When good product reviews are bad news for business

 

Customer reviews are a very important source of information for buyers when it is difficult to evaluate or test a product before purchase, as in the case of online purchases. Positive reviews can amplify sales by as much as 0.149, and is particularly relevant for high financial risk decisions, services, hedonic products, and new products.

 

However, research shows that very positive reviews can actually have a detrimental effect. Where is why.

 

The boomerang effect

Research by Reimer and Benkenstein* showed that some highly positive reviews can actually reduce sales, whereas highly negative reviews can increase them. This ‘boomerang’ effect happens when consumers think that:

  • the writer of the review has vested interests and, thus, is not trustworthy;
  • the arguments provided are not valid. For instance, when the review is not meaningful, is not informative, does not contain enough arguments, or does not provide good reasons to support the assessment.

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Implications for marketers:

  • It is important to provide trustworthy reviews. If you manage the review platform, try to ask reviewers for detailed recommendations (for instance, via filters and review menus), and design mechanisms that reassure website visitors that these are genuine reviews.
  • Positive reviews that are seen as untrustworthy can backfire. If you manage the review platform or are displaying reviews on your website, give more emphasis to positive reviews with good argumentation (e.g., show them first);
  • Negative reviews that are seen as untrustworthy may not hurt your sales, at all. Hence, when responding to negative reviews, consider highlighting the poor argumentation used or, if relevant, the untrustworthiness of the reviewer.

 

 

The disconfirmation effect

Research by Minnema and colleagues** found that overly positive online reviews are associated with high levels of product returns. The authors say that when people buy a product based on very positive reviews, they have inflated expectations about the product. These expectations are not confirmed when the product arrives, thus leading to disappointment and product returns. This is problematic for online traders because the logistics costs of handling product returns can dent their profitability. This ‘disconfirmation’ effect is strongest for:

  • Consumers with limited experience of buying from this online retailer;
  • Cheaper products***

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Image source

Implications for marketers:

  • It is important to set the right expectations. Try to get and display a broad range of reviews on your site.
  • Information that gives an accurate description of the product is likely to reduce disappointment post-purchase. Hence, when encouraging consumers to write a review, suggest a range of factors that provide a good representation of the product’s performance.
  • The disconfirmation effect is stronger for new customers. Consider providing additional information to customers that helps them decide whether the product is suitable for them (e.g., a checklist, or infographic), and which helps them make the most of the product (e.g., links to free video tutorials).

 

There you go. Some online reviews are so good… that they turn out to be bad.

 

Did you experience the boomerang or the disconfirmation effect yourself?

 

 

 

* in the context of restaurant reviews

** in the context of electronics and furniture reviews

*** the authors reason that expensive products are risky and, thus, consumers do extensive research before buying the product, which offsets the impact of an overly positive review

Using emojis in marketing can backfire

According to a study conducted by Professor Vyv Evans for Talk Talk, 80% of UK people use emojis to communicate, with 40% saying that they had sent messages using only the famous icons. Emoji, the study claims, is the ‘fastest growing new language’.

 

Unsurprisingly, some brands have embraced the emoji trend, and started using the famous symbols in their campaigns and branding initiatives. For instance, Twentieth Century Fox used them in billboards to advertise the movie “Deadpool”.

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Image source: Adweek

Another favourite of mine is P&G’s #LikeAGirl campaign, proposing emojis that are representative of girls’ broad interests and activities.

 

Before you jump on the emoji bandwagon, though, you should take heed of another study. This one was done by researchers at the University of Minnesota, and found that there is quite a lot of potential for miscommunication, when using emojis.

Specifically, the study found that:

  • Two people looking at the exact same emoji on the same smartphone platform can interpret that emoji quite differently.

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Image source: grouplens

  • Sending an emoji across smartphone platforms (e.g., from an iOS to an Android) changes its appearance, and this influences how positively or negatively people react to the emoji.
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Image source: Miller et al (2016)
These differences in interpretation indicate that there is significant scope for misunderstandings and, possibly, upset. The implication for marketers planning to use emoji in their marketing communications and branding initiatives is that they need to test that their emoji-ladden messages a) elicit the desired sentiment and b) work well across different platforms.
What’s your favourite (or most cringe-worthy) emoji-based marketing campaign?

New book chapter: What makes a digital innovator?

Sarah Quinton, Tribi Budhathoki and I contributed a chapter to a new book published by the Institute of Directors. The book is entitled ‘The Growing Business Handbook’, and is edited by Adam Jolly. Sample chapter and table of contents are available here.

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Our chapter looks at factors supporting the adaptation of European small and medium firms (SMEs) to the digital environment, building on research that involved 357 companies, in 5 different industry sectors and in 4 European countries. Here is an excerpt from the chapter’s executive summary:

The findings indicate that there are core similarities in the characteristics and capabilities  required of SME leaders between disparate types of businesses, irrespective of size, country or sector. Our findings also indicate that it is not only the knowledge level of individuals leading firms but also the positive predisposition of those individuals which facilitates the adoption of digital innovation. Being a digital innovator requires a combination of intangible, soft skills and externally measurable knowledge levels.

Oxford Brookes has produced a video about our project’s fundings. I will share it with you, once it is available online.

video

 

 

 

 

Artificial intelligence and new marketing opportunities

In episode 73 of podcast ‘Review The Future’, the hosts interview Calum Chace, author of the book ‘The Economic Singularity: Artificial Intelligence and the Death of Capitalism’. The three discuss the long-term implications of the improvement of artificial intelligence (AI) so that it can now effectively replace humans in more and more tasks; a discussion that covers consequences for areas as diverse as employment, income distribution, welfare systems, or capitalism.

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It is a fascinating discussion, though slightly anxiety-inducing! After all, as Chace notes, it is not even necessary for AI to be good enough to replace humans in a certain area (say, driving) for its effects (on employment, income, etc…) to be felt. All we need is for perceptions about AI’s ability to replace humans to take hold.

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Anxiety aside, the discussion is also extremely stimulating if we start considering the resulting opportunities in terms of new products and services. This post outlines my initial ideas about such opportunities.

 

Here we go.

 

The premise

The key premise of the podcast discussion is that AI will continue to improve to a point where it can replace humans, at an advantage, in most areas of economic life.

 

This premise is encapsulated in the book’s blurb, which reads:

Artificial intelligence (AI) is overtaking our human ability to absorb and process information. Robots are becoming increasingly dextrous, flexible, and safe to be around (except the military ones).

(…)

(W)ithin a few decades, most humans will not be able to work for money.  Self-driving cars will probably be the canary in the coal mine, providing a wake-up call for everyone who isn’t yet paying attention. All jobs will be affected, from fast food McJobs to lawyers and journalists. This is the single most important development facing humanity in the first half of the 21st century.”

 

The implication of this premise is that those whose skills can be replaced by AI, will lose. By contrast, those that control access to AI and those whose skills can not be replaced by AI will win.

 

The exceptions

The podcast discussion considers three areas in which humans have an advantage over AI: Artistic vision, Attention, and Status. And this is what I think they mean.

 

Artistic vision – the ability to conceive of a work of art (e.g., a painting or a story). Though, it is perfectly possible for AI to execute that work of art (such as producing a digital picture or 3D sculpture; or stringing sentences together to write a book).

 

Attention – the ability to share experiences, consciously (e.g., attending a concert together and sharing in the emotion; or reading a blog post and engaging with the ideas expressed in that post).

 

Status – the ability to perceive that someone is better than their peers in some significant dimension, and acting accordingly (e.g., by praising that person, trusting their judgment, or trying to gain their favour).

 

The opportunities

So, what do this premise and these three exceptions mean in terms of opportunities for new products and services?

 

Here are my initial ideas. I am very conscious, however, that these suggestions are rather narrow, because I am neither an entrepreneur nor a futurist. So, I am looking forward to hear what opportunities you can spot.

 

>> Ubiquitous use of AI

Much like those selling maps, buckets and spades benefited from the gold rush, or e-commerce consultants and website developers benefited from the internet bubble, those providing AI related advice and equipment are likely to benefit from the popularisation of AI.

 

Consulting services are likely to be in demand, particularly those around strategy and change management. There are also some opportunities around the manufacture, deployment and maintenance of AI equipment. And, also, some opportunities around the design and maintenance of software, though there are limitations here around machine learning applications.

 

>> Artistic vision

While AI may be able to string materials, colours and words together, it can not consciously create a piece of art that is meant to elicit a particular emotion or reaction.

 

Of course, the programme may learn that certain names or words are associated with a topic or a sentiment, and combine them in different ways in order to elicit a certain response – for instance, as measured by the sentiment analysis of customer feedback. However, I think that AI will always be lagging behind the human artist, here, in terms of sensing, responding to, or even moulding human sensitivity.

 

 

>> Attention

Some people crave attention, the others want to express it, and companies that facilitate the transfer of that attention can win. For instance, companies that offer platforms that make it easy for the two parties to get together – like the Airbnb or the Uber of attention.

 

Or companies that produce technology that bridge the gap between attention givers and attention seekers – like what Skype did for communication.

 

 

>> Status

The issue with status is that it needs some sort of certification – e.g., you need a title (like a university degree), or a symbol (like a logo on your website) or a measure (like a Klout ranking). So, entities that confer or certify whatever form of status is valid in that AI-dominated world, could do very well.

 

The other issue with status is that it is dynamic. It can increase or decrease, because of what is happening to your source of status (i.e., whether you are getting more of whatever your status is based on), and to others (i.e., if more people acquire the source of status, the value of your ‘stock’ decreases). So, it seems to me that the providers of services that amplify status can do very well… much like investment bankers or wealth managers can increase your wealth, currently, by getting you return for your investment and/or making sure that you get more return than the market’s average.

 

 

Your turn: let your imagination run, and tell me who wins as AI becomes more and more popular. I can’t wait to read your ideas.

 

Should gyms be fun or hardwork?

I am quite annoyed with myself.

 

You see, I usually pride myself of seeing through tempting packaging or sales deals, and base my purchase decisions on the product and its value for me, more than anything else.

 

 

FullSizeRenderYet, here I am, very foolishly mourning the fact that the gym that I usually go to was bought by another company and is trading under a new brand. All the factors that arguably matter for gym choice (equipment and classes, opening hours and quality of personnel, supplementary benefits, and social factors) are still the same. The main things that changed are that the gym is no longer so red, and that there is a new website to book classes. So, it really should not make any difference to me.

 

I guess that, after all, I was attached to that gym’s brand. I liked the former brand’s focus on fitness, rather than the current one’s focus on health. And I like the sense of mischief and fun associated with the former brand, better than the ‘sensible’ image projected by the new one.

 

And maybe the former gym brand is actually onto something because this study by Carolina O. C. Werle, Brian Wansink and Collin R. Payne found that when exercise is perceived as fun, it leads to less snacking and over-eating than when exercise is perceived as hard work.

 

Will I change gym because of the new owner? Well, unlikely.

 

Research in the hotel environment, concluded that consumers’ identification with the brand affects their evaluation of the brand but that, at the end of the day, hotel choice depends on the customers’ evaluation of the service experience. Likewise, I am likely to continue to use the gym because it scores well on the gym choice factors mentioned above.

 

But, boy, do I hope that the new brand will start injecting some fun into its identity and activities.

 

To what extent is interacting with a fun fitness brand important for you?

 

July 2016 round-up

Hello from sunny California, where I travelled to in order to attend (and present at) the Academy of Management annual conference. I am presenting my research on the hidden biases of algorithms used in decision making – specifically, those present in algorithms that sort through our financial transactions.

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If you are interested in this topic, you may like this discussion about the importance of algorithms in daily life, the biases in their development and use, and the challenges of studying them. It is a really long video, though (1h34m) – so, save it for when you have some time.

 

Other than that, here are my highlights from July. Tell me yours, in the comments below.

 

Researching

My bid for a small grant to do some work on the digital footprints of children was rejected😦

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The rejection seemed to be mostly due to the high number of applications and due to preference being given to early career researchers, rather than because of a major flaw with the application. As a result, I did not get much feedback that I can build on to improve it, before I submit it elsewhere.

 

I need to think about how I can improve this research proposal, as I really want to getsome funding to do this work, because I think that it is highly consequential for marketers, as well as consumers (particularly, children as future consumers).

 

 

Writing

The paper that I revised and resubmitted last month, came back with a request for some further changes. As it is for a special issue, this is the last round of revisions – in other words, I either manage to address all concerns this time, or it won’t be considered for publication. Can you keep your fingers crossed for me, please?

 

I also submitted an extended abstract for consideration by another publication. And I continue to make (slow but steady) progress on that ‘co-authored paper which has been neglected for too long (but which I am determined to submit this summer!)’ that I mentioned last month.

 

Teaching

Teaching wise, I had the presentations from the student consulting projects and, as usual, I was most impressed by the quality of their research and recommendations. Live projects are a lot of work to organise and support, and always cause a lot of stress to students and teaching team alike… but they are so valuable.

 

Other than that, I had marking to do, annual reports to write regarding my PhD students, and dissertation supervision.

 

Learning

I have been going through the results of a large survey done with some colleagues, in order to write a report for the participants.

 

As I trained as a qualitative researcher, it is a bit challenging for me to query the data beyond simple descriptive statistics. So, making sense of the data in order to write the report has been an opportunity to hone my quantitative analysis skills.

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When I was on sabbatical, I did part 1 of a statistical analysis course… but, then, I got back to my daily routine and the demands of the programme leader role, and was unable to complete part 2. I must redress this situation!

 

 

What were July’s highlights for you?

Consumers are talking about you, but what do they really mean?

Dr. Robin Croft, a fellow academic and much valued commentator here on the blog, drew my attention to an ethnographic study that he carried out with two other colleagues [1], on how different genders talk about products, services and brands.

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Croft and his colleagues observed informal conversations between various groups of people. Each group had only male or female participants, and they all knew each other, already. So, this study was as close as you can get to hearing friends or colleagues sharing their experiences or views about the products and brands that are meaningful to them.

 

As captured in table 1, the research team found significant differences between the all-male and the all-female groups in terms of content of the conversations, as well as the extent of information exchanged and the dynamics of that exchange.

Croft female vs male

Image source

 

For instance, while the men tended to talk in broad terms (e.g., about the product category), the women were more inclined to talk about specific product names or service providers. Likewise, the conversations in the all-male groups tended to be rather linear, and use a limited verbal style. By contrast, the all-female groups engaged in very iterative conversations, using rich vocabulary and frequently interrupting each other.

 

Another interesting aspect detected by the researchers was that women would engage in discussions, whereas the men were more likely to state facts. The researchers argue that this is because these conversations serve different purposes for females vs. males. Specifically, the researchers argue that, in these conversations, females shared information to help each other, whereas the males share information to assert status. They say:

the key source of power was knowledge, and respondents appeared to be using it to make power statements and to position themselves vis-à-vis other group members. Many of the male interventions seemed designed to show the speaker in a new light – intelligent, articulate, well informed, widely travelled, well read, and so on (p. 726)

 

So, according to this research, different people going through the same consumption experience might talk about different things. Moreover, even if they mention the same aspect of the consumption experience (for instance, the price of the product), it might have different meanings. For some, the information could be shared primarily for the benefit of the recipient of the message; for others, the information could be shared mostly for the benefit of the sender of the message. For some, it could be one of many details about the consumption experience; for others, it could be the defining feature of that experience.

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This paper certainly gave me some food for thought about factors to consider when analysing social media conversations. What about you?

 
[1] Croft, R., Boddy, C. and Pentucci, C. (2007) Say what you mean, mean what you say: An ethnographic approach to male and female conversations. International Journal of Market Research 49(6):715-734 available here