Article: Thursday, 4 July 2024
Positive online reviews and ratings are known to help to convert enquiries into sales, but it appears that the presentation style of low ratings also has an effect on your customers’ experiences and your user engagement. This comes from research by Dr Christophe Lembregts of Rotterdam School of Management, Erasmus University (RSM); Prof. Arne De Keyser of EDHEC Business School; and Dr Jeroen Schepers of Eindhoven University of Technology. They wrote about their research in the Harvard Business Review in April. In their article, How Ratings Systems Shape User Behaviour in the Gig Economy, the researchers describe how online ratings for platforms like Uber and Upwork give not only a picture of past performance, but can also set expectations and influence the quality of transactions between buyers and sellers, suppliers and consumers, and service providers and users.
Their original research was published in the Journal of Marketing Research in July 2023 as Is It as Bad as It Looks? Judgments of Quantitative Scores Depend on Their Presentation Format.
It describes two kinds of ratings information; incremental scores that give a detailed view of every reviewer’s marks, and averaged scores that present an aggregation of all ratings. The researchers found that user experience is affected by the way that low scores are presented – and this is something that organisations should pay attention to when deciding whether to use incremental or average systems for publishing ratings.
“We wanted to understand how ratings are presented affects the way users perceive the results, and what they do with the information,” said Dr Lembregts. The researchers wondered whether platforms could use the presentation format to lessen or increase the impact of low ratings.
They undertook nine experiments which showed how users’ experiences and behaviour is influenced by the way low ratings are communicated, and what review platforms should consider when choosing how to display ratings.
Three key takeaways from the research on how the presentation of online ratings affects user behavior and engagement are:
The way ratings are presented, whether as incremental scores (detailed view of each review) or averaged scores (aggregation of all ratings), significantly affects user perception. Aggregated scores can lessen the impact of a sudden negative rating, making the overall performance seem more stable.
Presentation formats can distort users' perceptions of the true performance of a service or product. Incremental formats highlight individual low or high scores more prominently, affecting user decisions, customer churn rates, and engagement on platforms.
Organizations should strategically choose how to present ratings based on their goals. Aggregating scores can mask occasional low ratings and maintain overall positive perceptions, while incremental formats can highlight areas needing improvement and prompt quicker responses to negative feedback.
They documented what happens when a generally well-performing entity suddenly gets a negative score. It turns out that if it’s shown in a cumulative format then the negative score makes less impact on the general performance than you might think, compared with an incremental or combined format.
And conversely, when a something that usually gets poor reviews for performance suddenly gets a positive score, it’s seen as less positive if it appears in the cumulative format than if it were shown in incremental or combined format.
“The cumulative format distorts peoples’ perceptions of the underlying real score,” said Dr Lembregts. “We’ve shown that presenting scores in alternative formats might affect the results of marketing activities – they might produce more customer churn, or change the choices customers make; they might have an effect on the rate at which a new technology is adopted, or the success of a new product. And they can influence the amount of user engagement on peer-to-peer platforms.”
The article in Harvard Business Review gives examples when this phenomenon works in the organisation’s favour, and when it might provide information that needs to be acted upon quickly to prevent potential customers from avoiding the service – these are subtleties of the effect of presenting scores in different formats. It points out that some operators working on a platform might not recognise there’s a low rating if the results are aggregated – two high scores and a low score gives an OK average that might not flag up a problem that needs to be addressed.
The paper Is It as Bad as It Looks? Judgments of Quantitative Scores Depend on Their Presentation Format was published in July 2023 in the Journal of Marketing Research.
Harvard Business Review wrote an article about it. You can read that here: How Ratings Systems Shape User Behaviour in the Gig Economy
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Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s top-ranked business schools. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who can become a force for positive change by carrying their innovative mindset into a sustainable future. Our first-class range of bachelor, master, MBA, PhD and executive programmes encourage them to become to become critical, creative, caring and collaborative thinkers and doers.
