Despite the recent attempt by Trip Advisor to introduce quantitative rating, the companies chosen represent the third type of ratings with the combination of both methods quantitative and qualitative ratings, which are more useful both for customers and businesses.
Wider audience -> more information -> sales
The most obvious benefit of online rating systems is the ability to get wider audience, which in turn can be more influential for analysis and decision-making for both customers and businesses. This is common for the websites such as Trip Advisor that has more than 60 million users in just one month, and Amazon that has 282 million users. For the Premier Inn, which outsources featured content from Trip Advisor the advantage of big audience is also present.
Another benefit of rating systems is to influence sales with a big audience. For example, studies by Chevalier, J. and Mayzlin D. have shown that product reviews affect book sales at Amazon.com and moreover there is evidence that consumer opinions had more impact than a company’s marketing information on purchase decisions.
However, if the website offers reviews option this does not mean that the number of customers that would be attracted will increase, since the quality of reviews, the reasons behind each review the knowledge of people who write them varies considerably. Therefore, in order to make consumers buy the product or service the review has to be helpful and persuasive to buy.
Trust -> helpfulness -> usefulness
This leads to a problem, which can be described as information bias or trust issue. Since the reviews made in order to persuade people to buy something could not be honest and trusted and therefore cannot revile the true quality of a product and moreover may depress sales. Once customers started to involve themselves in such practises as writing reviews and comments for the products and moreover since the decision to purchase particular product is influenced by them, many companies started to use this a driving force for influencing people’s decisions by using opinion spams, which are against the policies of chosen websites and are prohibited by European Law.
Amazon is the example of a company that appeared in negative way in news for its reviews quite often. For example, in 2004 when the identities of thousands of reviews were reviled, it appeared that many of them were written by authors of their own books or by authors of competing books. The solution was to restrict reviews only to the registered users. However, this did not solve the problem, since the use of pen names still takes place. Moreover, the study from Cornwall University showed that 78% of the reviews written for amazon products received a free product from amazon and 40 % of people who leave a review are writers themselves. So does this mean the reviews are helpless for other people? I personally think they are useful and helpful. First of all people who get free products from amazon to review the product through the programme called Amazon Vine, might give a helpful and useful review which might not necessarily be positive but which might show the true, unbiased opinion from a trusted reviewer. Amazon is one of the largest and successful companies generating lots of reviews for the products and many people do find them helpful when it comes to make a decision. Although there are a number of bad practises shown in news, people still find reviews on amazon quite influential and useful, providing the top amazon reviewers are trusted by many customers.
Trip Advisor according to Advertising Standards Authority can no longer claim all its reviews are “honest”, “real” or “trusted”. The company like amazon was represented in the news in a negative way, which should undermine the site’s reputation. On the other hand the site is very successful and attract lots of customers. Moreover, most of the people who read online reviews do understand the presence of information bias. With the number of users increasing as well the number of partnerships which are based on representation of featured information from Trip Advisor on others websites, shows that the use of reviews is useful and helpful tool not only for customers to decide where to go and how to plan their holidays but also for businesses to increase their popularity and revenues as well as to improve their businesses. For example, by signing to the Trip Advisor management centre the company gives opportunity to increase business popularity rating on the website by getting more reviews. There are number of filtering measures undertaken by Trip Advisor, and if the businesses do not agree with the review they can ask for investigation. Moreover, businesses have an option to write their side of the story, which proves to be helpful for many travellers, since seeing the manager’s response to the bad review makes them more comfortable with making decisions. Ingrid Jeacle and Chris Carter call the site as the digital manifestation of broader and historically grounded sensibilities: it fulfils the criteria for certainty, controllability and order, where they make conclusion that Trip Advisor seems posed to produce rationality and truth. Moreover, Trip Adviser does not present only positive reviews; it presents both sides to the user and has the rating system of trusted reviewers like amazon.
Premier Inn rating system on it own based on customer surveys and the rating can be done trough direct communication via email. This is not useful for customer since the customer can se only the overall stars rating which as already mentioned at the beginning is not useful on it own. However, the company is exposed to a large audience of Trip Advisor by featuring content from it which gives the customer impression of being more honest since the information is presented by the third party is believed to be less likely to be tempted with by the brand. Premier Inn does not have the control over the reviews posted from Trip Advisor and therefore even though this is a benefit to consumers, the company might be at disadvantage of having the large number of negative reviews posted on its own website. But this does not seems to be the case for Primer Inn, which has advantage of customers staying on their website and increasing website’s traffic. Customers no longer have to search for external reviews that might seem to be more honest than those provided on the website and are able to make more comfortable decisions.
Conclusion
Overall, after looking at three examples of rating systems, although the issues of trust due to spam opinions and reviews undermine the usefulness of rating systems, it can be concluded that advantages of the online rating systems outweigh the disadvantages. With the number of people using reviews increasing the usefulness of the rating systems is increasing as well. Moreover, with new measures and researches undertaking for developing filters for spam opinions all the time customers are able to make more informed and comfortable decisions and businesses are able to improve their quality and popularity of their products and services by using powerful tools of word of mouth online.
References
Journal articles
- Ann E. Schlosser (2011): Can including pros and cons increase the helpfulness and persuasiveness of online reviews? The interactive effects of ratings and arguments, Journal of Consumer Psychology 21: 226-239
- Beverley A. Sparks, Victoria Browning (2011): The impact of online reviews on hotel booking intentions and perception of trust, Tourism Management, 32: 1310-1323
- Hee “Andy” Lee, Rob Law & Jemie Murphy (2011): Helpful Reviewers in TripAdvisor, an Online Travel Community, Journal of Travel and Tourism Marketing, 28:7, 675-688
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Hu, N., Pavlou, P. A., & Zhang (2006): Can online reviews reveal a product’s true quality? Empirical findings and analytical modeling of online word-of-mouth communication, 7th Conference on Electronic Commerce, 324-330
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Ingrid Jeacle, Chris Carter (2011) : In TripAdvisor we trust: Rankings, calculative regimes and abstract systems, Accounting, Organisations and Society 36, 293-309
- John Gerdes Jr., Betsy Bender Stringam, Robert G. Brookshire(2008) An integrative approach to assess qualitative and quantitative consumer feedback, Electronic Commerce Research, 8: 217-238
- Judith A. Chevalier and Dina Mayzlin (2006): The Effect of Word of Mouth on Sales: Online Book Reviews, Journal of Marketing Research, 43:3, 345-354
- Mehmet Ekmekci (2011): Sustainable reputations with rating systems, Journal of Economic Theory, 146: 479-503
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Myle Ott ,Yejin Choi Claire Cardie, Jeffrey T. Hancock (2011) : Finding Deceptive Opinion Spam by Any Stretch of the Imagination, 49th Association for Computational Linguistics, 309-319
- Nan Hu, Indranil Bose, Noi Sian Koh, Ling Liu (2012): Manipulation of Online reviews: An analysis of ratings, readability, and sentiments, Decision Support Systems, 52: 674-684
- Nan Hu, Ling Liu, Vallabh Sambamurthy (2011): Fraud detection in online consumer reviews, Decision Support Systems 50: 614-626
- Qianq Ye, Rob Law, Wei Chen (2010): The influence of user-generated content on traveller behaviour: An empirical investigation on the effects of e-word-of-mouth to hotel bookings, Computers in Human Behaviour 27: 634-639
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Susan M Mudambi, David Schuff (2010): What makes a helpful online review? A study of customer reviews on amazon.com, Quarterly & The Society for Information Management, 34:1,185-200
- Trevor Pinch and Filip Kesler (2011) How Aunt Ammy Gets Her Free Lunch: A Study of the Top- Thousand Customer Reviewers at Amazon.com. Department of Science and Technology Studies, Cornell University, 1-90
- Wenjing Duan, Bin Gu, Andrew B. Whinston (2008) Do online reviews matter? - An empirical investigation of panel data, Decision Support Systems 45: 1007-1016
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Nan Hu, Paul A. Pavlou, Jennifer Zhang, 2006
comScore Media Metrix for TripAdvisor Sites, Worldwide, July 2010
Bickart, B., & Schindler, R.M., 2001
Myle Ott, Claire Cardie, Jeffrey T.Hancock, 2011
http://www.dailymail.co.uk/news/article-1393412/Amazon-TripAdvisor-centre-scandal-companies-post-fake-reviews.html?ito=feeds-newsxml
Richard Lea and Matthew Taylor, 2010
Trevor Pinch and Filip Kesler, 2011