Study Conducted by comScore and The Kelsey Group Reveals that 24 Percent of Online Local Service Review Users Purchase Service
RESTON, Va., Nov. 29 /PRNewswire-FirstCall/ — comScore, Inc. , a leader in measuring the digital world, today announced the results of a new study conducted with The Kelsey Group, a leading research and strategic analysis firm focused on local media and advertising, that examined the impact of consumer-generated reviews on the price consumers were willing to pay for a service delivered offline. The study, based on a survey of more than 2,000 U.S. Internet users in October 2007, revealed that consumers were willing to pay at least 20 percent more for services receiving an “Excellent,” or 5-star, rating than for the same service receiving a “Good,” or 4-star, rating.
The study examined the offline sales impact of online reviews for restaurants, hotels, travel, legal, medical, automotive and home services. Nearly one out of every four Internet users (24 percent) reported using online reviews prior to paying for a service delivered offline. Of those who consulted an online review, 41 percent of restaurant reviewers subsequently visited a restaurant, while 40 percent of hotel reviewers subsequently stayed at a hotel.
Purchase Behavior Subsequent to Online Review Consultation October 12-18, 2007 Source: comScore, Inc./The Kelsey Group Percent of Review Viewers Subsequently Making a Service Purchase of Stated Service Restaurant 41 % Hotels 40 % Travel 27 % Automotive 24 % Home 19 % Medical 14 % Legal 8 %
Online Reviews Very Influential in Offline Purchase Decisions
More than three-quarters of review users in nearly every category reported that the review had a significant influence on their purchase, with hotels ranking the highest (87 percent). Ninety-seven percent of those surveyed who said they made a purchase based on an online review said they found the review to have been accurate. Review users also noted that reviews generated by fellow consumers had a greater influence than those generated by professionals.
Online Review Influence on Purchase Decision October 12-18, 2007 Source: comScore, Inc./The Kelsey Group Percent of Review Users Identifying Review as Having a Significant Influence on Service their Purchase* Restaurant 79 % Hotels 87 % Travel 84 % Automotive 78 % Home 73 % Medical 76 % Legal 79 % * Based on responses indicating at least 4 on a 5 point scale
Consumers Willing to Pay at Least 20 Percent More for 5-Star Service than 4-Star Service
comScore asked the study participants how much they would be willing to pay for a particular service based on the quality of the service. The results showed that consumers were willing to pay between 20 percent and 99 percent more for an Excellent (5 star) rating than for a Good (4 star rating), depending on the product category.
Amount Consumers Willing to Spend for 5-Star Service October 12-18, 2007 Source: comScore, Inc./The Kelsey Group Excellent Good Service (Suggested Average Price) (5 Stars) (4 Stars) Lift Restaurant Meal ($20) $37.95 $25.44 49 % Restaurant Meal ($50) $59.93 $41.40 45 % Hotel ($100) $137.36 $99.73 38 % Home ($250) $252.15 $209.50 20 % Travel ($350) $366.72 $299.81 22 % Legal ($60) $104.36 $52.51 99 % Medical ($15) $29.67 $23.54 26 %
“These data show the importance of local service review sites in consumers’ purchase process,” said Steve Marshall, research director for The Kelsey Group. “With such a large percentage of review users subsequently purchasing, it’s vital that local service providers have a positive presence on these review sites.”
“This study underscores the importance of providing not just good, but excellent, service if a business hopes to generate positive consumer reviews which will result in greater sales,” said Brian Jurutka, senior director, comScore Marketing Solutions.
About this study
The comScore study was based on 2,078 survey respondents, including 508 who used online consumer reviews, conducted from October 12-18, 2007. Consumers were asked about their usage of online reviews and were also asked what price they would be willing to pay for a service given an average service price and an aggregate consumer rating.
About The Kelsey Group
The Kelsey Group is the leading provider of research, data and strategic analysis on directories, small-business advertising, online local media and mobile advertising. Founded in 1986, the company has built a reputation as the premier analyst firm covering the directory publishing community and the emerging local search marketplace, providing advisory services (The Kelsey Report(R) and Interactive Local Media), publishing (Global Yellow Pages(TM)), consulting (more than 400 individual assignments) and conferences (69 events).
comScore, Inc. is a global leader in measuring the digital world. This capability is based on a massive, global cross-section of more than 2 million consumers who have given comScore permission to confidentially capture their browsing and transaction behavior, including online and offline purchasing. comScore panelists also participate in survey research that captures and integrates their attitudes and intentions. Through its proprietary technology, comScore measures what matters across a broad spectrum of behavior and attitudes. comScore analysts apply this deep knowledge of customers and competitors to help clients design powerful marketing strategies and tactics that deliver superior ROI. comScore services are used by more than 700 clients, including global leaders such as AOL, Microsoft, Yahoo!, BBC, Carat, Cyworld, Deutsche Bank, France Telecom, Best Buy, The Newspaper Association of America, Financial Times, ESPN, Fox Sports, Nestle, Starcom, Universal McCann, the United States Postal Service, Verizon, ViaMichelin, Merck and Expedia. For more information, please visit http://www.comscore.com.