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Bad reviews boost business sales

Posted Oct 9th, 2009 at 6:45 PM and seen 3443 times

More Small Business News and Insights.

Amazon.com broke new ground in 1997 with its introduction of online reviews and, ever since then, retailers have grown acutely aware of the effects of positive reviews. The rise of “social shopping” sent consumers directly to the internet for product reviews and old-school thinking said that one-star or negative reviews should be avoided at all costs, but a new way of thinking has emerged that values all reviews, good or bad.

Small business owner Jim Hobart, co-founder of AlpacaDirect.com, decided to ditch the hand-picked, always favorable reviews that were featured prominently on his company's homepage in favor of software that allowed shoppers to post reviews directly to the site. The result? A few mediocre reviews...and a 23% increase in sales.

By @AnnieColbert

 Guy Kawasaki

Comments (7)

Oct 10, 2009
Chukwuma Onyeije said...
This seems counterintuitive, but it really isn't. There have been many times, that I read an Amazon 1-star review and disagree with it so strongly that I end up purchasing the product.
Oct 10, 2009
Lorne Pike said...
This really does make perfect sense. Showing negative reviews gives credibility to the positive ones. If a reader feels they're getting both sides of the story, they are much more likely to believe the good ones. Honesty is not only the best policy from a moral point of view; it really does make great business sense.
Oct 11, 2009
Ridwan Jaafar said...
I don't understand! Every good company receives negative feedback once in a while. It's no big deal. And, you can not conclude that Mr. Jim's negative reviews could be the reason for the sales increase!!!
Oct 11, 2009
Lisa Pecunia said...
Thank you for pointing this out. Finally somebody is getting it that always having all 5-star reviews dilutes the efficacy of a rating system. Good post.
Oct 11, 2009
Asif said...
You are using a single data point to reach this conclusion?
Oct 11, 2009
kamal said...
i don believe that!! how could that be..
Oct 11, 2009
Dr. Jochen L. Leidner said...
More reviews (whatever the rating) mean more interest/higher potential relevance. People would perhaps be more confident in buying a book that has 16 reviews with 3 stars (out of 5) than one with a single 4-star review.
Perhaps more importantly, more reviews may also produce more landings from search engine queries, since more reviews means a longer page length and richer vocabulary on that page.

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