Basing
key decisions on the opinions of social media influencers might make members of
the public feel empowered and ‘on point’ in the moment, but it may not
necessarily be empowering in the long run.
The
social media and online review culture has grown into a movement of significant
influence, and consumers are becoming increasingly reliant on online ratings,
reviews and customer feedback to make decisions. But the convention of taking
the opinions of complete strangers as gospel truth is potentially harmful to
both consumers and to businesses.
It
is all very well choosing restaurants, vacuum cleaners and mobile phones, motor
cars even, based on internet reviews of fellow consumers, but when it comes to
decisions such as where to invest your retirement savings, make sure you also
do your own research and look at the evidence.
According
to Rise of the Review Culture, a consumer research report by Brightpearl
research hub, around 84% of Americans regularly read online reviews and 46% of
them search for star ratings associated with a particular product or service
before committing to buy it.
Yelp,
the American online review platform, has come under fire in recent years from
both consumers and businesses over allegations that customers were using their
Yelp membership status as a bargaining chip to gain preferential treatment.
As
the platform became better known and gained power and influence, accusations
were made that members were effectively holding hospitality businesses to
ransom, threatening to give poor reviews if they weren’t given upgrades,
freebies and superior service.
On
the other side of the coin, some businesses were accused of soliciting positive
reviews and otherwise skewing their review profiles on the Yelp platform.
The
Brightpearl report found that online customer reviews and star ratings had a
real impact on company revenue. A number of positive reviews will boost a
brand’s reputation and can be expected to result in an increase in sales. The
research underpinning the report found a significant, measurable revenue difference
between companies with a three-star rating and those with a five-star rating.
South
Africans have increasingly embraced online reviewing systems over the past
couple of decades, with platforms, including Twitter and Hello Peter, gaining
popularity and influence over the years. Sites like these have made it easier
for customers to catch the attention of businesses and engage directly with
them. Hello Peter is seen by many as something of a consumer watchdog, forcing
firms and businesses to be publicly accountable.
Often,
the result of interactions that start with online complaints is positive.
Constructive dialogue usually results in problems being resolved, but the net
result of the power of the reviewing culture is not always positive.
I
like the fact that the accessibility of online platforms makes customers less
forgiving of poor service and inferior products, but worry that it also makes
members of the public less inclined to do proper research, or even any research
of their own.
Quite
often, a business can be marked down based on an individual’s interactions with
specific personalities attached to the brand.
Also,
brands can come in for flak when an individual with social media influence gets
annoyed by what can feel like unnecessary red tape. It is for very good reason
that the financial services industry is held to very high standards of
regulation and compliance, which can be annoying in a world focused on instant
gratification.
More
than one certification request can be annoying in a high-speed world. Nobody
wants delays, but extra layers of care and compliance are usually in the
consumer’s interest, and you may be very thankful for such at a later stage.
Still, one apparently false move when you are dealing with a social media influencer
and the knives can be out.
Social media reviews can definitely be a useful addition to vigorous independent research but should not be relied on instead of it.
Choosing
a brand that is ‘liked’ by your favourite social media influencer will count for
little if you pay a fortune for an under-performing investment over the next
few decades, and end up with a big lifestyle downgrade in retirement.
Know
the facts before committing and don’t be sucked in by online popularity
contests, such as who has the highest star ratings. Make your financial
decisions based on the facts and what’s right for you, rather than solely on
the opinions of strangers.
