It is worth remembering just how much the internet has changed how we do business and has radically altered consumer behaviour. Knowing how much it has revolutionised interactions and exchanges is key to increasing business and understanding consumers.
Not so long ago certain things in business were set in concrete – how to advertise and how to market. Budgets were spent on print directories, radio and newspaper ads, flyers, promotions, and sponsorships. Selling goods and services was dominated by branding and showing products as they were or in use. Businesses relied on the word of mouth of satisfied customers to further promote themselves. It was all very established and every new business followed the same patterns – depending on the size of their advertising and marketing budgets. One thing was absolute – promotion was essential and without it a business would not succeed.
Newspaper advertisements and classifieds used to be an essential advertising tool for every business
When the internet began to take hold through the introduction of the world wide web in the 1990s, it was seen as little more than a gimmick – the next extension after emails – which, as we know, has completely changed the way we communicate. Forums, online shopping, blogs, mailing lists and the first e-commerce sites like Amazon were the main early online experiences. The internet was primarily a new toy that nobody really knew how to play with yet.
As the technology of internet delivery developed and memory capacity increased, the internet began to change into the global virtual interface that it is today, and as it did, businesses began to utilise it to connect with consumers and cement their brands and products and services.
The possibility of connection with consumers increased at dizzying speeds as technology evolved and hardware devices became cheaper and faster. We may take them for granted now, but smart phones have become a part of us – whether we like it or not – and we are now connected to the information we desire in the seconds it takes to download it.
Every consumer now has access to everything they need to find a product or service, and to make decisions on who they want to engage in business and what they want to purchase.
“In an instantly accessible marketplace with every product on offer, consumers are looking for more than just ‘advertising’.”
There is a massive change in what drives consumer behaviour, and that change has its beginnings in word of mouth. In an instantly accessible marketplace with every product on offer, consumers are looking for more than just ‘advertising’. They are not taken solely by the display of products or services the way they were before. They want word of mouth and they are happy to take it from those they do not know. They are looking for reviews.
“Online reviews are the dominant factor in consumer decisions and it makes perfect sense.”
Whether it’s a hotel or restaurant, a travel package, cosmetics, toys, cars, mechanics, dentists or electricians – consumers will not engage or purchase until they are satisfied they are not ‘going in blind’ and may be ripped off or dissatisfied. Online reviews are the dominant factor in consumer decisions and it makes perfect sense.
While we have accepted the internet as the major marketplace, we are still wary and do not want to get burned. We may see an ad or be told something is worth buying but how do we ‘really know’ that it is what it purports to be? How can we trust what we are being sold?
“The key factor in the whole process is authenticated feedback . . .”
An example of this that nearly every New Zealander will know is Trade Me. Before Trade Me, newspaper classifieds were the main avenue of selling second hand goods. Trade Me changed all of that with a fully functional virtual marketplace for new and second hand products, as well as services. The key factor in the whole process is authenticated feedback from buyers and sellers so that sellers – as well as buyers – can be judged on the feedback that is left on their profiles. That feedback gives transparency and trust to anyone wanting to purchase any product. It means that consumers are able to take the opinions of previous customers before committing themselves, and that accountability is a substantial factor in Trade Me’s continued success.
Online reviews are word of mouth that goes hand in hand with the evolution of the internet
That need for trust is the same now across every virtual exchange. Consumers are actively looking for reviews before they make any step toward contacting a business or buying a product. The internet may be able to carry nearly every piece of information and promote any product, but without reviews consumers do not feel safe enough to make a decision.
So today branding is not enough, display advertising is not enough, the messages of promotion are not enough. They are a a start but without consumer reviews they are practically a waste of time, effort, and money.
The last 30 years has seen an absolute revolution in how we purchase and how we engage businesses but one thing has not – we still rely on word of mouth, we still need to trust and believe in what we are being offered and sold. We want to know what others think before we commit. Online reviews are word of mouth that goes hand in hand with the evolution of the internet.
