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Wall Street Oasis » Blogs » DonVon's blog
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Internet Reviews: A Grain of Salt, or a Kilo?
 

DonVon's picture
DonVon
      IB
 
 
(King Kong, 1,915
 
Points)
 on 4/16/12 at 7:00pm
yelp.jpg

Happy Monday everyone -- hope you all at least had "some" time off this past weekend to enjoy.

So I like to buy reasonably expensive jeans: 7 For All Mankind, Adriano, Rock and Republic, etc. Unfortunately, I am only 5'10'', and as some of you may know, these jeans come in a standardized length, with usually a 34'' inseam. That's much too long for me, and if I'm gonna spend $150 on a pair of jeans, I'm not going roll them up and look like a dunce, so I get them tailored every time.

There are a lot of really bad tailors out there, and since I've been moving around a lot recently, I've had to find a new tailor for jeans (among other things) every year or so. The tailor I'm currently using is absolutely the best I've ever worked with, and it was no surprise that she has absolutely stellar Yelp! and Google reviews...

From BI: "When it comes to swaying consumers, nothing beats word of mouth. That’s because, 92 percent of people trust recommendations from friends and family above all other forms of advertising when making a purchase decision, according to a new study. That number was up nearly 20 percent from 2007."

Link to article

The era of tons of free information about anything, especially consumer products and services, seems to have really empowered consumers and facilitated greater degrees of competition.

Personally, I use Yelp!, Google reviews, and Amazon reviews religiously before making any sort of purchasing decision. I want to make sure I'm getting the best service, or that I'm buying the best product on the market in my target price range. I'm also someone who almost never watches television, so the main advertising avenue that reaches me is by way of the internet, where advertising is _more_ targeted and _less_ "in your face" as it would be on television.

This leads me to reading internet reviews of products all the time, and when I make the decision to purchase something or use a particular service, I always wonder how in this day and age a company or product can survive after its reputation has been marred by negative online reviews (or even in the absence of reviews).

Think about it: when was the last time you bought a product on Amazon where upon scrolling to the bottom of the page, you see "No one has reviewed this product yet, be the first"? I can't think of such a time, nor can I think of purchasing a product that had below 4 of 5 stars (there could be exceptions...books about politics come to mind, for example, but that's more of a qualitative review anyhow). In reality, products with 3.5 stars might be totally fine -- hell, they might be better than 4-star products, but in many cases, a mediocre aggregated review rating is more than enough to convince me that I should be looking elsewhere.

This is true of many things -- if a movie has a weak MetaCritic score, I probably won't watch it, etc etc etc.

But there are problems with this approach, the glaring one being that people who have positive experiences with products and services are far less likely to voice their opinions than those who have negative experiences. Amazon and Yelp! have tried to counteract this phenomenon by creating some incentives for reviews, thereby increasing the flow of positive reviews instead of strictly negative ones, but I feel that the bias toward the negative in internet reviews is still a problem.

What do you guys think? How likely is it that an internet review affects your purchasing decision? How can businesses in particular who do not maintain a following on Yelp or Google survive in this era? Word of mouth is becoming a far less common method of transmitting information since most of us spend the majority of our waking hours on the net.

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Comments

go.with.the.flow's picture

+1 I know Amazon deletes

go.with.the.flow
      CD
 
(King Kong, 1,158
 
Points)
 on 4/16/12 at 7:19pm

+1
I know Amazon deletes negative views sometimes and if yelp does that too that would be a disservice to its fans.

|| But feeling good and enjoying life are prerequisites to success, not by products of it- Midas Mulligan Magoo ||

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In reply to go.with.the.flow
DonVon's picture

go.with.the.flow wrote: +1 I

DonVon
      IB
 
 
(King Kong, 1,915
 
Points)
 on 4/16/12 at 7:25pm
go.with.the.flow:

+1
I know Amazon deletes negative views sometimes and if yelp does that too that would be a disservice to its fans.

I know it makes sense for a lot of Amazon's postings because people won't actually review the product. In the unlikely event that people have trouble with Amazon's shipping services or the item is damaged, they'll just write a 1-star review that has absolutely nothing to do with the product. Perhaps these reviews should be removed, and it's funny that it works in Amazon's favor, as they have become the de facto product review site despite that not even being their specialty. Funny how that works sometimes....

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WallStreetOasis.com's picture

I definitely lean heavily on

WallStreetOasis.com
      EN
 
 
(Human, 12,207
 
Points)
 on 4/16/12 at 7:44pm

I definitely lean heavily on the online reviews on Amazon as well. What is funny, is this is not exactly what we've seen in our Company Database (where WSO members post Company Reviews, Interview Insights and Compensation Data by company) -- while there have been some largely negative reviews, the majority have been positive.

I feel like if you ask detailed enough questions it is usually pretty easy to see through why exactly that person wrote a bad review. Do they sound like a moron? - maybe their boss thought the same thing...if a person is able to give a balanced review, I feel like it has a much greater impact on the person looking to buy a product or learn about a company.

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Addinator's picture

Well, I think that word of

Addinator
      AM
 
 
(Senior Gorilla, 958
 
Points)
 on 4/16/12 at 8:08pm

Well, I think that word of mouth is just the old expression for user reviews. I mean they are essentially the same thing. Look at something like angle's list which reviews local businesses or contractors in your area. Personally, I find Amazon reviews absolutely essential before I buy something. I'll even just do a google search to see if whatever product I'm looking at has favorable (or negative) reviews from random websites or communities. I also think people are slowly becoming less resistant to posting favorable reviews of places. I know especially when it comes to restaurants (I love open table, Urban Spoon and even yelp for restaurants) people seem to always want to talk up their favorite local nightlife or date spot. Obviously those are more subjective than others and foodies are a special group sometimes, but nonetheless it is something i've notices. It is funny, I didn't notice until you mentioned it how critical of a product I become when I see that it only has 3.5 or 4 out of five stars.

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In reply to Addinator37
DonVon's picture

Addinator37 wrote: Well, I

DonVon
      IB
 
 
(King Kong, 1,915
 
Points)
 on 4/16/12 at 8:26pm
Addinator37:

Well, I think that word of mouth is just the old expression for user reviews. I mean they are essentially the same thing.

I think I disagree actually. That certainly might apply to "our" generation, since we're very comfortable using the internet for pretty much all of our information. In fact, I think user reviews are more powerful for most of us than the traditional "word of mouth" method -- I can think of several times when a friend has recommended something, I've researched it online, and despite respecting my friend's opinion, chose to not buy it based on user reviews.

For older generations, I think a face-to-face conversation about a product is a more powerful tool. But I think the two are pretty different; it's hard to aggregate word of mouth reviews, whereas user reviews give you the bigger picture, which is what this generation of info-mongers wants.

Addinator37:

It is funny, I didn't notice until you mentioned it how critical of a product I become when I see that it only has 3.5 or 4 out of five stars.

Someone agrees, so this must be fact! But seriously though, my first reaction when I see 3.5 stars is "oh my God what is wrong with this product?", which in most cases causes me to automatically skip to the next alternative without even reading further into the details. I bet CEOs look at their company's products on Amazon, see 3.5 stars, and groan in pain, knowing that sales plummet significantly for that fact alone.

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KingEastwood's picture

I do not put too much trust

KingEastwood
      IB
 
(Monkey, 50
 
Points)
 on 4/16/12 at 11:11pm

I do not put too much trust in online reviews or comments anymore since a friend who has done a part-time job in a marketing/advertising firm (not gonna list the name, but I can assure you that it's a fairly big one) told me what her job was all about.

It basically involved going on websites or forums related to the clients products (a tech company producing cameras, projectors etc.) and writing reviews how awesome their products are. I do not know if it is also "fair" business practice to write negative reviews about competitors products, but next time you see a 5 star rating you might want to keep in mind that it might have been inflated.

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analyst-therapist's picture

You forget the most important

analyst-therapist
      IB
 
(Senior Monkey, 94
 
Points)
 on 4/17/12 at 8:18am

You forget the most important part of the post, who is your tailor??

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In reply to analyst-therapist
DonVon's picture

analyst-therapist wrote: You

DonVon
      IB
 
 
(King Kong, 1,915
 
Points)
 on 4/17/12 at 8:25am
analyst-therapist:

You forget the most important part of the post, who is your tailor??

I'd be glad to recommend her to anyone located in Charlotte. Word of mouth recommendations are the strongest, you know. ;-)

KingEastwood:

I do not put too much trust in online reviews or comments anymore since a friend who has done a part-time job in a marketing/advertising firm (not gonna list the name, but I can assure you that it's a fairly big one) told me what her job was all about.

Yeah, I have always wondered about this...but those types of reviews can't represent a large chunk of reviews for most products, right? Like, if a product has 4 reviews and it's 5-star overall, I'm still skeptical; if it has 250 reviews and 4.5 overall, even if some of those are artificially inflating it, that effect probably isn't so great. I could be totally wrong, but it seems like marketing companies could spend their time more proactively instead of posting on forums and review sites...

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Addinator's picture

It's also a question of how

Addinator
      AM
 
 
(Senior Gorilla, 958
 
Points)
 on 4/17/12 at 9:03am

It's also a question of how much you trust the source. If the wall street journal recommends a hot new product (lets say the new ipad) and Apple_lv3r on some random review site recommends it, I would think that even older generations would tend to rely on the WSJ. Though I think you may be correct in that older generations do tend to trust word of mouth simply because they are more conditioned towards it.

It is interesting how you bring up marketing companies posting on review sites. I remember a few years back when I was a member of some tech forums that Nvidia used to give out their newest graphic chips and motherboards to select members who would then post reviews which were favorable to whichever products they were looking to push. Obviously that is somewhat underhanded especially if the reviewers didn't disclose that they were given stuff. Granted, tech review sites normally get stuff way ahead of time just to review but these were actual members of the forums who would then go and post their own 'independent' reviews etc. I'm sure more of this goes on than I realize but I think it is interesting how in the internet age guerrilla marketing (guerrilla reviews?) is so influential and prominent, even more so than it was before.

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AVPGuerilla's picture

First off, before I get

AVPGuerilla
      IB
 
 
(Senior Gorilla, 886
 
Points)
 on 4/17/12 at 5:48pm

First off, before I get snarky, you have a good point. I rely heavily on internet reviews when making large dollar online purchases, and I never, ever post any good experiences I've had with said product. Because people are more likely to post negative feedback, reviews do serve their purpose though.

Now onto my more typical snark: what the fuck are you buying $150 jeans? You must either be unemployed and spending your folks' money, or... Well I can't think of any other reason a man would spend that much money on a pair of jeans.

Seven for all mankind? My wife buys that shit. I didn't even know they made jeans for men.

Wait a second- I assumed you were a dude. If not, my apologies- chicks should absolutely drop money on nice jeans that make their ass look good.

That said, if you are a dude- what the fuck gives brah?

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In reply to AVPGuerilla
DonVon's picture

AVPGuerilla: Now onto my more

DonVon
      IB
 
 
(King Kong, 1,915
 
Points)
 on 4/17/12 at 5:54pm
AVPGuerilla:

Now onto my more typical snark: what the fuck are you buying $150 jeans? You must either be unemployed and spending your folks' money, or... Well I can't think of any other reason a man would spend that much money on a pair of jeans.

Hahaha I am a dude, and not spending my folks' money -- have been working for a while in software development, but transitioning to IB in the next few weeks. I don't know man, they just fit and look better. If I get a pair of Levi's, they just look terrible, and since I wear jeans every day to work (for now... :P ), I figured I'd get ones that sat well on me. I don't wear nice jeans to get compliments, but it's not the worst side-effect either.

"An intellectual is a man who takes more words than necessary to tell more than he knows."
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futurectdoc's picture

I look at the negative

futurectdoc
      IB
 
(King Kong, 1,692
 
Points)
 on 4/17/12 at 7:36pm

I look at the negative reviews and sometimes the issue on Amazon is shipping or something like that, I was looking for a replacement cell and this one had a slew of awful reviews, because people wanted to use it in areas with GSM and it was a Verizon CDMA phone

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AVPGuerilla's picture

There ya go- that makes

AVPGuerilla
      IB
 
 
(Senior Gorilla, 886
 
Points)
 on 4/18/12 at 4:43pm

There ya go- that makes sense, you work casual. Suppose it's about the same as me
Dropping a k on a suit!

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Use Policy: When the Company gathers personal information from users, we ask for permission first. We also disclose, at the time of collection, how the information will be used by us. Personal information is used for activities such as auto-completion of commonly-used forms and helping us contact you when you solicit information from us.

Disclosure Policy: We do not normally disclose personal information to anyone outside of the Company unless we have previously informed users about the disclosures. However, some data may be used from time to time by outside contractors, including auditors or consultants, to assist us in carrying out necessary financial or operational activities. These uses will be consistent with this privacy policy and all contractors using this potential personal information must agree to safeguard it, to use it only for the authorized purpose, and to return it or destroy it upon completion of the activity.

The Company might be required to disclose personal information in response to a valid legal process such as a subpoena, search warrant or court order.

Although unlikely, it is possible that we may have to make certain disclosures to ensure the security of our Web site, to protect its integrity, or to take precautions against potential liability. In any of these situations, we will take any reasonable steps to limit the scope of the data disclosed.

Web Logs: The Company maintains standard Web logs that record basic information about visitors to our Web site. These logs contain: * The Internet domain from which you came to our Web site. * Your IP address. An IP address is a series of numbers which uniquely identifies your connection to the Internet. Although it is possible in some instances, certain types of IP addresses may be used by interested persons to identify users but we do not attempt to identify users in this way. * The type of browser (e.g., Internet Explorer or Netscape) and operating system (e.g., Windows 98) you use. * The date and time you visited the site, and the pages you saw.

We use Web log information to design our Web site, identify popular features, and in similar ways. We do not try to identify individuals from Web logs or to link Web logs to other user information. However, if someone tries to damage our Web site or use it in an unauthorized or illegal way, we may share Web log information with law enforcement agencies. The Company may provide aggregate information such as the number of users who visit particular pages of the site, or the number of people who link to certain external sites from our site, to other parties.

Changes to Privacy Policy

The Company's features and services will change over time and our information-gathering practices and policies may also change.

While our philosophy of protecting user information from inappropriate uses and disclosures will not change, this policy will be updated occasionally to include any change that materially affects the collection, maintenance, use, or disclosure of personal information.

Forum Topics

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  • I've been searching for jobs for several months and i'm starting to get frustrated so I was hoping for inputs. I know I made similar posts several months back but I was hoping for some fresh input. I worked for 3 years auditor in Big 4 London from 2007~2010, where I gained my Chartered...
    Big4 Audit --> IB/AM, what's my best bet??
  • Definitely inspiring and always interesting to hear Lloyd's speeches. Thought some monkeys might want to give it a listen. Please post any other commencement speeches that were motivational and inspiring to some of you. <iframe width="560" height="315"...
    Lloyd Blankfein's Commencement at LaGuardia Community College
  • I'm a rising sophomore at a non-target liberal arts college. I am currently interning at a marketing company in one of asian countries that I am from and I have been actively looking for something else I can do this summer. I was accepted to the program so called Fullbridge which is a...
    Opinion on business bridge program?
  • I joined a top consulting firm after graduating last year. Now its been a year and I do not like consulting very much. I have been doing completely unrelated projects, and going forward I would like to have a little bit more focus. Plus I want to learn more about finance. Is it possible for me...
    Is it still possible to start over? from MBB to finance
  • Hey All, I just wanted to see if anyone could give me some ideas about exit opps from top Natural Resources Groups? In this case think BB. I am curious if exit Opps are primarily in industry specific funds or if you still see recruitment for general buyout practices at Megafunds? Thanks....
    Natural Resources Group Exit Opps
  • Hey guys, Anybody know if York Capital runs a macro fund? I saw it somewhere that a guy named Marc Helwani runs a $1.5b macro fund but I couldnt find any other source to verify that. One thing I do know is that out of their $15b AUM, about $6.5 is dedicated to traditional long/short. Lol......
    York Capital - Macro?
  • Last year Dalian Wanda Group bought theater chain AMC Entertainment for $2.6 Bn, and now it is snagging up Sunseeker International. [quote] Dalian Wanda said it would pay £320 million for a 91.8 percent stake in Sunseeker, based in Dorset, England, with the remaining stake to be acquired by...
    The Chinese are upping up their shopping spree
  • I'm graduating soon and am looking for opportunities in either IB or consulting. Am indifferent between them. How should I customize my resume towards IB? Also you guys with consulting background, how do you customize to a consulting (MBB) one as well. But most importantly, I need it down to 1...
    Resume review for IB
  • Is anyone familiar with this firm? Started by 3 experienced guys in the media industry. Looks like they've done a couple notable deals in the past 2-3 years. How big is the firm (esp. analyst & associate level)? How is the dealflow? Do they only have an office in SF? Thanks in...
    CODE Advisors
  • Hi everyone! Some of you may remember me, I stopped posting on this forum about a year ago because I got tired of the site for a number of reasons and it wasn't worth it for me anymore. However I'm a big believer of giving back, and I did learn a lot from this site and from a few of the...
    Q&A: 1st year BB London Rates Trader Taking Your Questions
  • This question is regarding background checks and references. I worked at a boutique IB and want to use my old boss as a reference. However, my old boss no longer works at the boutique IB anymore. Is it still acceptable to use him as a reference, or will employers want a reference who still...
    Reference no longer works at firm
  • I'm a student currently deciding between attending either Tulane or Uconn as an incoming junior and wanted to get a picture of which would be better from a recruiting standpoint. Tulane will cost $14K more total over the next two years, or 7K more per year, but in either regard I will still...
    Tulane vs. Uconn
  • 1:41pm: Buy 200 shares WFC @ $41.10 on 99% margin. Currently down $87.98 + $0.90 interest. I normally stay away from margin. I was having a good day and got cocky. Today wiped out a week's worth of profits for me. Note: I swing trade with some day trades thrown in. What would you...
    I Made a Stupid Bernanke-Inspired Trade: Exit?
  • Hello everybody, I just finished up my sophomore year at a semi target and now am trying to choose an internship which will best position me for IB recruiting next year. I'm trying to decide between two internships - one is a credit analyst position at a commercial bank where I would...
    Which internship?
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Highest Ranked Content

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<em>Mod note: make sure to see the great comment below by CompBanker</em> I come from a small town where nobody had ever heard of consulting or IB. I was fortunate enough to attend a top target college (a good Ivy) and land a gig in IB at a BB/EB. I'm starting full time this...
Finance Culture - Personalities
<strong>Background</strong> I randomly discovered WSO nearly seven years ago just weeks after I secured a FT MM IB position. The website was extremely nascent at the time with only a few thousand registered users. The majority of the users were college students with only a handful...
How WSO has enhanced my IB/PE career
<em>Mod note: <strong><a href="http://www.wallstreetoasis.com/faq/what-are-the-best-qa-threads-and-interviews-with-top-finance-professionals-on-wso ">Click here</a></strong> to see all of our q&a's and interviews</em><P> I figured I...
Open for Questions - Equities in Dallas
<em>Mod Note: This is a syndication from Jared's Daily Dirtnap daily market newsletter. WSO readers qualify for a $100 discount...just email [email protected] and mention "WSO Monkey Discount" You can follow Jared on twitter at @dailydirtnap</em> This one has...
THE LAST MILE
Hi everyone! Some of you may remember me, I stopped posting on this forum about a year ago because I got tired of the site for a number of reasons and it wasn't worth it for me anymore. However I'm a big believer of giving back, and I did learn a lot from this site and from a few of...
Q&A: 1st year BB London Rates Trader Taking Your Questions
After over one year in the making, the <strong><a href="http://www.wallstreetoasis.com/2013-wso-compensation-report-full">2013 WSO Compensation Report</a></strong> is here! Access to the FULL 108 page 2013 WSO Compensation Report is <strong>100%...
2013 WSO Compensation Report has Arrived
When I first started as a PE analyst, I constantly struggled with judging the amount of time I should spend on reviewing sourced deals. How much time is enough to really get a handle on the company’s revenue streams? How granular do I need my analysis to be on industry threats? With this...
Misguided Efforts: A Cautionary Tale
Fellow Primates, We are looking for 1-2 students on each campus to help WSO in its sales efforts to student clubs/career centers, and overall promotion at your school both online and on the ground. Below is a description of the position and benefits...thanks in advance for your help! <a...
WSO is Looking for Campus Reps For Summer/Fall 2013 (and beyond)
Many of the questions that have come in surround recruiting for front office Wall Street careers from a non-target so we’ll start with some ideas for recruiting, move on to interviewing, preparing for the job and finally long-term career management advice. Before we begin, it has been...
Stand Out as a Non-Target: Recruiting (Part 1 of 4)
Any Asset Management people here who could give me some insights on it, such as the nature of the work, the pay, the hours, the potential for career advancement, ect? I was looking into IB before but I've decided that I would rather pursue a career that's more intellectually...
Asset Management a better choice than Investment Banking?
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