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So, it turns out that your friends really do care what you think when it comes to their purchasing habits.
A recent study measured the monetary value of online recommendations and found that shared online content (recommendations on Facebook, for example) has heavy influence over consumer purchases. In fact, the study revealed that a referral shared through social media carried more clout than the price or brand of a product!
To go even further, an online recommendation weighs just as heavily as an in-person recommendation when it came time to purchase.
The study surveyed more than 6,000 consumers buying across a range of industries, and some of the key findings are worth noting:
- Shared reviews or recommendations over a social network increased the desirability of a product by 9.5%.
- A favorable recommendation was more important to consumers than both price and brand combined, with a relative importance of 57% compared to an average 22% for brand and price. That’s huge!
- A positive recommendation can actually motivate a consumer to pay up to 8.8% more for a product. This means positively shared reviews can enable manufacturers and retailers to charge more for their goods.
- On the flip side, the study found that negative reviews deterred consumers from purchasing on an average of 11%.
- Surprisingly, an online share essentially carries the same value as in-person recommendation, and outperforms both consumer ratings and reviews.
The study is fantastic news for product marketers who are considering social media campaigns. With online content outreach growing exponentially, it’s important to keep up with how valuable consumer opinion really is — as the adage says, the customer is king. Their happiness matters now more than ever, and it’s up to you to incentivize buyers to share their thoughts with their friends.
Historically, it’s good to know that word-of-mouth is still a reliable method of growing your business — it’s just been adapted to fit with the times.