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When Consumers Call the Shots

A study by the Yale Center for Customer Insights at the Yale School of Management indicates that consumer reviews on Amazon.com and BarnesandNoble.com had a potent effect on sales of the products reviewed.

Interestingly, the study's authors, Judith Chevalier and Dina Mayzlin, found that a 1-star review depressed sales more than a 5-star review boosted sales. It seems that negative packs more punch than positive in word-of-mouth.

This report contributes to a growing body of research demonstrating the impact of consumer-generated content -- whether in blogs, product reviews, or other new media -- on brand image, sales and even share price. I'll be posting more on this research in the future.

In the meantime, consider this little factoid from another study by the Yale center, which found that the new price and feature comparison capabilities enabled by the Internet is forcing a transfer of riches from auto companies to consumers amounting to at least $240 million per year for those who shop at Autobytel.com alone, or about 2.2 percent of the cost of the average car. That's $770 saved on the price of a $35,000 vehicle.

And again, that's the savings just at Autobytel.com alone.

More evidence that the Web-fueled power of consumers is increasingly being felt in the marketplace.


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Hello, is pushed you coincidence over your Blog, comes from Austria and wishes you all good to the USA, wants times America a vacation to start must however surely still save most expensively comes the flight. well then still much success Manuel

There's an old adage in the restaurant industry...if a customer comes in and enjoys his/ her experience he'll/she'll tell three people. If they don't, they'll tell thirty.

We all expect the product or the service we purchase or contract for to be of quality. When it is, we're satisfied. When it is not, we're angry. I'll be interested in hearing more about this study and your thought as you post them...because this is how consumers voices will gain control.

By the way, what the heck is Manuel trying to say?

Hey Jonathan, I have no idea what Manuel was trying to say (or even if he's real and not a robot).

Why do you think it is that negative carries more punch than positive?

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