Total amount of credit £80, duration of the agreement 29 days, rate of interest 292% per annum (fixed), total amount payable (in one repayment) £98.56. Representative 1281.8% APR.
The ever-increasing popularity of consumer review sites has prompted payday lender 247Moneybox.com to research the link between online reviews and a customer's decision to take out an online loan.
Online reviews are a global phenomenon that all internet users will regularly come upon in their day-to-day online activity. The dynamic has changed in recent years, with consumers - as opposed to experts - leading the drive to help inform and influence buying decisions for other consumers.
One should note that these reviews tend to cover the full spectrum of consumer products, from electronics to toiletries and even financial products. Most would agree this power shift from expert to consumer, a digital manifestation of "word of mouth", is a welcome one and many research studies have sought to establish how exactly this influence on consumer decisions is created.
Ratings also play a key part in this and are tracked by a multitude of different platforms, including websites and apps that monitor consumer satisfaction levels, as well as various social media channels that enable consumers to offer their feedback.
Does it make a difference to consumer purchasing habits if a product has positive or negative feedback/ratings? The results from studies on this varies. One study proposes that users on auctioning sites were not influenced by negative feedback. It concludes that more and better feedback influenced increased sales and better profit margins.
However, this isn't always relevant. On some marketplace-style sites or purchasing platforms consumers will be aware of the negative feedback and tend to ignore it as they are fully aware of the issue with the said product by the time they get to the point of purchase. Some of the highest selling products on these sites tend to have a large number of bad reviews or ratings. This can also be quite relevant in the case of financial products or loans, where consumers are already familiar with the nature of the products and any customer feedback but still require credit regardless.
Regardless of the type of product, negative online ratings and reviews are almost always unavoidable. More often than not, these will ultimately inform the customer's final decision, as they tend to evaluate any available information on the said product. However, it should be noted that products with purely positive feedback are treated with suspicion by consumers too.
A recent study evaluated the buying habits of 400 stores on an Asian website. It concluded that although positive ratings and reviews were critical in informing purchasing decisions, there were other factors that supported positive sales figures, such as well written product descriptions and reviews that included images or other forms of multimedia. Interestingly, these were more significant in influencing consumers than negative or reasonable ratings.
Thus, products that are well marketed with readily available multimedia reviews, such as videos highlighting how best to use the product or demonstrating its features, enhance the consumer experience and support an increase in sales figures. This, in conjunction with positive feedback and reviews, improves a product's chance of being purchased more consistently.
Consumers now also regularly evaluate how credible certain website are as part of their decision-making process. The most highly regarded reviews are typically those listed on a well-known website. Further preference is given to more recently produced reviews that have supplementary customer endorsements and video descriptions or usage guides. This has become evident to sales companies who ensure they are providing as much as information as possible to improve consumer engagement. The more they do so, the higher the credibility of their sites and products.
There are four key aspects that can help increase sales in relation to consumer review websites: how new the reviews are; whether there are regular themes across the reviews; the credibility and popularity of the website and the amount of supplementary information on the product in varied multimedia formats.
Most consumers are happy to leave reviews or ratings on products, but there is also a certain sense of expectation from consumers that they will be exposed to more granular and comprehensive information that has been uploaded recently. Older reviews can be an indication that a product is not selling well or a reason it isn't, so companies are encouraged to update these sites or information available on other review sites regularly.
Recent research and surveys show that 90% of online shoppers consult reviews before making a final purchasing decision. This also includes feedback and ratings through social media platforms, which cannot be ignored. This has revolutionised marketing strategies across all sectors, and it is no surprise that online and digital sales increase year on year. Those products that collect the most reviews will have more sales, which in turn will increase the likelihood that they will receive more positive reviews. This feeds a continuous sales support cycle that ensures consumers and companies are purchasing/selling based on the quality of the product and consumer experience.