Why do consumers read reviews?

The power of customer reviews cannot be overstated. Our research found that 84% of consumers trust reviews from other consumers. And in our industry, more people use reviews to decide which financial products to use than asking an adviser.*

Those stats are certainly impressive, and show that companies really need to take their feedback seriously. But you might still be wondering – why do so many consumers read and trust reviews in the first place? Here's five reasons why consumers read reviews.

1. Validation and trust

Reviews offer a collective voice that validates or challenges a particular product or service. As our research shows, consumers trust the collective wisdom of their peers, preferring to find assurance in numbers rather than simply relying on what the company say themselves.

2. Real-world experiences

Reviews provide valuable insights into the real-world experiences of other consumers. Unlike polished adverts showcasing everything that’s good about a product, reviews reveal the all-important finer details – the pros, cons, and unexpected nuances.

3. Risk mitigation

Purchasing a product or service usually involves an element of risk – the risk of dissatisfaction, disappointment, or even regret. Arguably, such risks are only heightened when considering the purchase of a financial services product. By reading reviews, consumers can mitigate this risk by learning from the experiences of others.

4. Quality assurance

With so much choice available on the market, reviews act as quality assurance guides, helping consumers find the very best products and services. Whether it's a five-star rating or a cautionary tale, reviews contribute to the ongoing challenging of finding products that are better than the competition. Reviews help to differentiate products and services when there’s little difference on price, too.

5. Saved time

Life is fast-paced, and reading reviews can make the decision-making focus much faster. Rather than engaging in extensive research or trial-and-error, consumers can save time by tapping into the collective knowledge of reviewers, and quickly assess whether a product or service will be likely to meet their needs.

Summary

It’s clear why so many consumers read and value reviews from other consumers. From seeking validation to minimising risks and saving valuable time, it’s no wonder consumers see reviews as a key part of their decision making process. In fact, as a final nugget from our research, 69% of consumers are likely to change their mind after reading reviews.*

So reviews aren’t just a piece of text or a rating out of five. They act as a validator, a guide, and a testament to the power of customer feedback.

*Smart Money People research, October 2022