one category said online reviews had a significant influence on their purchase, with hotels ranking highest at 87%. The one exception was home services, with only 73% saying reviews had a significant impact on buying decisions. 97% of those who made a purchase based on an online review said they found the review had been accurate.
Consumers are willing to pay significantly more for services that are highly rated, the survey found. Survey respondents said they would be willing to pay 20% more for a home service rated excellent over one rated good, and 99% more for a top-rated legal service, with the lift in other categories ranging from 22% to 49%.
“These data show the importance of local service review sites in consumers’ purchase process,” says Steve Marshall, research director for The Kelsey Group. “With such a large percentage of review users subsequently purchasing, it’s vital that local service providers have a positive presence on these review sites.”
“This study underscores the importance of providing not just good, but excellent, service if a business hopes to generate positive consumer reviews which will result in greater sales,” says Brian Jurutka, senior director of comScore Marketing Solutions.