Which online voices do we actually hear?
Social media can provide valuable customer feedback about products; a lot of companies have already started to listen to this online word of mouth. They regularly scan online conversations to understand customer sentiment. But how accurately do these conversations represent the true underlying sentiment of a product’s customers? To answer this question, research done by Wendy W. Moe, David A. Schweidel and Michael Trusov analyzed product ratings and sales over time from a popular online retailer. By studying rating behavior at the level of individual contributors, they uncovered several key dynamics that drive the evolution of online forums. Drawing from the full set of ratings that were posted on the website of the retailer they studied, the researchers examined ratings, contributed by 2,436 individuals, for 200 products and identified several important dynamics at work in online forums.
Maybe a bit more context is needed here. In the article at MIT the authors write:
“While customers routinely seek out the opinions of others prior to making a purchase, it’s much less common for customers to share their own opinions online. As a result, the opinions that potential buyers and social media strategists see come from only a small segment of the customer population â€” one that may not mirror the sentiment of all customers. While market researchers have long used small samples to survey customers’ opinions, such samples are selected with considerable care to ensure that they are representative. Since the decision to post a rating or review online is up to the customer, the representativeness of the opinions posted online is outside of a researcher’s control.”
The dynamics of the online voice
Some of the findings and conclusions:
- More involved customers will often skew their ratings downward to stand out from the crowd, and most customers will be influenced by comments that have already been made.
- Forums with a â€œpre-existing consensus of opinionâ€ garnered more positive customers.
- Customers are likely to comment on products they have an extreme opinion about, one way or the other.
- Comments tend to become more negative over time as the more involved, more critical customers begin to dominate the forum while their less involved counterparts stick to the sidelines.
The researchers found some important dynamics based on the postings on the retailer’s website:
Adjustment effects. These occur when contributors express opinions that differ from their underlying product evaluations. We found evidence that more involved customers skew their ratings downward to stand out and that less involved customers tend to shift their ratings upward to further contribute to a consensus of positive opinions.
Selection effects. Forums that have a pre-existing consensus of opinion encourage participation from more positive and less involved customers. In contrast, when there is disagreement, participants tend to be the more involved customers who post more negative opinions.
Polarization effects. Customers tend to provide online ratings for products for which they harbor extreme opinions â€” whether positive or negative.
The research concludes, and this is a very important remark for marketers and communication people who are trying to understand the voice of the consumer online: “This is not to say that managers should entirely disregard what they hear online. Rather, they should be aware of these potential dynamics so they do not overreact to negative online opinions. In many cases, these opinions may only represent a small but vocal segment of the customer population.” In the MIT-article, the authors also discuss the involvement of companies trying to “fix” negative conversations and forumthreads with the adding of artificial positive comments about products. That is, of course, the most stupid thing to do for a company (think of the negative buzz it evokes and about taking your customers seriously) but, and I didn’t know that, the research found that these activities have a very limited effect on long-term sales. Moe, Schweidel and Trusov write: “[…]products that receive an uncharacteristically positive (or negative) rating may see a short-term boost in subsequent ratings and sales. But unless these artificial ratings are continuously posted, posted opinions and product sales very quickly return to their baseline value. This is especially the case when diverse opinions encourage lively discussion.” So…. what are the lesssons here?
Lessons for Managers Who are Listening to Social Media
1. Don’t forget about the silent majority. Many forums are dominated by a small, hardcore group of individuals who may not be representative of the broader customer base that has chosen to remain silent.
2. Social dynamics in the forum can influence who posts and who remains silent. In the face of conflicting opinions, less involved and more positive customers increasingly remain silent, letting the more critical customers steer the ratings environment.
3. Don’t overreact to negative feedback. Negative reviews don’t necessarily mean that your brand or product is uniformly disliked. More favorable customers may have chosen to remain silent rather than contradict the harsh criticism expressed by previous posters. Trying to appease your dissatisfied customers may be quite costly â€” and not necessarily worth it.
4. Ignore the white noise. It is important to differentiate between the white noise and the meaningful insights. Many trends and dynamics observed in online opinions are simply a result of â€œhealthyâ€ dynamics. A careful statistical analysis of ratings dynamics can help identify when a marketer should address an issue raised by a negative comment or modify a product in response to criticism.
Lessons for Social Media Strategists
1. Be prepared to act. Monitoring the conversations taking place online can be very beneficial for a social media strategist who knows how to interpret what he or she hears and is prepared to act on it. While product managers have been known to modify their product strategy in light of what they hear online, social media strategists can also respond to the online chatter by managing the social media environment in such a way that healthy social dynamics are fostered.
2. Encourage the less involved to post. Less involved customers tend to be more favorable, while more involved customers tend to be more critical. If you’re trying to foster a positive tone, incentives for posting reviews should be provided to the more casual customers.
3. Don’t be afraid of disagreements. While disagreement among opinions tends to attract more negative posters, it also fosters more discussion. This insulates product sales from a few uncharacteristically negative opinions.
4. Resist the temptation to try to manipulate opinions with artificially positive reviews. An online opinion forum tends to take on a life of its own. While the temptation is high to strategically manipulate expressed opinions, the benefits in terms of product sales are limited â€” not to mention the steep downsides associated with the legal ramifications and the potential for negative publicity.
Wendy W. Moe is associate professor of marketing at the Robert H. Smith School of Business at the University of Maryland in College Park, Maryland. David A. Schweidel is assistant professor of marketing at the Wisconsin School of Business at the University of Wisconsin-Madison in Madison, Wisconsin. Michael Trusov is assistant professor of marketing at the Robert H. Smith School of Business at the University of Maryland in College Park, Maryland.