Can bad reviews be good for business? New research says yes

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Negative online reviews and low-star ratings are generally known to be bad for brands, so much that there are entire businesses devoted to reversing the damage. But a new study from the UBC Sauder School of Business found that this isn't always the case.

UBC Sauder Associate Professor Dr. Lisa Cavanaugh and her research team have found that negative online comments have little effect in cases where brand relationships are strong and consumers personally identify with a brand's products. In some instances, they found negative reviews can actually have positive effects for brands.

"When consumers personally identify with a brand, they see facets of themselves in that brand," Dr. Cavanaugh said. "When a reviewer leaves a disparaging comment about an identity-relevant brand, consumers feel compelled to protect the brand, and by extension themselves, by scrutinizing the source of the negative review."

Social proximity matters when it comes to reviews

The researchers found that the social proximity (e.g., demographic or ) of a negative reviewer plays a critical role in how consumers respond to a negative review.

For the study, researchers conducted sixteen different experiments using identity-relevant brands, which are companies that consumers tend to feel strongly about and personally identify with, such as Apple, Tim Hortons, Roots, and NFL football.

In one experiment, researchers surveyed NFL fans, asking them about their reactions to negative or positive online reviews of an NFL-branded sweatshirt. They found that if the reviewer's profile reflected a different social demographic, or a distant location, a negative review could actually boost the participant's interest in buying the sweatshirt even more than a positive review did.

A similar case was also observed where a negative review from a person in distant social proximity increased the likelihood participants would buy an Apple watch. And in another experiment involving President's Choice packaged coffee, participants who read a negative review by a socially distant reviewer demonstrated a 6 to 12 percent boost in their interest in purchasing the product.

"Marketers have generally assumed that when people say positive things, purchase interest increases, and when people say negative things, purchase interest decreases," says Dr. Cavanaugh, who co-authored the study with Boston College's Dr. Nailya Ordabayeva, and UBC Sauder Professor Dr. Darren Dahl. "But when negative comments come from a socially distant source, a negative review actually increases purchase intentions—and that is a game changer."

Dr. Cavanaugh explains that when we read negative reviews coming from someone we perceive as socially closer (e.g., maybe they share a , they are a fellow student, or they like the same music) we tend to listen and accept what they have to say, causing us to downgrade our assessment of the product, as well as our willingness to purchase it.

"But when that negative review comes from a socially distant person, it is an entirely different story. You will scrutinize the source of the review and look for reasons not to believe it, specifically when it's an identity-relevant brand," she said.

Bad reviews are still bad for lesser-known brands

Businesses shouldn't get too comfortable with poor reviews, however.

Researchers observed that if consumers don't personally identify with the product or brand—if it's a toilet brush as opposed to an Apple computer or Timbits, for example—they won't be driven to defend it, so poor reviews will still pack a punch.

Dr. Cavanaugh says the research reinforces the importance of forging strong relationships with customers, and cultivating that coveted connection to people's identities.

In terms of managing online reviews, she also points to the importance of displaying reviewers' profiles and histories so readers can more easily assess their social proximity and any pattern of negative reviews. And advises that, sometimes, doing nothing (i.e., allowing those negative reviews to be seen) is better when it comes to of identity-relevant brands.

This study was published in the Journal of Marketing.


Explore further

A new strategy for counteracting the impact of negative online brand reviews

More information: Nailya Ordabayeva et al, The Upside of Negative: Social Distance in Online Reviews of Identity-Relevant Brands, Journal of Marketing (2022). DOI: 10.1177/00222429221074704
Journal information: Journal of Marketing

Citation: Can bad reviews be good for business? New research says yes (2022, April 7) retrieved 28 June 2022 from https://phys.org/news/2022-04-bad-good-business.html
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