Every marketer is aware of the rise of online reviews and other sources of peer-to-peer information, but many neglect this trend and market products much as they did a decade ago, according to a new report by the Harvard Business Review.
The peer-to-peer rise has given some companies a leg up over well-established competition, according to the report.
Companies as varied as HTC, Hyundai, Euro-Pro (which makes vacuums), and Roku (set-top streaming) have benefited from a shift in the way many consumers obtain and process product information.
In the past, buyers typically made relative comparisons (“Is Brand A better than Brand B?”) or went by the maxim “You get what you pay for.” They were largely dependent on information provided by manufacturers in the form of marketing.
Today, thanks primarily to user-generated reviews and people’s tendency to consult social media friends about purchases, buyers have other options. The wealth of peer-to-peer information and the unprecedented availability of expert opinions give them access to what’s known as absolute value — a rich, specific sense of what it’s like to own or use the goods they’re considering.
“We believe that many companies need to dramatically shift their marketing strategies to account for the rising power exerted on future customers by the opinions of existing customers,” said authors Itamar Simonson and Emanuel Rosen.
Research by Michael Luca, of the Harvard Business School, suggests that in cities where large numbers of diners rely on Yelp reviews, independent restaurants tend to benefit and chains and franchises often see their revenue decline.
(The full report is only accessible to Harvard Business Review subscribers.)