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Selling to Millennia's with online reviews

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DOI: 10.1016/j.bushor.2011.11.001

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Mangold, W.G. and K.T. Smith. 2011. Selling to Millennials With Online Reviews.
BusinessHorizons, Vol. 55, No. 2 (March-April): 141-153.

Selling to Millennials with Online Reviews

Dr. W. Glynn Mangold

Professor of Marketing
Department of Management, Marketing & Business Administration
Murray State University
451 Business Building South
Murray, Kentucky 42071
Tel: 270-809-6198
Email: glynn.mangold@murraystate.edu

and

Dr. Katherine Taken Smith

Assistant Professor of Marketing
Department of Management, Marketing & Business Administration
Murray State University
451 Business Building South
Murray, Kentucky 42071
Tel: 979-220-8751
Email: dr.kathy.smith@gmail.com
 Selling to Millennials with Online Reviews

Abstract

Millennials have heavily influenced social media’s evolution into an important source of

product information. They are increasingly basing their product evaluations on information

gathered from online reviews. Thus, companies targeting Millennials may wish to pay heed to

online reviews. Which products are affected by Millennials’ online reviews? Do the reviews tend

to be positive or negative? Where do Millennial customers look for information amongst the

plethora of online venues?

A survey of 227 Millennials reveals that this generation is undeniably posting reviews

online and being influenced by these reviews. Respondents show a definite preference for two

online venues, Facebook and company websites, when voicing their opinions. Reviews are

broken down by positive and negative comments and how product categories fare for each type.

Contrary to popular thinking, the respondents were more prone to post positive reviews than

negative reviews. Males voice their opinions online significantly more often than females, and

specific gender differences are observed by product category. Recommendations are provided for

selling to Millennials by leveraging online reviews.

Key Terms: Facebook, Marketing, Online reviews, Word of mouth, Social media, Millennials,

Gender differences

2
1. Millennials: The online generation.

Millennials, also called Generation Y, are a vital component in the evolution of social

media becoming a source of product information. Having grown up socializing and making

purchases online, this generation’s savvy usage of social media will continue to grow along with

their discretionary income. Computers and mobile devices are commonplace tools for

Millennials; you might even call them essential. Ninety-seven percent of Millennials in the U.S.

own a computer and 94 percent own a cell phone. Thirty-four percent of Millennials use websites

as their primary source of news (Marketing Breakthroughs Inc., 2008).

Evidence shows that Millennials often look to peers for purchase-related information and

this information seeking behavior is facilitated by their digital connectedness (iPerceptions,

2006). In fact, Millennials access digital media on a daily basis and have the ability to

communicate and purchase from a supplier anywhere in the world. Due to their familiarity and

usage of digital media, they are a driving force of online communications. The Internet, social

media, and inter-active technologies are empowering Millennials to be more active in the

promotion and advancement of products and brands. Millennials often look to peers to determine

the merit of a website or a product. A study of over 7,000 Internet users in France revealed that

online reviews of video games positively influenced consumer’s purchasing decisions. In fact,

the effect of the online reviews was as strong as the effects of personal and expert reviews

(Bounie, Bourreau, Gensollen, & Waelbroeck, 2008). Being highly connected to friends and

information sources, this generation is looking online for product recommendations. They can

participate in information processing at any time, anywhere, and through multiple venues.

According to a survey by eMarketer (December 2010), Millennials are talking about

products and services online more than the general population. Fifty-six percent of Millennials

3
talk about products and services using social networking communities, as compared to 35% of

the general population. Social networking sites were found to be their most popular online venue

for product discussions. Some researchers have found young people more likely to be market

mavens (Wiedmann, Walsch, & Mitchell, 2001; Williams & Slama, 1995). Market mavens are

consumers with general product knowledge who act as disseminators of product information and

are eager to share their expertise and opinions with other consumers (Goldsmith, Clark, &

Goldsmith, 2006; Walsh, Gwinner, & Swanson, 2004). In reaching Millennials, marketers could

be reaching numerous market mavens.

Marketers are rethinking their strategies targeted at Millennials. The brands that were

popular with their parents are being rejected by this generation. Having grown up in an even

more media-saturated, brand-conscious world than their parents, they respond to ads differently.

According to Gerzema and D’Antonio (2011), Millennials lead the movement of consumers who

are shifting their spending behavior in order to support companies whose values match their

own. Brands must champion the values of this generation in order to earn the right to have them

as customers. Rather than the customer joining the brand’s world, the brand must join the

customer’s world.

The birth year range for Millennials varies, but a commonly used span is between 1981

and 1994. There are approximately 50 million Millennials in the United States (Jayson, 2010).

The Millennials are the biggest generational group since the baby boomers. Their hefty size and

buying power are making them attractive targets for many consumer industries. Tapscott (1998)

asserts that the Internet has affected the Millennial generation in various ways. He imparts the

following characteristics to Millennials: investigative, freely expressive, and the need to

authenticate. Alsch (2000) attributes Millennials with the need to control their environment.

4
Again, the Internet had a part in fostering this sense of control. The Internet allows Millennials to

exert control over the free market by expressing their opinions through a multitude of online

venues that have the potential to influence consumers and marketers.

Millennials are, indeed, an important market for many products and services. The

purchase related communication behaviors they have established at this relatively early point in

their lives can be expected to provide a foundation for their future consumption patterns. Their

use of online reviews is central to these communication behaviors and would appear to be

closely aligned with their actual product purchases. Therefore, the purpose of this study was to

gain a deeper understanding of Millennials’ purchase related communication behavior as it

pertains to online reviews. We examine whether Millennials are influenced by online reviews,

and which online venues they are most often using to voice their opinions. The topic of positive

versus negative reviews is also explored. Specifically, we examine which product categories are

receiving the most positive and negative reviews along with gender differences in the posting of

reviews. Specific recommendations are provided for selling to Millennials by leveraging online

reviews.

2. How important are online reviews in the consumption process?

Online reviews are a type of product information created by users based on personal

usage experience (Yubo & Jinhong, 2008). In essence, online reviews are word of mouth via the

Internet. Product reviews voiced by consumers online are an emerging market phenomenon that

is becoming a vital component in peoples’ purchasing decisions. It is commonly accepted that

word-of-mouth communication can have a substantial influence on product choice (Walsh et al.,

2004). Word of mouth (WOM) is seen as more credible than advertising as it is perceived as

5
having passed through the evaluation of “people like me” (Allsop, Bassett, & Hoskins, 2007).

According to Keller (2007), WOM has become the most influential communication channel.

Product reviews occur every day, both online and offline, when people provide

recommendations regarding the products and services they consume. Social media venues such

as Facebook, YouTube, Twitter, and various blogs are common outlets for product

recommendations. Companies, such as Amazon.com, often use their websites to provide venues

through which customers can review the products they have purchased. There are other sites

specifically dedicated to customer ratings and reviews. These include Epinions, TripAdvisor,

Yelp!, and Zagat. Reviews are also an important component of search engine related sites such

as Google Maps, Bing Local, and Yahoo! Local. The bottom line for consumers is that product

reviews are plentiful and easily obtained. Consumers can readily access second and third

opinions before making a purchase on almost anything.

The creation and exchange of user-generated content is facilitated through social media.

Social media and virtual communities provide platforms for people to tell the world how they

feel about a product or company and this viral WOM represents one of the fastest growing

phenomena on the Internet (Armstrong & Hagel, 1996). Social media has the potential to

influence various aspects of the consumption process including awareness, information

acquisition, attitudes, decision-making, and post-purchase evaluation (Mangold & Faulds, 2009).

Indeed, customers’ “willingness to participate” in online communications is becoming critical to

promotional success (Parent, Plangger, & Bal, 2011). The implication of this for marketers is that

social media should be part of their marketing mix. Social media is a tool for giving and

receiving information as well as impacting the decision making process.

6
 Consumers are using reviews through social media and other venues to conduct

information searches that will help make their purchasing decisions easier (Lempert, 2006;

Vollmer & Precourt, 2008). Reviews can help consumers construct a set of criteria for evaluating

a product and reduce their cognitive costs of making a purchase decision (Liu, Karahanna, &

Watson, 2011). “If presented properly, [online product reviews] can help consumers (1) form an

unbiased understanding of a product, (2) construct a set of criteria for evaluating a product, (3)

make an accurate choice, and (4) reduce the cognitive costs of making such a choice” (Liu et al.,

2011, p. 239).

Early research shows that decision makers seek recommendations for the purpose of

reducing the uncertainty and amount of information that must be processed to make a decision

(Olshavky & Granbois, 1979). A Nielsen Global Online Consumer Survey reveals that 70% of

consumers online trust reviews written by people they don’t personally know (NeilsenWire,

2009). Several studies have shown that people consider the opinions of peers and other

consumers to be more credible than company sources of product information (Foux, 2006;

Gremler, Gwinner, & Brown, 2001; Sheth, 1999; Tax, Chandrashekaran, & Christiansen, 1993).

The quantity of online reviews is often used as an indication of product popularity because it is

considered to represent the market performance of the product (Chevalier & Mayzlin, 2006). In

effect, consumers are banding together in order to process the plethora of information available

today. This reliance on fellow consumers is an influential part of the communication process

occurring in the marketplace.

These new venues of communication are giving the consumer more muscle in the

exchange process. Not only do consumers have more access to product and company

information, but they also have the ability to share and control the flow of information (Fournier

7
& Avery, 2011). This shift in control is significantly influencing the way consumers receive and

react to market information (Singh, Veron-Jackson, & Cullinane, 2008). Product information is

now originating in the marketplace, based on the experiences of consumers. This “groundswell”

(Li & Bernhoff, 2008) is conferring more power to the consumer and impacting the consumption

process. Consumers have the ability to redefine companies to their standards by purchasing from

those who share their values. Consumers are rewarding companies who are more ethical, help

people, and help the planet. According to a study by Gerzema and D’Antonio (2011), people

don’t just feel empowered as individuals; they have also discovered that there is power in

numbers. Consequently, consumers are joining together in order to influence the way companies

operate.

Out of necessity, marketers are finding ways to incorporate social media into their

marketing strategies (Li & Bernoff, 2008). Online reviews are exerting an increasingly powerful

influence on consumer choice and will continue to do so (Gerzema & D’Antonio, 2011; Godes et

al. 2005). Of the U.S. online population, 25% are reading consumer-generated reviews and this

number is sure to rise over the next decade (Li & Bernoff, 2008). According to the Facebook

Pressroom (2011), Facebook has more than 500 million active users and the average user has 130

friends and is connected to 80 community pages, groups and events. Users spend an average of

46 minutes per day on Facebook. Marketers must acknowledge the phenomenon of social media

because it is becoming “the de facto modus operandi for consumers who are disseminating

information on products and services” (Mangold & Faulds, 2009). This means that marketers

who are not involved in social media will be at a disadvantage in competing for the consumer’s

attention. Those companies that have a positive presence on review sites as well as other forms

of social media will benefit from the mere exposure effect, where consumers favor a product or

8
company to which they have been previously exposed. Consequently, when it is time to make a

purchase decision, consumers may recall being exposed to a particular brand and have a

preference towards it based on their exposure to reviews and other forms of social media.

Through online communication and networking, companies can become focal points for

the exchange of ideas, services, and solutions. Ideas can range from innovative products to new

ways to help the environment. Companies that are receptive to consumer comments and are

quick to give honest feedback can build strong relationships with customers. Gerzema and

D’Antonio (2011) attest that companies that work closely with the consumer will redefine the

requirements and standards of what constitutes a “public company.” Effectively, consumers can

have a voice in the design of products and the shopping experience and marketers can gain

insight into the needs and preferences of their customers. Ultimately, the outcome can be a more

rewarding exchange process for both parties.

3. Positive reviews versus negative reviews

Positive reviews have the potential to convert a consumer from “not buying” to “buying”

because the review helps reassure the consumer that the product or company is of good quality.

Uncertainty regarding the worth of the product or company has been reduced. Alternatively,

negative reviews can squelch a purchase. Positive versus negative reviews are especially

influential during the early stages of a product’s life when consumers know very little about it.

During the later stages of the life of a product, the influence of positive and negative reviews

lessens as consumers glean information from other sources (Hu, Liu, & Zhang, 2008). The

implication for marketers is to carefully monitor positive and negative reviews during the early

stage of a product when reviews may be a critical component in the consumer’s decision making.

9
 According to one study, pure-Internet retailers are more affected by negative reviews

while products from click-and-mortar stores are less susceptible to negative WOM. Consumers

tend to be more familiar with click-and-mortar stores; therefore, this increased familiarity causes

them to be less open to negative reviews. On the other hand, consumers will actively seek out

negative reviews if they are dealing with an unknown Internet retailer whose selling point is low

prices. In such a situation, the consumer is looking for value, but is also wary of encountering a

bad experience. Thus, firms that differentiate themselves through low prices are more susceptible

to negative WOM (Chatterjee, 2001).

Conventional wisdom suggests that a satisfied customer may tell some people about his

experience with a company, but a dissatisfied customer will tell everybody he meets. However,

there are several academic studies that support the opposite view: that positive reviews occur

more often. East, Hammond, and Wright, (2007) looked at fifteen studies and, in all cases, found

positive WOM to occur three times more frequently than negative WOM. They did follow-up

studies and confirmed their finding that positive WOM occurs approximately three times as often

as negative WOM. A study by Naylor and Kleiser (2000) found that fewer respondents spread

negative WOM than spread positive WOM. Other studies have concluded that there is more

positive WOM from satisfied customers than negative WOM from dissatisfied customers (Engel,

Kegerreis, & Blackwell, 1969; Holmes & Lett, 1977).

Some of online communications’ inherent characteristics may contribute to more positive

than negative WOM. In comparison to traditional WOM, online reviews can quickly reach a

much larger group of people. In fact, any review has the potential to become viral marketing.

[Viral marketing can be defined as electronic WOM related to a product or company that is

transmitted in an exponentially growing way; that is, the message is passed on to more than one

10
other person (Kaplan & Haelein, 2011).] Using social media such as Facebook, each receiver can

relay the message to a massive number of people. This potential reach may lead people to

consider the image they are projecting and to use moderation in their words, thereby,

contributing to a tendency for positive communications. Clearly, it would be interesting to

examine the current status of WOM that is spread via the Internet and note what is being said for

different products.

4. Research Questions

With all the research concerning Millennials, social media, and online reviews, there is

little written about which product categories are most affected by online reviews and which

online sites are being used to post reviews. This purpose of this study is to examine the activity

of Millennials in regard to online reviews. Specifically, three research questions are examined:

RQ1: Are Millennials influenced by online reviews?

RQ2: Which product categories are receiving the most positive and negative review from

Millennials?

RQ3: What online venues are Millennials using to voice their opinions concerning a

product or company?

RQ4: In regard to Millennials, do males or females post more reviews online and are the

reviews more often positive or negative?

5. We asked the Millennials

In order to answer the research questions, we surveyed 227 Millennials in a behavioral

lab at a major U.S. university during the spring of 2011. The sample was representative of the

Millennial group in which we were interested.

5.1. Millennials’ reliance on online reviews

11
 We asked the Millennials how often they read online reviews written by consumers when

they are seeking product information before making a purchase. They were also asked how often

they are influenced by online reviews written by other consumers when deciding what product to

buy or which company to buy from. They were asked to respond on a scale from 0 to 10, where 0

equals never and 10 equals very frequently.

The student Millennials both read and are influenced by online reviews. The mean score

for the question asking Millennials if they read online reviews was 8.45, with 28 percent

answering with a response of 10-very frequently. Eighty-two percent answered with a score

ranging from 6 to 10. The mean score for the question asking if Millennials are influenced by

online reviews was 8.09, with 20 percent answering with a response of 10-very frequently.

Seventy-nine percent answered with a score ranging from 6 to 10.

5.2. Product categories.

The Millennials were asked how often they post positive and negative reviews for

fourteen different product categories. The scale ranged from 0 to 10, where 0 equals never and

10 equals very frequently. Electronics and books/movies are the categories that are most

frequently the subject of online reviews. These are also the categories that receive the most

positive reviews. Other product categories that are frequently the subject of online reviews are

computers, music, and clothing/shoes. Table 1 ranks all fourteen product categories by total

reviews, plus reveals the frequency of positive and negative reviews. Each of the product

categories has a net positive score, meaning that each category receives more positive reviews

than negative reviews.

[Insert Table 1 about here]

12
 Some significant differences were found between males and females regarding the

products for which they most frequently write reviews. Millennial males write significantly more

positive reviews than females when it pertains to electronics, computers, games/toys, and

sports/outdoor products. As for the other product categories, there was not a significant

difference in positive reviews written by males and females. Of all the product categories,

electronics received the most positive reviews and men write them. The mean score for men

posting reviews about electronics is 5.03, whereas women average 2.65.

As for negative reviews, electronics and books/movies are the high rankers again, but

also in the lead are computers. In regard to gender differences, Millennial males post

significantly more negative reviews than females when commenting on music, as well as

electronics and computers. There were not significant gender differences when posting negative

reviews for the other product categories.

5.3. Facebook and company websites are used most often for posting opinions.

Millennials were asked about the frequency with which they voice their opinions using

various online sites. The scale ranged from 0 to 10, where 0 equals never and 10 equals very

frequently. Millennials were able to choose from a list of venues that encompassed the

mainstream online sites through which an opinion can be posted. These were: Facebook,

company websites, consumer rating/review sites, YouTube, Twitter, and Blogs. Examples of

each venue were given in order to clarify what types of sites are included in that venue.

Facebook and company websites are the most frequently used online venues for voicing opinions

concerning a product or company.

As shown in Table 2, Millennials have a substantial preference for Facebook and

company websites, with each having a mean of 4.3. The other venues in the study (consumer

13
rating/review sites, YouTube, Twitter, and blogs) are secondary with mean scores ranging from

2.49 to 1.90. Millennials were also allowed to write-in venues on which they post opinions. Only

6 percent used this option, each listing a different site, such as the Better Business Bureau. This

small number of write-ins helped confirm that the list provided in the survey did include the bulk

of conventional venues. As for gender differences, there was no significant difference between

males and females in regard to how often they use each of the online venues for voicing their

opinions.

[Insert Table 2 about here]

5.4. Who’s posting and what are they saying?

Males voice their opinions online significantly more often than females. We asked the

Millennials about the frequency with which they voice their opinions online, encompassing both

positive and negative comments. The scale ranged from 0 to 10, where 0 equals never and 10

equals very frequently. A statistically significant difference was found between the mean score

for males (5.14) and the mean score for females (3.81).

A study by Kau, Tang, and Ghose (2003) provides support for the supposition that males

are more vocal online regarding their opinions about products. Their study indicates that there

are substantially more males than females who rely on the Internet for product information. It

also suggests that the Internet surfing men are likely to be Millennials who are prone to go online

in order to compare product features and prices before making purchase decisions. Therefore, it

seems reasonable to believe that being online for the purpose of gathering product information

may prompt the Millennial males to also share information by posting product reviews.

Using the same 10-point scale, our student Millennials were then asked specifically about

posting positive reviews and negative reviews regarding a product or company. Results showed

14
that both male and female Millennials are posting positive online reviews more frequently than

negative reviews. As shown in Table 3, the mean positive review score for males is 4.96, while

the mean negative review score is 4.35. Females posted reviews less frequently, but still posted

more positive reviews (3.98) than negative reviews (3.05).

[Insert Table 3 about here]

There was a statistically significant gender difference in the number of negative reviews

posted. Findings indicate that Millennial males have a higher propensity to write negative

reviews. Of the positive reviews, the difference in the amount posted by males and females was

not statistically significant.

6. Selling to Millennials by leveraging online reviews

Online reviews are influential in Millennials’ decision-making processes and there is

potential for marketers to leverage this generation’s propensity to influence their fellow

consumers. Any product can be the subject of an online review, but the marketers of electronics,

books, movies, computers, music, clothing or shoes, and other products that are frequently

reviewed by Millennials should be especially mindful of their online communications. In fact,

knowing which products are receiving positive and negative reviews can be a clue for marketers

as to their product’s positioning and/or possible need for repositioning. For example, Amazon

appears to be paying attention to reviews and positioning its Kindle product in a manner that is

consistent with the feedback being received. At the time of this writing, Kindle cannot compete

well against multifunctional devices such as the iPad, but it can excel as a primarily single

function device. Consequently, Kindle is positioned as the ultimate reading device for people

who want a convenient, economical, and eco-friendly way to read. Product reviews clue Amazon

in to what is important to consumers and what features need improvement. For example, the

15
current version of Kindle is light enough to enable one-handed reading and has a larger screen

with better contrast than previous models. Customers complained page turning was too slow on

the Kindle, thus, improved control buttons enable pages to turn much faster.

Companies targeting females as their primary shoppers may be surprised to learn that the

males in the study voiced their opinions online more often than their female counterparts. This

suggests that males should not be overlooked in strategies designed to leverage online reviews. It

is also important to note that the Millennial respondents were more prone to post positive than

negative reviews. This suggests that opportunities exist to leverage online reviews through

strategies that are positive and proactive. Specific recommendations for leveraging online

reviews in order to sell to Millennials are provided below and summarized in Table 4.

[Insert Table 4 about here]

6.1. Monitor

The Millennials surveyed were prone to utilize Facebook and company websites for

posting their online reviews. Thus, these venues, along with consumer rating/review sites,

YouTube, Twitter, and blogs should be carefully monitored for reviews pertaining to a product

or company. Monitoring can be accomplished by keeping careful track of communications on

and surrounding a Facebook page, by book marking relevant sites, and by subscribing to RSS

feeds. For example, the Millennials included in our survey reviewed the electronics product

category more frequently than any other category. Therefore, companies targeting Millennials

with electronic products may use Twitter hash-tag (#) searches to identify tweets for which hash-

tags have been used to connect the tweet to a company or brand. They may also carefully

monitor CNET, which focuses on the review of technology products such as cell phones,

16
desktop, laptop, and tablet computers, digital cameras, home audio devices, printers, and

televisions. Other relevant sites include Amazon.com and Epinions.

Some companies may find it more efficient to monitor online reviews through the use of

a technology-based monitoring solution. For example, Google Alerts is a free and easy-to-use

service that marketers often employ to monitor communications relating to their products,

brands, or company. Tweetdeck allows users to monitor conversations across a variety of social

media platforms including Twitter, Facebook, LinkedIn, and MySpace. Similarly, Social

Mention (http://www.socialmention.com/) has the ability to track and aggregate product-related

conversations occurring in more than one hundred 100 social media venues. Google Analytics

can provide insight into which review sites are driving traffic to the company website. It can also

specify the amount of time customers are spending on website pages and how many purchases

are coming from those customers. Changes over time can be tracked, plus, performance patterns

can be correlated with various marketing activities. Many monitoring solutions are free while

others are fee-based.

6.2. Encourage satisfied customers to review

What a fellow consumer says about a product or service is almost always interpreted as

being more credible than the company’s advertising, selling, and other promotional efforts (Li &

Bernoff, p. 2008, p. 28). Therefore, the presence of positive customer reviews can be strong

inducements for Millennials to buy. Regular customers in competitive markets are, almost by

definition, generally satisfied. Otherwise, they would not be regular customers. This suggests

that their reviews may tend to be generally positive. Our research also indicates that Millennials

are more prone to write positive reviews than negative reviews.

17
 Therefore, as Josh Bernoff and Ted Schadler point out in their 2010 book entitled

Empowered: Unleash your employees, energize your customers, transform your business,

businesses may want to “amplify” positive reviews by making them visible in places where

potential buyers are likely to see them (p.102-103). Another way to amplify reviews is to

encourage Millennials who are regular customers to participate in the review process (Bernoff &

Schadler, 2010, p. 102-103). In some cases, a small number of dissatisfied customers may post a

disproportionate number of negative reviews. The practice of encouraging Millennials who are

regular customers to post reviews may be particularly helpful for these companies because, as

John Jantsch (2010a) points out in his Duct Tape Marketing blog, “…one way to combat any

potential negative is to overwhelm it with positive reviews.”

The process of encouraging satisfied customers to write reviews does not have to be

complicated. For example, providing interesting and relevant content may increase the chances

that satisfied customers will talk about a product or service online. Such content may be

communicated in the form of written information, pictures, or videos. The company’s opt-in e-

mail list can be used to encourage customers to review the items they have just bought (Li &

Bernoff, 2008, p. 137). The e-mail list can also be used to thank customers who have written

positive reviews (Jantsch, 2010a). The number of reviews can be boosted when the company’s

website is designed in a way that makes reviews easy to write and publish (Bernoff & Schadler,

2010, p. 102). For example, links to relevant review sites can be provided. In some cases, it may

be appropriate to teach customers how to publish a review in, for example, Google Maps, or

Yelp!. This process can be simplified by providing web-based tutorials and links to relevant sites

(Jantsch, 2010b). Other techniques to encourage satisfied customers to write reviews include

placing positive reviews in conspicuous places on the company's website, mentioning positive

18
reviews in the company newsletter, and showcasing them in company advertising (Jantsch,

2010a).

However, it should be pointed out that the process of amplifying is fraught with ethical

issues. Is it ethical to encourage satisfied customers to write reviews? If so, where is the line

between encouraging positive reviews and “planting” reviews that may, or may not be, reflective

of the experience that customers are likely to have? For example, some facilitating companies,

and the individuals who work for them, appear to be willing to produce reviews for pay. It

appears that these reviewers will post reviews even if they have little or no knowledge of the

product or business they are reviewing (Segal, 2011).

While the ethical issues remain blurred, in the United States, the Federal Trade

Commission has provided regulatory clarification in its 2009 “Guides Concerning the Use of

Endorsements and Testimonials in Advertising.” These guides make it clear that material

connections between the conversant and the companies or products being discussed, including

financial compensation, must be disclosed (Federal Trade Commission, 2009, p. 53142). They

also indicate that advertising and marketing organizations are liable for failing to disclose those

connections as well as for false or unsubstantiated statements made by the endorsers (Federal

Trade Commission, 2009, p. 53139). According to the guides, this liability may also extend to

the endorsers themselves. It should be pointed out that the applicability of these guides to online

reviews is subject to interpretation by the courts and the development of case law.

Ultimately, marketers should be aware that consumers are savvy enough to detect the

authenticity of a review (Hu et al., 2008). Controlling or forcing reviews will not be a successful

strategy for the marketer in the long run. Hu et al. (2008) suggest that an ethical strategy for

gaining helpful reviews is to identify reviewers who have a good reputation among consumers.

19
Engage these reviewers and provide useful product information in the hopes that they will write

positive reviews.

6.3. View negative reviews as opportunities to focus on product quality

When confronted with negative reviews, most business people are subject to several

emotional reflexes; e.g., lash out, become defensive, or bury one’s head in the sand. However, a

better approach may be to find ways to engage Millennial customers who express negative

opinions and, when possible, take steps to turn them into satisfied customers (Jantsch, 2010a).

This can be done by apologizing, explaining why the problem occurred, and taking the steps

necessary to “make it right” with the customer.

The information gleaned from negative reviews should also be used to correct product

and service related problems and to renew the business’ commitment to product quality.

Customers will tell you very plainly what they like and don't like about a given product. That

feedback is valuable. For example, in Empowered, Josh Bernoff and Ted Schadler talk about

QuickBooks’ monitoring of its product reviews that had been posted to Amazon.com (Bernoff &

Schadler, 2010). The monitoring process revealed that customers disliked some of the aggressive

selling practices that were incorporated into the software platform. Consequently, QuickBooks

decided to reduce the intensity of their software-based cross-selling effort.

6.4. Integrate customer reviews into your brand advocates program

Millennial customers who post positive reviews are prime candidates for brand advocate

programs. Conversely, members of brand advocate programs are likely to write positive reviews.

Therefore, companies may do well to take advantage of the synergy inherent in this circular

relationship by establishing a brand advocates program if one does not already exist. [Examples

of successful brand advocate programs include Mountain Dew’s Dewmocracy campaign and the

20
Maker’s Mark Brand Ambassadors program (Fournier & Avery, 2011; GasPedal, 2011)]. Then,

positive reviewers can be identified through various social media venues, including Facebook,

Twitter, and online communities. These positive reviewers may be invited into the brand

advocates program, and brand advocates may be encouraged to write reviews. Advocacy events

can be established to engage the brand advocates and shows of appreciation can encourage

positive reviewers. Brand advocates, like other reviewers, can be encouraged to write reviews by

providing them with interesting and relevant content and tools that assist in spreading

information.

For example, Josh Bernoff and Ted Schadler (2010) relate the story of Symantec's Norton

division, the maker of antivirus and security software, using a brand advocates program to

further engage satisfied customers while also improving their online reviews. Norton observed

that, while its customers’ comments on Facebook and Twitter were positive, comments on the

review sites were mixed. The company responded by working with the word-of-mouth

marketing company, Zuberance, to identify potential brand ambassadors. Visitors to the

company’s website were asked if they would be willing to recommend the Norton product to

others. Those who responded affirmatively were invited to join the "Norton Advocates" brand

ambassadors program. Zuberance then helped Norton Advocates write reviews that were

published on review sites such as Amazon.com and CNET. “As a result, in a short time, Norton’s

average ratings on those sites went from two stars to four and a half (on a five-point scale)”

(Bernoff & Schadler, 2010, p. 103).

6.5. Claim your account

Use your favorite search engine to look for, say, restaurants in Bloomington, Indiana.

You will notice that only a few restaurants are listed on the first page. You must click on “more

21
results” to see the complete listing. The problem for most restaurants in Bloomington is that

Internet searchers often do not click past the first page. Therefore, it is extremely important to

achieve page one rankings in local Internet searches.

The algorithms by which businesses and websites are ranked by search engine related

sites, like Google Maps, are a closely guarded secret. However, observation indicates that higher

rankings in local listings are directly tied to the number of reviews a local business accumulates

(Jantsch, 2010b). If this is correct, the rankings can be improved by encouraging customers,

especially satisfied ones, to post reviews on search engine based sites.

The process of accomplishing this begins by creating accounts with the sites that provide

local rankings (Jantsch, 2010a). These include Google Maps, Bing Local, Yahoo Local, and

Yelp!. Then, follow the steps necessary to claim and control the listing with each site. Finally,

fill out as much information as possible for the site listing. This is important because the amount

of information included, along with the number of reviews, appears to influence rankings. This

information typically includes address, phone number, URL for the business’ website, operating

hours, methods of payment that are accepted, and related visual material. It is important that the

information and content be updated on a regular basis because fresh content also appears to

contribute to high rankings.

6.6. Use customer reviews as a source of leverage

The information gleaned from review sites can be used as a source of leverage over

suppliers. In fact, to the extent that online reviews push the business toward a greater emphasis

on quality, this may be essential. In their 2008 book entitled Groundswell: Winning in a World

Transformed by Social Technologies, Charlene Li and Josh Bernoff (2008) tell how the positive

reviews for a hard-sided bag sold through eBags turned negative. Examination by eBags’

22
management revealed that customers were complaining that the bags’ hard shells were cracking

under normal use conditions. When confronted by eBags’ management, the manufacturer

initially denied that a problem existed. However, negative comments continued to pour in,

providing further evidence of the problem. The manufacturer eventually acknowledged and

corrected the problem as a result of the leverage generated by the online consumer reviews.

Therefore, companies may use online reviews as a source of leverage over their suppliers

by keeping a record of negative reviews for each product. The vendors associated with each

product may be identified. Then, to the extent possible, product problems should be linked back

to the responsible vendors. Ideally, this analysis should result in a continuously updated list of

problems categorized by vendor. Then, the information can be used to negotiate with vendors for

higher quality products, better services, or lower prices.

7.0. Conclusions

The advent of customer reviews has contributed to a power shift that is occurring in the

marketplace. Millennials and other consumers are able to influence literally thousands of

purchase decisions with a few sentences placed in online review venues. As the usefulness of

these new venues becomes more apparent, Millennials will almost certainly place more reliance

on them in their information seeking behavior. Therefore, the following consumer behaviors and

trends are likely to occur in regard to Millennials:

 Advances in user-friendly technology can be expected to increase Millennials’ propensity to

rely on consumer reviews. For example, many online review sites have “apps” that facilitate

their use by owners of smartphones and tablet computers (e.g., iPad, Motorola Xoom™).

These versatile devices are convenient and easy to use for consumers who are, for example,

looking for a restaurant or considering a technology purchase.

23
 The information contained in online reviews may enable Millennials to better discern quality

and value. Thus, the current consumer trend of seeking greater value for the money will

likely continue as consumers adjust their purchasing behavior based on the available

information.

 The ready availability of review information, based on other customers’ experiences, may

place a greater reward on quality in the marketplace. To the extent that this occurs,

businesses may place greater emphasis on high quality products and services.

 Small businesses may benefit disproportionately from the growth in consumer reviews and

other online venues. Small businesses that effectively utilize online venues have the potential

to influence the consumer during the decision making process. Therefore, the playing field is

likely to become more level as consumers shift their attention from high-cost mass media

advertising to the relatively low-cost online venues that small businesses are better able to

afford.

 Millennials have traditionally been viewed as the innovators and early adopters of

technology, including online reviews and other social media venues. Thus, the impact of

consumer reviews will be magnified as Generation Xers and Baby Boomers continue to

follow the Millennials’ lead in the adoption of technology and online information sources.

The coming shifts in the online review sites themselves are less clear. One possibility is

that a small number of broad-based venues, such as Epinions (http://www.epinions.com/), will

eventually dominate the review space. Another option is that the venues of the future will be

specialized by product category. For example, Yelp! (http://www.yelp.com/) and Urbanspoon

may dominate the restaurant review space while TripAdvisor dominates the hotel and airline

space. Facebook may seize the opportunity to dedicate a portion of its site specifically to product

24
reviews and the conversation that surrounds them. Specialization by product category may vary

from one geographic locale to another. For example, Zagat (http://www.zagat.com/) could

dominate restaurant reviews in New York while Yelp! dominates restaurant reviews in Dallas.

Additional research is needed to deepen our knowledge of how and when consumers use

online reviews and how marketers should respond to their online information search behavior.

Because our research was limited to Millennials, additional research focusing on other age

groups will be particularly helpful. However, it is clear that the power shift occurring in the

marketplace necessitates that businesses be cognizant of the changes in consumers’ information

seeking behavior and adapt their marketing strategies accordingly (Mangold & Faulds, 2009).

Marketing managers may want to reconsider their communication objectives, promotional mix,

and promotional budget in light of consumers’ changing information acquisition patterns

(Kietzmann, Hermkens, McCarthy, & Silvestre, 2011; Weinberg & Pehlivan, 2011). Product

designers should pay attention to the features that are most likely to spark favorable reviews and

online conversations (Rosen, 2009, p. 147-158). Production managers and purchasing agents

should renew their focus on product quality. Marketing research departments may benefit from

hiring specialists who monitor and analyze product reviews. Public relations departments would

be wise to find creative ways to engage customers in online venues while stimulating favorable

reviews and conversations (Parent et al., 2011). Advertising departments may shift from one-way

targeted messages to two-way conversations, while featuring favorable reviews in their

advertising. Sales managers should integrate reviews and other online venues into the selling

process.

Finally, and perhaps most importantly, marketing managers may want to renew their

focus on customers’ needs, wants, and preferences. In doing so, an emphasis must be placed on

25
consumers’ experiences – experiences with the product, experiences with the product delivery

process, and experiences with the social media ecosystem of which consumer reviews are a part

(Hanna, Rohm, & Crittenden, 2011). The power shift in the marketplace necessitates it! If

marketing managers succeed in renewing their focus, or if they fail to do so, their customers will

tell thousands of their friends with a few keystrokes.

26
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 Table 1
Product Categories by Frequency of Positive and Negative Reviews

Product Category Total Positive Negative

Reviews Reviews Reviews
Electronics 6.38 3.82+ 2.56+
Books/Movies 6.04 3.76 2.28
Computers 5.47 3.20+ 2.27+
Music 5.16 3.19 1.97+
Clothing/Shoes 5.08 3.24 1.84
Hotels/Vacation spots 4.86 2.93 1.93
Sports/Outdoor products 4.74 2.82+ 1.92
Game/Toys 4.32 2.48+ 1.84
Food products 4.22 2.46 1.76
Home products 4.07 2.44 1.63
Autos 3.90 2.25 1.65
Beauty products 3.81 2.20 1.61
Pet products 3.39 1.94 1.45
Jewelry 3.32 1.89 1.43

Mean scores on a scale of 0 to 10 where 1 is never and 10 is very frequently.

+
Gender scores are significantly different for this category, with males
posting more reviews. Sig=.005

31
 Table 2
Online Venues for Posting Reviews

Venue Means
Facebook 4.34
Company websites 4.32
Consumer rating/review sites 2.49
YouTube 2.07
Twitter 1.96
Blogs 1.90

Mean scores on a scale of 0 to 10 where 1 is never

and 10 is very frequently.

32
 Table 3
Frequency of Millennials Posting Online Reviews

Type Males Females

All reviews 5.14+ 3.81+
Positive reviews 4.96 3.98
Negative reviews 4.35+ 3.05+

Mean scores on a scale of 0 to 10 where 1 is never and 10

is very frequently.
+
Gender scores are significantly different for this type. Sig=.005

33
 Table 4
Recommendations for Leveraging Ratings and Reviews

Recommendations Tactics

1. Observe communications in Facebook and other social media venues.

2. Perform Twitter hashtag (#) searches.
Monitor
3. Bookmark relevant review sites.
4. Use a technology-based monitoring solution.
1. Showcase positive reviews.
2. Encourage regular customers to participate in the review process.
3. Provide interesting and relevant content
4. Use opt-in-email lists to encourage regular customers to post reviews.
5. Express thanks to people who have provided positive reviews.
Encourage online
6. Make your website user-friendly for reviews (e.g., provide links to review sites).
reviews
7. Help customers write and publish reviews by providing tutorials and links to sites
such as Google Maps, Yahoo! Local, or Yelp!
8. Highlight positive reviews by showcasing them on the company’s website,
newsletter, and advertising materials.

1. Positively engage the customer (i.e., acknowledge the problem; apologize;

explain why the problem occurred; take steps to “make it right;” follow up when
Negative reviews appropriate).
are opportunities 2. Correct the product and service problems that are discussed in reviews.

1. Create a brand advocates program if one does not already exist.

2. Find positive commenters on social media.
3. Invite positive reviewers to become brand advocates.
Add reviews to
4. Encourage brand advocates to write reviews by:
brand advocates
 Providing interesting and relevant content.
program
 Providing tools that assist the advocates in spreading information.
 Showing appreciation for positive reviews.

1. Create accounts with sites that provide local rankings.

2. Follow the steps necessary to claim and control the listing. Filling out as much
Claim your
information as possible will improve the ranking.
account
3. Continuously update your listing with fresh content.

1. Keep a record of negative reviews for each product.

2. Identify vendors for each product and link problems back to the responsible
vendor.
Use reviews as
3. Keep a list of problems categorized by vendor.
leverage
4. Use this information to negotiate with vendors for higher quality products, better
service, or lower prices.

34

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