The Real Cost of a Fake Online Review

Lithium Alumni (Retired)

Over a year ago, Lithium fielded research around the topic of extreme customer expectations – uncovering some very real “truths” about consumer culture, online influence, and customer loyalty that have continued to prove themselves many times over.


This popped back into my head recently while I was reading about Amazon’s battle with fake online reviews. Metrics supporting the power and impact of “word of mouth” on influencing purchase decisions really stood out to me from the research. In fact, among those surveyed, the vast majority of respondents – well above 60% across a number of countries – confirm that they would not even consider purchasing something that wasn’t accompanied by positive online reviews.


It wasn’t surprising, then, to understand why a small group of sellers on Amazon would apparently pay people to post positive reviews about their products, whether or not those pseudo-reviewers had actually ever used them. Obviously, all brands want a good review. But at what cost?


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What makes word-of-mouth influence so unique is the trust  – or perceived trust that’s automatically built into it. When someone reads a review, the assumption is that the reviewer did so with good intentions. In other words, to help others make decisions about products or services that they are contemplating purchasing.


But that bubble of good intentions bursts when it becomes clear that those reviews we’ve grown to rely on are completely false. It actually changes the entire dynamic of the role that reviews play within the broader purchasing journey. It has the potential to create a serious domino effect. After all, if a review can’t be trusted, what’s the point of having reviews in the first place? Even more, what kind of negative halo effect does it create for the vast majority of honest, genuine, and trustworthy reviews that fill our communities?


So how can brands overcome this? For me, it’s an easy answer: a trusted reputation. At Lithium, we have a tremendous amount of data from our 450+ branded communities and of course, the Klout Score, which together help us determine who is real online, and more importantly, identify what real expertise they have in the areas where they are providing reviews or social commentary.


This is a big deal, especially in today’s digitally-saturated world where many relationships and transactions are happening anonymously. Both the Lithium Profile and the Klout Score are powerful tools for how we engage with customers. This in turn helps instill a greater degree of confidence in those conversations that are happening online. As an industry, brands need to continuously strive to collect and curate more quality data around this word-of-mouth ecosystem, so we can provide both consumers and our business customers who sell to them with the most reliable and trustworthy content possible.


For example, at Lithium, we do this via our Rank and Reputation Engine – where we can dynamically recognize user contributions within a community and help brands regularly provide incentives to keep those active users participating. The idea is simple: the more a user contributes to a community, the more rewards they receive for their helpful contributions, which in turn not only raises their “rank” within the community, but also their “reputation” as a trusted contributor as a result of their elevated rank. It’s the engine that makes our user generated content (UGC) a trusted content source.


Trust is priceless. As a brand, you either have it or you don’t. If you are paying people to leave positive reviews in an attempt to make your brand look better or more favorable in consumers’ eyes, you’re already on shaky ground. The cost of that fake online review could be fairly significant in the long-term.


Volkswagen’s recent scandal around installing defective devices to avoid issues related to emissions testing is a perfect example of how challenging the power of consumer  trust can easily translate into a brand’s speedy demise. The automaker lost around 30% of its market value – and likely an even greater amount of consumer trust within minutes of the news breaking. This will take years and millions of dollars to rebuild.


Long story short. Word-of-mouth is powerful, but only when it’s honest and real. Brands must be the best stewards of authenticity and credibility in their communities to keep the conversation alive and thriving.