Reputation Management: Effects of
Negative Online Reviews on
Consumers
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A study on the effects of negative business
reviews on consumers’ product attitude, risk
perception, and purchase intention shows that
the rapid growth and proliferation of electronic
word-of-mouth (eWOM) created a new threat
to Internet marketers.
According to the study, this occurs as paid
online reviewers flood sites with service and
product reviews that deter and confuse
customers. Furthermore, the findings revealed
that Internet Water Army Attack (IWWA) —
which refers to a hired reviewer’s post aimed at
ruining the reputation of certain businesses —
is effective in changing a customer’s attitude
and intention in buying and increasing risk
perception towards a product.
Given that negative business reviews can
immediately
turn
customers
away,
understanding how to deal with negative
reviews online will allow you to develop a good
reputation management strategy. Furthermore,
it will provide you with insights into improving
your brand and how people see it.
Effects of Negative Business Reviews
Consumers today use search engines like Google
for research before making a purchase. Their
research usually includes comparing brands,
products, and prices online. During their search, it
is highly likely that they would encounter both
positive and negative reviews of products and
services.
In general, online reviews affect 67.7% of
consumers’ purchasing decisions. According to a
study, online reviews also differ depending on the
online platform. While positive reviews lead to
increased sales and better search engine ranking,
negative online reviews pose detrimental effects
on businesses, including:
Loss of Revenue
Bad reviews on Google, Facebook, and Yelp
significantly affect revenue. For one, a business
with a 1- to 1.5-star rating reports 33% less
revenue than an average business. Interestingly,
Forbes mentions that 94% of consumers steer
away from a company that gets bad review