TripAdvisor, Yelp, Glassdoor, etc. – There exist hundreds of online review websites on the internet. Even if we don’t admit it: everybody already read online reviews on a certain product or service, before buying it. That is absolutely normal according to latest surveys: 90 Percent of consumers are reading online reviews before visiting a business! What an enormous number, which underlines the fact that online customer reviews are steadily gaining in importance.
How does the business model “Online Review Website” work?
The review websites are mainly supported by advertising placements. Some rating websites also permit businesses to pay for better listings. Those normally don’t affect the normal ratings, because paid listings are often highlighted. Product review websites may also be supported by providing affiliate programs. These types of websites offer affiliate links to websites that sell the reviewed products. Due to the special marketing thrust of these affiliate review websites, critics concern about the non-objectivity of the reviews.
The begin of TripAdvisor’s success story
As online reviews become more and more important for today’s customers, it is not surprising that several review websites record enormous results. One of these companies is TripAdvisor, a travel website that offers reviews and more information for customers about travel destinations, hotels, restaurants, etc. all around the world. The unique business model and its outstanding outcomes lead to a certain admiration by a lot of people.
The company, based in Boston, was founded in 2000 by Stephen Kaufer and Langley Steinert. They started their company with a totally different business model in mind: building an immense database of travel information and providing a “white label” search engine for traveling such as Expedia and co. After some years of no success, the founders introduced a new model: the cost per click model. Every time a TripAdvisor consumer clicked on a hotel to book a room, TripAdvisor charges the hotel a little bit. Three months after the model’s launch, TripAdivsor achieved breakeven. Since then the company is growing profitable.
After some time, TripAdvisor allowed users to post their own reviews and experiences on hotels, restaurants, etc. The founders recognized after a while that the main traffic of their website was established thanks to these reviews. They decided then to focus on user reviews and the fact that authentic, fresh content has to be available all the time. Thanks to these direction changes, TripAdvisor was growing successfully.
The power of reviews
TripAdvisor conducted a study about their customers, here is the video about it. It is very interesting to see how TripAdvisor’s consumers behave, while planning a trip or before booking a hotel room or more. Have a look on the video and see for yourself!
Online reviews risks
Amazon was one of the first online stores to allow consumers to post reviews of products in 1995, and it remains one of the most important resources for consumers wanting to make informed purchase decisions. But the online reviews may backfire.
In 2015, the American distribution giant lodged a complaint against more than thousand people accused of having written false opinions on products proposed in its online shop. The complaint, consulted by AFP, aims at not identified individuals (” John Doe “) numbered from 1 to 1.114, accused of proposing under pen names their service to invent notices on articles sold on Amazon.
So – online reviews are a real opportunity for companies in order to create a trusting relationship, but it can be a real danger at the same time when competitors interfere to tarnish the reputation of a company.
Opportunities of online reviews in the future
According to a research of Yoti in 2015, there were more than 80% of people who did not trust all online reviews written by real people. Nowadays, both businesses and consumers are gaming the system on a massive level. Businesses are using employees to write glowing reviews for their own products, paying external individuals to write positive reviews, and cherry picking any actual user-generated reviews so that only the best ones appear. Equally, enterprising individuals are openly advertising and selling their review writing services online. That is the reason why when you are looking for a product or service online review, you may see positive reviews on a website but it is opposite on others.
Amazon solved these problems by filing a lawsuit against 1.114 individuals who allegedly have posted fake product reviews on the site in 2015. Whether it is successful or not, the lawsuit signals a clear message to fake reviewers. It also sends a warning to vendors who seek out fake reviewers for their products. Besides, this is a smart way to keep reputation for Amazon in competitive environment nowadays.
The more societies develop, the more online reviews are important because consumers do not want to take risks and spend their money to buy and experience products or services before looking for reviews or rating about theirs they care about. These are not only opportunities for third-party sources such as Yelp and TripAdvisor but also threatens to those using tricks to maintain reputation.
What do you think of the importance of online reviews? In your opinion, are they really that important? And how about fakre reviews – are they really unethical or do critics exaggerate?
We are looking forward to read your comments!
Authors: Fatoù Diop, Pia Froehlich, Duc Vu