Simonkucher : The Rating Economy - Consumer Survey
The availability of ratings comes as an additional factor in the complex equation of consumer behavior. As people have more knowledge and transparency about how a product is perceived by fellow consumers, they become more independent from the marketing promises of the providers of these products. They gain more power to take purchasing decisions according to their needs. Consequently, ratings erode loyalty to brands.
Ratings change purchasing behavior
Consumer ratings are seen as third most important factor in purchasing decisions, after product features and price – but before the brand. The relatively new rating trend is on the rise, while brand seems to lose importance. If this continues in the future, many companies will have to rethink their traditional marketing strategies. Expert reviews, by the way, are far behind when it comes to influencing purchasing decisions. Consumers seem to trust their peers more than any independent experts.
Ranking of most important factors when making a purchase (overall)
Being able to directly compare products between different providers is making customers more likely to switch brands. One in three participants stated that they had switched to a different brand due to the product having a better rating. This makes positively rated products all the more valuable for any company, and should motivate providers to continually improve the quality of their products. While we see big variations across countries when it comes to switching brands due to ratings, these again can be traced back mostly to age and residence of the respondents: The younger urban population is less attached to certain brands and more influenced by the ratings of other people.
Change in brand due to ratings
As before, ratings are most important in consumer electronics and travel & hospitality. Here, switching brands based on ratings happens much more often than in any of the other industries.
Change in brand due to ratings
Ratings change spending behavior
Ratings not only change which products consumer buy, but also how much they spend. 20% report they would buy more when products are rated highly, 15% would select more expensive products. 19% said they are even prepared to pay more for products with high ratings. Companies with highly rated products benefit from this: There is a significant profit potential due to not only being able to sell more, but also at higher prices. All the more motivation for companies to provide high quality products – which is again good news for the consumer.
Change in behavior due to ratings (global view)
Do ratings change companies’ behavior?
A good third of consumers think that companies have changed to the better thanks to ratings. They believe that companies are reacting to the feedback they get from the consumer ratings as well as that their product or service quality has improved. And they feel that companies are no longer getting away with offering products with low quality. The value transparency consumers get from all those ratings thus has a lot of ramifications. The customer not only takes a better informed decision that allows to select the best fitting product, the “rating economy” also improves the standards of the marketplace overall.
Perceived changes due to consumer ratings