2019

PROGRESS REPORT

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The Ratings Race

The surprising effect of Amazon reviews

In a world in which millions of brands compete to sell similar items, product reviews can be a key decision making factor for consumers trying to decide which product to buy. Do you choose product A because it’s cheaper but has less favorable reviews? Or, do you buy the more expensive product B with hundreds of positive reviews?

And perhaps the most trusted and looked to source for product reviews is Amazon. So much so, in fact, that some organizations have started using the reviews and ratings as key performance indicators.

According to marketing research firm BloomReach, people trust Amazon reviews so much that they will look at product reviews on the online retailer’s site even if they’re going to buy the product somewhere else.1

Author Anna-Katrina Shedletsky said the need for positive reviews can have detrimental effects.

“Amazon reviews are such a strong driver of sales (even for brick and mortar store sales), that a few bad reviews soon after a product ships can have real drag on the sales and resultant revenue for a new product,” Shedletsky said.2

According to Shedletsky, manufacturers are still adjusting to this new reality. “Whereas five years ago, they were able to focus on interacting with unhappy customers who left reviews on their own websites, now they mine the information left by customers on Amazon for clues,” said Shedletsky.3

As part of her research, Shedletsky interviewed several industry leaders about this new metric, one of whom was the vice president of operations at a major cell phone manufacturer. He said: “If you have consistent issues across the reviews, and the company doesn’t respond, this becomes a critical problem for customers … You can use Amazon reviews to quantify how bad quality affects your sales.”4

Despite this news coming to the forefront only recently, a 2006 research paper revealed the same information. Researchers Judith Chevalier and Dina Mayzlin studied the effect of Amazon book reviews on a book’s sales. “An increase in the average star rating on Amazon.com over time results in higher relative sales of the book on Amazon.com over time (one month after the reviews under consideration have been posted),” the researchers wrote.5

The researchers’ findings also revealed that one-star reviews are the most impactful. A Dimensional Research survey backed up that finding: 86% of respondents said that their decision to buy is affected by negative reviews.6

Credibility

Another factor working against manufacturers selling on Amazon is the vast number of positive reviews. BestReviews, a product review site, analyzed 360,000 ratings for 488 products and found an overwhelming number of five-star reviews—66.3%, to be exact.7

But just how credible are those reviews? If its reviews and ratings have such a significant impact on product sales, consumers obviously put a lot of stock in them.

Matt Moog of Power Reviews, which makes ratings and review software, said that just one positive comment on a product increases its purchase rate by 65%. He also said that one-third of people admit they won’t buy a product if it hasn’t been positively reviewed.8

As Chevalier and Mayzlin’s research shows, however, when new products are first released on Amazon, they don’t have any reviews or ratings yet.

“This creates a chicken-and egg-problem for Amazon and the product’s manufacturers,” the study said. “Users will generally not buy a product when it doesn’t have reviews, and if users aren’t buying the product, there are no reviews being written.”9

To address the issue, manufacturers provide their products to reviewers for free or at a discounted price. Amazon allowed the incentivized reviews as long as the reviewers disclosed that they received compensation in exchange for their comments and ratings.

However, some products were receiving suspiciously high numbers of five-star reviews just days—or even hours—after they were listed for sale on Amazon.10

Amazon attempted to tackle the issue by banning incentivized reviews in 2016, but sellers adapted. Now, they’re culling favorable reviews by reaching out to people via Facebook.11 A simple search for “Amazon Reviews” on Facebook reveals a lengthy list of groups dedicated to incentivized reviews.

Pressure on manufacturers

According to Tommy Noonan of ReviewMeta, all of this spells failure for reputable sellers.

“These days, it is very hard to sell anything on Amazon if you play fairly,” said Noonan. “If you want your product to be competitive, you have to somehow manufacture reviews.”12

Fraudulently rated products shoot to the forefront of Amazon searches, pushing reputable sellers’ products to the bottom of the list. And if a product has negative reviews, consumers will likely pass over it altogether.

In today’s world of one-click buying and instant gratification, this puts tremendous pressure on manufacturers to create the best quality product the first time, leaving very little margin for error.

—compiled by Lindsay Dal Porto, assistant editor

REFERENCES

  1. Nick Vega, “Here’s Why User Reviews on Sites Like Amazon Are Such a Big Deal,” Business Insider, March 20, 2017, https://tinyurl.com/y8xj6aam.
  2. Anna-Katrina Shedletsky, “The New Manufacturing KPI That No One Is Talking About: Amazon Reviews,” Forbes, Aug. 28, 2018, https://tinyurl.com/ycvzn4jx.
  3. Ibid.
  4. Ibid.
  5. Tom Jacobs, “Do Reviews on Amazon Matter?” Pacific Standard, April 13, 2015, https://tinyurl.com/y9jcanq8.
  6. Savio Fernandes, “Impact of Reviews and Ratings for Sellers on Amazon,” Orderhive, Oct. 29, 2015, https://tinyurl.com/ybpnkqx2.
  7. Kriti Agarwal and Rafe Needleman, “Can You Trust Reviews on Amazon?” BestReviews, https://tinyurl.com/yccw57at.
  8. Elizabeth Weise, “That Review You Wrote on Amazon? Priceless,” USA Today, March 20, 2017, https://tinyurl.com/yaufpo2y.
  9. Agarwal, “Can You Trust Reviews on Amazon?” see reference 7.
  10. Emma Woollacott, “Amazon's Fake Review Problem Is Now Worse Than Ever, Study Suggests,” Forbes, Sep. 9, 2017, https://tinyurl.com/ychdykft.
  11. Richard Meldner, “Fake Reviews Still a Problem on Amazon Despite Ban on Paid Reviews,” eSellerCafe, May 19, 2018, https://tinyurl.com/ybv2wolz.
  12. Elizabeth Dwoskin and Craig Timberg, “How Merchants Use Facebook to Flood Amazon With Fake Reviews,” Washington Post, April 23, 2018, https://tinyurl.com/y9th2dy4.

AUTOMOTIVE

Will Tariffs Hurt Customer Satisfaction With Cars?

Customer satisfaction with cars went up this year, but some fear that proposed tariffs could put a dent in this gain.

According to American Customer Satisfaction Index’s (ACSI) Automobile report, customer satisfaction with autos and light vehicles increased 1.2% to a score of 82 on the ACSI scale of 0 to 100. An ASCI official warned that proposed tariffs by the Trump Administration could do some harm.

“Proposed tariffs on auto imports add to the pressure of rising metal costs for both international automakers and American-made cars using foreign parts,” said David VanAmburg, managing director at ACSI. “We’ll be watching how the threat of higher prices affects customer satisfaction in the coming year.”

Subaru, Toyota and Honda topped the list of high customer satisfaction scores.

For more results, visit https://tinyurl.com/customer-sat-cars.


ASQ

Quality 4.0 Summit Nears

The second annual ASQ Quality 4.0 Summit on Disruption, Innovation and Change will be held Nov. 12-13 in Dallas.

The conference features presentations, demonstrations and discussions led by technology experts, industry leaders and quality professionals. The four focus areas of the summit include:

  1. Industry 4.0—Learn about the new forces of change in organizations, markets and the future of work.
  2. Digital transformation—Examine methods, models and frameworks organizations can use to successfully navigate today’s digital transformation.
  3. Managing change—Position your organization for change, implement needed changes and address the fast pace of change.
  4. The future of quality—Uncover opportunities for quality professionals to lead innovation and to embrace disruptive technology’s impact on the quality function and profession.

For more information and updates on conference events, as well as announcements on keynote speakers, visit asq.org/conferences/quality-4-0.


QUALITY HEADLINES

Quality-Related News From Around the World

—powered by Lexis Nexis

Is That Really Tuna? Study Suggests 44% of Canadian Seafood Mislabeled

Almost half of the seafood sold in Canada is mislabeled, according to a new study. The Oceana Canada study, released this week, looked at 400 seafood samples throughout Vancouver, Victoria, Toronto, Halifax and Ottawa, and found that 44% wasn't what it appeared to be, and it was nearly impossible to track from origin to plate. For more, visit: https://tinyurl.com/ycassckt.

It’s Cool to Be a Manufacturing Engineer Major Again

The number of individuals earning degrees in engineering has increased steadily over the past decade, and those numbers will only continue to grow. In particular, one subdiscipline of engineering is looking ever more appealing to students: manufacturing engineering, which focuses on improving the production of an item. Read the full story here: https://tinyurl.com/y7zj5gcu.

10 Things Customer Success Leaders Do for Their Clients

Customer service means customer success, and as the field grows, more leadership roles open up. Customer success leaders need strong visionary and management skills, but leadership encompasses many vital components to serving clients. There are 10 things customer service leaders do for their clients. Read more: https://tinyurl.com/ycep2769.

To get a roundup of the week’s most noteworthy stories delivered to your inbox every Friday, subscribe to the QNT Weekly e-newsletter at asq.org/newsletters.


ISO

New Guidelines Help In Hiring Process

New guidelines from the International Organization for Standardization (ISO) can help organizations determine how well they recruit new employees.

ISO/TS 30411:2018—Human resource management—Quality of hire metric includes a range of options to measure the quality of a hire, which can be aligned to various business and organizational conditions. The document also includes international best practices.

For more on the guidelines, visit www.iso.org/standard/68220.html.


Getting to know…

John Karlin

Current position: Clinical RN and team leader of the therapeutic hypothermia team in the neonatal intensive care unit (NICU) at Children’s Hospital at Oklahoma State University.

Education: Bachelor’s degree in nursing from Oklahoma Panhandle State University in Goodwell.

What was your introduction to quality? It started with my internal questioning, “Why do we keep doing things the same way without trying to improve anything?” Frustrated, I thought there must be some education or training on how to do things better, which led me to lean and Six Sigma, and ultimately, ASQ.

Previous note­worthy jobs? I worked as an ammunition specialist for the U.S. Army. It was a job many are capable of doing but few will do. This was my introduction to supply chain, lot numbers and hazardous materials handling. I quickly learned that bullets don’t fly without supply!

What’s the best career advice you’ve ever received? Be relentlessly persistent. Don’t let any rejections, defeats, failures or discouragements ever deter you from your pursuits. We all face obstacles in life. Some of these obstacles are giants, which we think we may not overcome. When a giant or a jötunn stares you in the face and threatens to take you down, stare back and smile, improvise, adapt and overcome.

Do you have a mentor who makes a difference in your career? Susan Bedwell, who holds a doctorate of nursing practice, is an advance practice registered nurse and the clinical nurse specialist for our NICU. She has always provided me direction, resources, recommendations, opportunities and encouragement. I don’t think I would be where I am now without her.

Any recent honors or awards? Recently, I received the Academy of Neonatal Nursing’s Excellence in Neonatal Nursing Practice Award.

Personal: Wife Carol and two sons, Antonius and Michelozzo.

What are your favorite ways to relax? To just be still and quiet. I’m constantly going somewhere or doing something. To be motionless in absolute silence, even if just for a moment, is golden. A glass of wine helps, too.

Are you active in ASQ? I currently serve as chair of the Oklahoma City Section.

Have you had anything published? A handful of articles, but most recently, “How to Apply 5S: The Frightening Fridge at Work,” which appeared on the website goleansixsigma.com in August 2016.

What was the last movie you saw? “Thor” about seven years ago.

Quality quote: Many see the world through the lenses of welfare and entitlement. I see the world through the lenses of opportunity and potential.


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