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Shaping Customer Behavior with Online Reviews

Researchers from Northwestern University's Spiegel Resarch Center and PowerReviews have conducted a study which measures the impact that reviews and ratings have on online sales.

The report examined data from two retailers (from primarily lower-priced categories and a third of higher-priced items to determine the relationship between reviews/ratings and purchasing behavior .

What the researchers discovered is that including reviews on product pages measurably boosts sales, and conversion rates steadily rise with the first few pieces of feedback. The conversion rate on a page that includes five reviews is 270% higher, on average, than that of a page with no reviews. The researchers also found that the conversion rate increased 190% when reviews were displayed for a lower-priced product but spiked 380% when reviews were displayed for a higher-priced product.

The study also analyzed the impact of star ratings on purchase likelihood (which peaks for products with ratings in the 4.0 - 4.7 range, and then begins to decrease as ratings approach 5 stars) and how sales lift varies (in some cases significantly) by product category.

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