Can Too Many User Reviews Cause Brain Damage?

I was recently reading an article on The Economist on the value of someone adding the 3,202nd review to Amazon about the new Harry Potter book. In interviews with consumers, many feel that it is just not worth the time, as their review will just get lost in the mix. I personally can only handle reading a handful of reviews before my head begins to hurt.

Although I am not sure about the impact of adding review number 3,203 to a Harry Potter book, Google Analytics has found that volume does make a difference. According to John McAteer, a director at Google, volume of reviews does impact transactions, “Single digits didn’t seem to move the needle at all,” says Mr McAteer. “It wasn’t enough to get people comfortable with making that purchase decision.” Seems like that magic number was more in the range of 20 reviews for a specific product to effect transactions. An eVOC Insights study reveals that 63 percent of online shoppers are more likely to buy from sites with ratings and reviews.

If you think about this for a second, it makes total sense. I mean, the reason we even read reviews in the first place is to try to understand consumer sentiment or popular opinion for the product or category in question.

Think about the last time you tried to book a hotel for your vacation. More than likely you knew generally where you wanted to stay, and you probably had some specific requirements like nice pool, close to the beach or close to shopping. From there, you probably started reading the reviews of each hotel that met your location requirements, above 3.5 stars, to try and figure out which was the best one for your special trip. After reading 15 reviews for each of the 10 hotels that you identified on Trip Advisor, and an hour later, you probably have narrowed it down to 5 possibilities. From here the frustration mounts as you now go to Hotels.com to see if you can find more information to help you decide. If this is inconclusive, you now seek another travel site like Expedia to see if there maybe more insightful information there. Several hours later, with no clear answer, you toss a coin and heads it is; Sheraton here we come. Did it cause brain damage? Unclear, but I would’ve surely used less curse words in the process.

The key here is that we all care about the experiences, knowledge and opinions of the general population when it comes to making purchasing decisions. But the issue with the review infrastructure available today is that we are left to try to determine popular opinion independently by reading the reviews of the masses. While reviews have shown to be a great way to help people make purchases, it is far from perfect. In this vacation hotel example, wouldn’t it have been more efficient if magically you knew that the most popular hotels were 1) Marriot, 2) Sheraton and 3) Doubletree based on the opinions of 10,000 people? From there you could read the individual reviews for those three hotels to make your final decision. If this were all magically true – how much time would this have saved you? Think about all the headaches it would have solved!!!

Now if we can only make this magic a reality.

It reminds me of days of communication; before we had email, we were relegated to snail mail and fax machines. In those days, we imagined what it would be like if we could send messages instantly to people…. now look where we are.

TheCrowd is gathering……..

Is Anyone Listening to the US Auto Market?

On April 27, 2009, GM proposed a new restructuring plan in an effort to convince the US Government to give the company $11.6B in bailout versus the $5B originally agreed. GM proposed that $10B of this bailout be transferred to stock which would give the Government a 50% holding in the company. There are many other headlines in this plan, including a proposal to the United Auto Works to forgive $10B in healthcare debt in return for a 39% stake in the company. The Government is now in similar talks to save Chrysler.

Now, I am all for supporting the US auto makers, if only for nostalgia reasons to one of the countries foundational industries. However, I believe that this kind of plan simply prolongs the inevitable, which is that both companies are ultimately doomed. Unless they can start to build products that people actually want to buy!!!

In the last several years, I have personally looked at buying a Ford, GM and a Dodge SUV. In each case, I ended up buying an Acura and two Hondas. Why did I turn my back on our countrymen? Well, because as a consumer, I try and make the best purchase I can for the money that I have. Anytime I go to purchase a new car, I do extensive research to the point that it drives my wife crazy, to ensure that we make the most educated decision. The result thus far has been that Honda Corporation had a superior product for the money.

I realize that we are seeing a slump in auto sales worldwide, and in fact, several Japanese makers are also asking their government for assistance. In this case though, GM’s problems go much deeper. In 2007, GM lost the top position, as world’s largest automaker, to Toyota. Since then, they have continued their decline rapidly.

It seems to me that where GM really needs help is not just a longer “lifeline” but rather a new “lifestyle”. The reason Toyota was able to overtake GM was because they understood the customer better and built better products. The bottom line is that they listened to the crowd, and the crowd spoke with its wallet.

As hard as it may be, I think that GM needs some tough love first, before the Government provides any assistance. The company has been carrying floundering brands such as Pontiac and Buick for several years and is just now realizing that it might be time to shed dead weight. Just as the wisdom of the crowd has had its say on GM by not buying its products, GM must now listen to this same wisdom and figure out how to build products that people want to purchase.

Hold on my little GM, help is on the way. TheCrowd is gathering……..