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The Ratings Game

Many sites allow visitors to review and rate the products they're selling. Should you follow suit?
August 1, 2003
URL: http://www.entrepreneur.com/article/63300

Offering unique content on your Web site has always been one way to interest site visitors. Now some e-commerce entrepreneurs are latching on to a concept long practiced by giants like Amazon.com and Drugstore.com: posting uncensored reviews and ratings of the products you sell on your site. The hope is that providing this value-added service will build a sense of community.

But some experts are wary of the practice; they believe e-tailers risk losing sales by posting negative comments in an item listing. Even worse, an online retailer's suppliers may blacklist it if too many bad reviews of those suppliers' products appear on a site.

Despite such fears, the big dotcoms have found success doing it--prompting other sites to follow suit. "We are starting to see more and more e-tailers either looking into or adding consumer reviews and ratings to their sites, and one reason for the popularity has been because of Amazon.com's success with it," says Christopher M. Kelley, an analyst at Forrester Research.

Kelley says these e-tailers are not really concerned that negative reviews may pop up and prevent consumers from buying products, because consumers appreciate reviews in most categories. "Books and music are particularly well-suited to reviews because people have always wanted to get a sense of what they are going to read or listen to before buying," says Kelley. Big-ticket high-tech products are also good candidates for reviews, because consumers want to have as much information as possible before making a purchase decision.

E-tailers can also allow consumers to rate products. Here, a survey model allows customers to indicate whether they like a product or rate items on a scale of 1 to 5-without giving them free reign to write whatever they want. Netflix, a Los Gatos, California, online DVD movie rental service with more than 1 million members, relies extensively on reviews and ratings.

The company, which expects sales of $255 million to $275 million this year, offers reviews from its own professional critic--James "Mr. DVD" Rocchi. It also offers reviews from other critics, which it gets from a feed from movie review site Rotten Tomatoesand links to full reviews on external sites that are not affiliated with Rotten Tomatoes or Netflix. Netflix also allows site visitors to write their own reviews and rate movies.

"Consumers really value the consumer reviews the most," says Reed Hastings, 42, Netflix's founder and CEO. "They find the reviews authentic and interesting."

Reed also says Netflix is not concerned about negative reviews. "We want consumers to be happy with the movies they choose, and a negative review on a poor movie will steer someone to another movie they will enjoy more," he says. "We want consumers to select the movies they love."

Netflix's user reviews can also be rated and gain "top reviewer" status from fellow site users who indicate whether a write-up was helpful to them. The more "helpful" votes a reviewer receives, the higher his or her ranking becomes. "Not helpful" ratings count against a reviewer's ranking.

Netflix's members are also encouraged to rate movies so they can get personalized recommendations from Netflix's library of more than 13,500 titles. As members rate movies, Netflix's rating system instantly matches similar movies to the ones they have rated to determine whether they would like it or not. Essentially, the more movies a member rates, the better their recommendations will be. With this information in hand, Netflix can determine what movies it suggests to its members.

In general, Hastings says that any e-business "should exploit the power of the Internet and not be a catalog where the same images are given to every visitor." With this power, an e-business can customize its site for every customer and gather community feedback to improve its site's effectiveness.

Credibility Issues
One thing to keep in mind: If you offer reviews, it's very likely that some companies that have products on your site may try to use this feature for their own benefit. "Some will monitor your reviews and try to seed them to make sure their product is exhibited in a positive light, especially if [your] site gets more popular," says Kelley.

Unfortunately, there's not much an online merchant can do about such a practice. However, it's probably a good idea to get to know your site visitors and monitor their behavior. That way, you're better equipped to notice if a review looks or sounds fishy. If it does, you can contact that reviewer by e-mail and make sure he or she is a legitimate customer.

Still, the trend in consumer reviews will only grow in coming years, says Kelley. Why? As more consumers get broadband access, they'll spend a lot more time researching items online. According to Kelley, "The need for good product information, including reviews, is going to spike because consumers are going to have a more efficient way to gather more information." How you decide to provide that information to your customers is up to you.


Melissa Campanelli is a marketing and technology writer in Brooklyn, New York.