It’s a bit of an understatement to say that consumers have come to rely on the internet. For everything from work to entertainment, there’s an online aspect that usually makes things easier or more convenient.
This is especially true when it comes to shopping. Online sites like Yelp, ConsumerAffairs and TripAdvisor, and forums such as those found on Amazon and even Reddit, have made making an informed purchase that much easier. So, should these sites pay consumers for their review insights?
While your curiosity might be piqued at the idea of being paid to share your opinion, a new study shows that paying users to encourage them to write reviews is probably a bad idea. Researchers from the University of Colorado, Santa Clara University, and Tsinghua University found that many users rejected the idea of being paid for reviews, especially if they’re socially well-connected and their behavior could be viewed negatively by their peers.
"Nobody wants to be seen as a paid shill for brands, so the users with more friends and followers, who were likely more influential and wrote more originally, are the ones who stop writing. A real double-whammy," said researcher Xiaojing Dong.
Huge decline in user reviews
The study looked at a social shopping platform in China that sought to pay users roughly the equivalent of 25 cents per review, which they could apply to purchases from affiliated sellers on the site. Findings showed that after the payment program was put in place, the number of user reviews declined by over 30% in a single month, which came as a huge shock to the researchers.
“The familiar ‘Law of Supply” that implies increases in response to higher prices does not seem to hold true when it comes to paying for reviews on a social platform,” remarked researcher Yacheng Sun.
But what caused the mass exodus of users? The researchers theorized that much of the reason lay in how users wanted to be seen by those around them. Sure enough, when the group separated users into “socialites” (over five friends on the network) and “loners” (no friends on the network), they found that reviews dropped by 85% amongst connected users, from 0.4 reviews per month to 0.06 reviews per month.
On the other hand, loners who did not have the social capital to lose from taking money for reviews increased their number of reviews per month – but only marginally, from close to zero reviews each month to 0.03 reviews per month. Unfortunately for these kinds of platforms, the socialites make up the vast majority of traffic and reviews, which may explain the overall drop of 30%.
The researchers point out that certain models have been shown to be effective when it comes to incentivizing reviews. While there is room for improvement, they say that it might be safer to keep the status quo.
"Our results support the approach of industry leaders like Yelp or Amazon, who do not compensate for reviews. In fact, they tap into the intrinsic motive for social recognition through status badges for frequent contributors. There may be still 'under the radar' ways to pay only the less socially active users for their reviews, but such targeting can be risky as the heavy reviewers may perceive it to be unfair and therefore stop writing reviews, if and when they learn about it," said researcher Shelby McIntyre.
The full study has been published in Marketing Science.