We’ve all been influenced by customer reviews, right?
Whether it’s a low-ticket item (ordering food online) or not we use the “knowledge” gleaned from other users as a habit before we make up our minds.
Is this new? Not exactly, because in the pre-Internet era, we bumped into this information in a haphazard way — chance conversations during our commute, by trading opinions over our fence etc.
But it’s less haphazard now. It’s ingrained in our purchasing behavior.
In the just about to be released book, Absolute Value, by Itamar Simonson and Emanuel Rosen, we see how this stream of information is what marketers must now lose sleep over.
I just received an advanced digital version of the book from Rosen, and I have to say it is a compelling idea –the idea of how “nearly perfect information” could disrupt the pillars of marketing we know of as segmentation, positioning, promotion etc. And if course the whole basis of branding and brand value would be in question, if their thesis is true.
The New York Times described it as a book that deals with the power of online reviews, based on Dr. Itamar’s decades-long research at Stanford, prior to this.
Here’s how they summarize how the power of information from ‘other people’ tilt the balance.
Customers’ purchase decisions are typically affected by a combination of three things: Their prior preferences, beliefs, and experiences (which we refer to as P), information from marketers (M), and input from other people and from information services (O). …
…If the impact of O on a purchase decision about a food processor goes up, the influence of M or P, or both, goes down.
For those whose business is all about the M — the marketing push and the brand strategy, you better start paying attention to how the hoi polloi, those “other people” might matter, after all.