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Incentivized reviews don’t improve – and may even hurt – business

Reviews induced by incentives were more likely to contain information about lower quality experiences.

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New research focused on whether incentivizing would-be online reviewers to post reviews can make a difference for the seller has shed new light on the role those reviews play in sales and revenue outcomes.

Researchers worked with Airbnb to conduct a large-scale and costly experiment to find out just how those incentivized reviews impact day-to-day marketing. They found that although incentivizing reviews does lead to an increased number of reviews, the induced reviews tend to be more negative in nature, and have no impact on the number of nights sold or total revenue.

The study published in the INFORMS journal Marketing Science, “Do Incentives to Review Help the Market? Evidence from a Field Experiment on Airbnb,” is authored by Andrey Fradkin of Boston University and David Holtz of the University of California, Berkeley, and the MIT Initiative on the Digital Economy.

The Airbnb experiment divided participants into two groups: treatment and control. The treatment group was sent an email offering them $25 Airbnb coupons in exchange for a review if they had not already posted a review within the typical eight or nine days after checkout. The control group was sent an email simply reminding them to leave a review with no financial incentive offered.

“We found that reviews induced by incentives were more likely to contain information about lower quality experiences,” says Fradkin. “We also found that when compared to non-incentivized reviews with the same star ratings, incentivized reviews corresponded to worse guest experiences. In other words, a seller may have received the same star rating from both study groups, but the incentivized guest was more likely to post a negative review, while upholding an inflated star rating.”

“While the incentivized review program impacted the number and type of reviews left by guests, it had neutral-to-negative impacts on the actual business outcomes of the platform and its sellers,” says Holtz. “Incentivized reviews did not affect the total quantity (nights) sold for study listings, but they did cause a change in the composition of those transactions. More to the point, incentivized listings led to more transactions, but those transactions lasted fewer nights on average. Thus, a poorer match.”

The study found that as a consequence, the revenue impacts of incentivized reviews did not represent either a positive or negative material change. Incentivized reviews failed to improve transaction quality, and according to some measures, resulted in worse matches. At the same time, the incentivized treatment did not lead to higher complaint rates or reduced likelihood of repeat business.

“Ultimately, we found that while reviews do play a meaningful role in the overall marketing efforts for online sellers, incentivizing those reviews may not deliver the results many would assume,” says Fradkin.

Strategies

Visual design of product can hold symbolic meanings to consumers – study

Simplicity of the product package aligns with consumers’ default assumption that store brands invest less in product quality. Thus, the simplicity of store brand packaging likely signals a lack of investment in the product rather than few ingredients and product purity.

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Researchers from Texas Christian University, University of Illinois Urbana-Champaign, and University of Georgia published a new Journal of Marketing article that examines the consumer trend towards minimalist packaging in consumable products.

The study, forthcoming in the Journal of Marketing, is titled “Symbolically Simple: How Simple Packaging Design Influences Willingness to Pay for Consumable Products” and is authored by Lan Anh N. Ton, Rosanna K. Smith, and Julio Sevilla.

Designing products is both an art and a science. Companies have found that bringing together many visual elements in product design—with multiple colors, text, and illustrations incorporated in the packaging—can lead to enhanced brand engagement. However, in the last few years, consumers have increasingly desired more minimalist aesthetics.

The new Journal of Marketing study examines this consumer trend toward minimalist packaging in consumable products. The research team theorizes that consumers tend to assume that the simplicity of the product package suggests that the product contains few ingredients, which in turn increases perceived product purity, defined as the belief that the essential ingredients of the product are undiluted. With customers increasingly seeking product purity, there is an increase in a willingness to pay for consumable products with simple packaging.

The study defines simple packaging design as the extent to which a product package contains few design elements, which lack detail, are similar to one another, and are arranged in regular ways. Complex packaging design refers to the extent to which a product package contains many design elements that are highly detailed, different from one another, and arranged in irregular ways.

The researchers examined over 1,000 consumable product packages from the largest supermarket chain in the U.S. and find that the simplicity of the packaging design is positively associated with price. As Ton explains, “in a series of experiments, we show that the visual design of a product can hold symbolic meanings to consumers. Specifically, although there is no information about the product’s composition on the package, we find that consumers assume that the simplicity of the product package signals that there are few ingredients within, which enhances perceived product purity.”

However, simple packaging does not always enhance consumers’ willingness to pay. Smith says, “we find that store-brand products are not likely to experience the same benefits of simple packaging as non-store brand products. This is likely because the simplicity of the product package aligns with consumers’ default assumption that store brands invest less in product quality. Thus, the simplicity of store brand packaging likely signals a lack of investment in the product rather than few ingredients and product purity.”

Sevilla adds that “we also find the preference for simple packaging depends on consumers’ goals. When consumers have a health goal, they are more likely to pay for a product with simple packaging. This is because simple packaging conveys that the product contains few ingredients and high product purity, attributes that tend to be associated with healthy products. By contrast, when consumers seek to indulge, they are less willing to pay for products with simple packaging. This is because complex packaging signals many ingredients and low product purity, attributes that tend to be associated with unhealthy and, by extension, tasty products.”

This research extends the understanding of consumer interest in minimalist aesthetics by showing conditions under which design simplicity can be less desirable. Visual simplicity often conveys the idea of “less is more,” but there are situations when it can simply signal “less is less.” It also broadens the understanding of the concept of purity in the context of consumer research. While explicit illustrations, such as a drawing of a mountain spring, can enhance consumer judgments of product purity, product purity can be inferred from more subtle visual cues (or even the lack of visual design elements). Relatedly, the study digs into the concept of product purity, which can hold a variety of meanings, and differentiates purity from its related construct of naturalness, which typically refers to products that are not man-made.

This research provides several insights for chief marketing officers:

  • Simplifying package design can be an effective way for brands to visually (and nonverbally) communicate key product information to consumers. Simple packaging can lead consumers to infer that the product has fewer ingredients and is purer—thereby enhancing their willingness to pay.
  • Aligning the visual design of the product package with ingredient information is essential to make a positive impact on consumers.
  • Managers may consider the specific brand when using simple packaging because positive inferences are less likely to occur for store-brand products.
  • When managers want to signal that their products are indulgent, opting for more complex designs could be more effective.

This work could be extended to durable goods such as technology products. For instance, Apple products are well-known for their simple packaging and are often seen as easier to use than their competitors. It may be fruitful to explore how inferences derived from simple packaging of technology products align or differ from those of consumable goods.

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Strategies

Pictograms sometimes have an additional benefit: Inducing optimism

If the same icons are grouped together in the pictogram, a consumer will feel more favorably and exhibit an optimism bias about their own chances.

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Sometimes, how the information is presented is as important as the information itself. Graphics, icons, and pictograms are increasingly popular methods of presenting information to consumers in direct, memorable, and easily understandable ways.

A team of researchers led by Rensselaer Polytechnic Institute’s Gaurav Jain, Ph.D., assistant professor of marketing in the Lally School of Management, found that pictograms sometimes have an additional benefit: inducing optimism.

In research recently published, Jain and his colleagues found that frequency pictograms, which convey proportions and probabilities, induce optimism in consumers when they are presented in a sorted way. In other words, if the same icons are grouped together in the pictogram, a consumer will feel more favorably and exhibit an optimism bias about their own chances.

The findings contribute to the field of attribute framing, which refers to highlighting characteristics in a positive or negative light. For example, a consumer may be more inclined to purchase an item marked as $10 off of $30 rather than one marked as $20. Previous research has focused on textual rather than pictorial attribute framing. Since frequency pictograms are “the most common graphical representations of quantitative information,” Jain’s research has potentially wide applications.

“Sorted verses unsorted pictograms should be used strategically, depending on whether the messaging is promotional or prohibitive. If eight out of 10 dentists endorse a toothpaste, for example, a sorted pictogram would make consumers feel favorably about the toothpaste. However, when depicting that 8% of children alive today will die if current smoking trends continue, an unsorted pictogram would be appropriate,” Jain said.

“Dr. Jain’s research provides valuable insights for communicators,” said Chanaka Edirisinghe, Ph.D., acting dean of Rensselaer’s Lally School of Management. “It also opens the door to explore further possibilities. How does more than two categories represented in the pictogram affect the findings? What role does the number of icons, their size, or using multiple colors within one icon to show fractional proportions play? With this research, Dr. Jain adds to our understanding of people’s perceptions according to how information is presented.”

Jain was joined in research by Sunaina Shrivastava of Manhattan College and Zeynep Ece Tolun of Rensselaer.

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Strategies

5 Ways to support underappreciated professionals

You can show your appreciation for deserving workers such as your favorite school custodians or office maintenance staff members in numerous ways, including these suggestions.

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Unsung heroes make everyday living possible. They work behind the scenes and tackle some of the most demanding work imaginable, such as maintaining facilities and keeping them in tip-top condition.

You can show your appreciation for deserving workers such as your favorite school custodians or office maintenance staff members in numerous ways, including these suggestions from Rubbermaid Commercial Products, supporters of cleaning and maintenance professionals nationwide.

Write Thank You Notes

In today’s digital world, handwritten notes are a novelty. The times may be changing, but the impression a thoughtful handwritten message leaves behind hasn’t changed at all. Keep a supply of blank notecards so you can offer notes to those who make a difference in your life. The sentiments don’t need to be long; a simple expression of gratitude is enough to brighten someone’s day.

Participate in Appreciation Events

You might receive information from local schools or businesses about opportunities to support maintenance staff, such as hosting meals or helping with cleanup in classrooms or offices. Finding opportunities to support underappreciated custodial staff can allow community members to show thanks in meaningful ways.

For example, Rubbermaid Commercial Products is hosting a Behind the Scenes of Clean Campaign this fall to elevate, recognize and thank cleaning and facility maintenance professionals who are among the first to arrive for work each day. The campaign includes more than 40 events globally where community members can engage with and personally thank custodians who are making an everyday difference behind the scenes.

Recognize Milestones

Often, those in custodial roles blend into the fabric of everyday life. They’re rarely the focal point of celebrations, but often make it possible for others to honor special occasions. Make a point to know about the underappreciated professionals in your life, so you can recognize events like birthdays, work anniversaries and other dates that hold special personal meaning.

Do Your Part

Think about what small steps you can take to make unsung heroes’ jobs easier. That might mean picking up after yourself or cleaning up a mess in your workspace. It could involve wiping down your table after lunch. Little gestures can add up to a big difference.

Lead By Example

You don’t need to wait for others to join you in recognizing workers whose impacts are made behind the scenes. Speaking up and taking action can serve as a positive example for those around you. You can even take the lead and organize an effort to recognize individuals who rarely receive thanks, such as the custodian at your office or the janitorial team at your favorite retailer.

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