Peer reviews get five-star rating: research

Research by Monash Business School shows consumers are more favourably swayed by peer reviews on social media sites when purchasing movie tickets or a hotel stay.

The explosion of social media websites such as TripAdvisor, Zomato, Rotten Tomatoes and Booking.com has given rise to an ever growing number of amateur critics – all keen to share their thoughts on the hottest hotels, movies and restaurants to future patrons.

These peer reviews have transformed consumer behaviour in the 21st century to the extent that people will avoid seeing a new Hollywood movie or staying at a hotel that receives negative customer feedback. This could even be despite expert reviews to the contrary.

New research by Monash Business School shows that when consumers were looking to purchase an ‘experience service’, such as a movie ticket, food or a haircut, they were more favourably swayed by peer reviews on social media sites.

However this behaviour changed when it came time to book a tax accountant, lawyer or doctor where expert reviews had more credibility.

Conducted by Professor Hean Tat Keh from the Department of Marketing at Monash Business School and Professor Jin Sun from UIBE Business School in Beijing, China, this study reinforces the need for businesses to carefully decide whether to emphasise peer vs expert reviews in promoting their services.

“If one of my friends likes a movie, then I am more likely to watch it and not rely so much on what the professional movie critics have to say. Our studies showed that people want to know what other regular moviegoers thought of the movie before buying a ticket,” Professor Keh said.

“The so-called expert reviews may not matter as much for experience services. For example, Uber Eats uses celebrities to endorse their food service. While this is OK, consumers will bypass this smokescreen and check what other regular customers have to say about that restaurant’s food.”

The researchers conducted three studies with participants in China and the USA to investigate the extent to which peer and critical reviews influenced consumer decision-making. The research was recently published in the Journal of Service Research.

In the experiments, participants were asked to evaluate a series of experience versus credence services, such as a hotel versus a dentist, with online comments posted from either consumers or experts.

Findings showed people relied on specialised knowledge from experts when it came to credence services like superannuation or hospital care, simply due to their own knowledge gap and didn’t trust unqualified peer reviews.

“When consumers do not have confidence in evaluating such credence services, then they are more likely to rely on expert reviews,” Professor Keh said.

According to Professor Keh, findings from this research explained why credence service firms often sought third-party reviews for their products – like financial institutions getting accreditations or ratings from certified parties.

“If your business provides a credence service, then companies would be better off having endorsements from experts,” Professor Keh said.

“These expert reviews carry more weight for credence services among consumers and are a very strong endorsement. However, if consumers think that this endorsement is not authentic or independent, then they might not trust the brand.”

Interestingly, the research showed that if consumers were exposed to mixed reviews, then the negative expert opinion would be more influential than the positive peer review for both the experience and credence services.