Category: online reviews

Consumers Will Avoid Purchasing, If They Don’t Like The Parent Company Behind The Product

A newly released study from Weber Shandwick explores the connection between corporate and product brands. Based on a survey of 1,375 consumers and 575 executives of $500MM+ companies from four global markets (Brazil, China, the US and the UK), the study shows that perceptions of a corporate brand can truly affect product purchases:

  • 70 percent of consumers say they avoid buying a product if they do not like the company behind the product
  • 40 percent stop purchasing the product when they see a disconnect between the product and parent brand

The web plays an integral role in this delicate decision-making process. Of those consumers surprised to find out that a product they like is made by a company they do not like:

  • 34 percent will go online to find what other products the company makes
  • 19 percent share or forward information about the company
  • 17 percent make negative comments about the product or company to others
  • 15 percent post a comment online about the brand and the company

Where do consumers get these ideas about corporate brands? The web’s influence is almost as strong as offline word of mouth:

  • Nine in 10 (88 percent) say they are influenced by what people say
  • Eight in 10 point to online reviews (83 percent) and search results (81 percent)

Consumer opinions have a direct impact on sales and also on companies’ market value. Interviewed executives said they would attribute 60% of their firms’ value to these companies’ reputation. In other words, online buzz can have an impact on a company’s evaluation. But reputation is a holistic concept–whether online or offline, at the product or corporate-level, it needs to be consistent and positive. 

Posted via email from dotwom’s posterous

Study Shows Social Media Has More Impact Than Paid Media on Car and Technology Sales

S. Radoff Associates, a NY-based research company, just released a report about the impact of word of mouth on large-ticket item purchases. The results remove any shadow of doubt on word of mouth’s impact on tangible business results. And we understand that social media drives sales for considerable investments in cars and technology, not just CPG products.

The study delves into large purchases made in the past year and the information sources that shaped brand choices. The results show that one-half of consumers say word of mouth was a key influencer for car (50 percent), technology and electronics (49 percent) product choices they made in the past year.

We know from Keller Fay Group that much of word of mouth actually takes place offline. Interestingly, these two categories are pretty balanced in terms of their source of buzz. In fact, online and offline word of mouth were just as likely (29 percent, respectively) to influence technology and consumer electronics purchases.

Online reviews are at the source of online buzz. Consumers say online reviews influenced nearly one-quarter of technology and electronics purchases (24 percent) and 17 percent of car purchases made last year.

The most counterintuitive factoid from the study is that consumers are four times more likely to be influenced by social media than paid media for their car purchases made in the past year (21 percent vs. 5 percent). Social media has been more influential than paid media for technology purchases as well (26 percent vs. 7 percent).

Considering the typical budget spending on advertising vs. social media, these numbers signal the need to seek efficiencies in our integrated marketing plans for 2011 and beyond. Marketers planning for automotive and consumer electronics/ technology brands can shift dollars from traditional advertising budgets to social media and focus on elevating consumer opinions and customer experience. 

Posted via email from Speaking of Social Media