Reviews are a form of social proof.
Both quantity and quality matter. When you’re looking at buying a product on an ecommerce website, you want to know how many people bought that product and also how many thought it was good (as well as the reason people rated it poorly).
Reviews, as a Harvard Business School study put it, “fill in the gaps by providing a tremendous amount of information on which to base decisions.”
There are two ways that customer reviews are attributed online:
Internal word-of-mouth (WOM): Reviews located on the retailer’s website.
External WOM: Reviews located on third-party sites (e.g. Google My Business, Facebook, etc).
Both types of user reviews are important. While on-page reviews don’t require a click to another tab to purchase, one study from Nielsen found that 82% of Yelp users visit the site when preparing to spend money on a product or service.
The quality matters too. Each added rating star on a Yelp review (for restaurants) translates to anywhere from a 5% to 9% effect on revenues.