Mythology - The Meaning Behind the Marketing

Just How Much do Online Reviews Influence?

I've always been a Malcolm Gladwell fan. Partially because his books make you think, but not too hard because he simplifies, summarizes and references scientific research and case studies in a brilliant way. But partially because I've met him a few times and he's a genuinely kind, generous human being who happens to be pretty darn smart.

So I've been looking forward to his latest book, Outliers, about the nature of success and the factors that make becoming an "outlier" success possible and even likely.

I usually check out the reviews on Amazon.com. Sure, some of them might be plants from a publicist. But many are thoughtful and well-written, and they normally give me an idea of a book's strengths and weaknesses.

In the case of Outliers, I noticed the vast majority of ratings in the 4 and 5 range - so far, so good. But then I read the first review by a poster named "Nathan." Nathan had some big problems with Outliers, and he laid them out in devastating detail. I have to admit, Nathan's comments put a damper on my pent-up Gladwell purchase.

Why did Nathan influence me more than the majority who gave Outliers a 4 or 5 rating? Is his post, combined with a few other anti-Gladwell posts, the beginning of an anti-tipping point for Gladwell and a Blink backlash?

And how do online product or service reviews influence most of us?

It's been demonstrated frequently that online reviews have big influence on offline purchase. According to Comscore in a 2007 study, nearly one out of every four Internet users (24%) reported using online reviews prior to paying for a service delivered offline.

But what about reviews influence us? Certainly the percentage of positive-to-negative posts and ratings can build a case for or against a product. But sometimes its more than that. It can be the credibility of the poster demonstrated in the form of thoughtful writing and in-depth analysis. It can also be the placement of the review; which one did you read first? Not all reviews are created equal.

In today's marketplace, there are no secrets. But there are influentials who guide others on new ways of thinking, both positive and negative. It's even more critical to cultivate influentials who may be able to sway opinion and take the conversation in a different direction when something negative gets posted about your company or product.

In Tough Times, A Powerful Value Prop Rings True

I couldn't help noticing the effectiveness of Southwest Airline's most recent series of commercials. They hammer a very simple, appealing message: "Ya know all those rinky-dink charges other airlines tag you with for an extra bag or calling to reserve a flight? Well, we don't do that."

Southwest has always been a powerful marketer. Not because of the cleverness of their ads, which have historically been pretty effective, but because they understand simple, powerful value propositions. In an industry where customer satisfaction is ungodly low and where you seem to get zapped with a "privilege" fee for breathing their recirculated air (don't they realize it's a privilege that we ride on their plane?), Southwest has been consistent, clear and powerful in what they offer the traveling consumer.

Southwest has always been a market-leader in the low-fare category. But I suspect they will begin to capture additional market share during these tough economic times. They, like many other companies who don't panic and maintain a strong, simple value to the customer, have many opportunities to shine during economic downturns.

However, Southwest doesn't have to tout price cuts in this scenario. The simple value proposition of not making customers feel screwed can be a powerful proposition. It's one many banks should heed.

A Giant Gulp in Cincinnati

Nielsen just reported that 72% of consumers believe private label store brands are equivalent to name brands. The study also found:

• Private label accounted for $81 billion in U.S. sales this year, up 10.2% from the previous year.
• Sixty-three percent of consumers believe private label's brand quality is just as good as name brand quality, while 33% of respondents said they consider store brands to be of higher quality than name brands.
• Price and value are the primary drivers for growth, with 74% of consumers expressing price as the key purchase factor.
• Two-thirds (67%) of those surveyed said store brands provide "extremely good value" for their prices, while 35% are willing to pay the same or more for a store brand if they like it.

What's a name brand to do in this kind of consumer environment? Well, it always helps to differentiate. Brand names were built on the idea that they represented higher quality and new benefits. Granted, it's hard to innovate in commodities, and some of the first signs of brand name demise were in categories where it became a tougher sell to convince a consumer that green beans were somehow differentiated.

Today, name brands that still succeed have found a way to infuse more than just the promise of extra functional or tangible value into their brand. They infuse emotion. They infuse the alignment of values with the product choice.

This may be tougher to do in commodities, but it's still entirely possible - and profitable - in most categories. It has to be real, it has to be credible, but Americans have proven time and again they are willing to invest their dollars (even shrinking dollars) into brands that give them a jolt of emotional value.