Considering the Influence of Online Study Abroad Reviews:
A Reflection On “How Online Product Reviews Affect Retail Sales: A Meta-Analysis”
Whether we like it or not, the roles of traditional marketing and word-of-mouth promotion now share a large seat at the table with online product reviews. Many industries are already defined by the way their customers use online opportunities to “harangue, lecture, pontificate, and otherwise broadcast personal opinions” (Notess 2000), and for most of us it is increasingly rare to book a hotel, buy a camera, or select a movie without first consulting the opinion of hundreds of strangers. But the actual influence of online reviews on sales remains the center of an academic discussion that is still diverse in focus, method, and results. Professors Floyd, Freling, Alhoqail, Cho, and Freling (College of Business Administration, University of Texas at Arlington) set out to bring some uniformity to the topic with their meta-analysis of 26 studies that included 443 sales elasticities. Their conclusions pose interesting questions for a product that they do not include, namely study abroad programs, where publicly available participant reviews are still in initial stages of popularity but seem likely to follow the course of most other products and services, for reasons that will be seen.
An important note is that the authors of this paper found little variation in their findings despite differences in geography (US or non-US), prestige (elite journals verses lesser known) or method (simple verses sophisticated analysis), which “suggests that the conclusions we draw about online product reviews are relatively generalizable across a variety of contexts” (227). Still, there is likely to be some healthy skepticism towards applying these findings to study abroad. Clearly, more than any product included in the meta-analysis, study abroad programs vary widely in price, length, intent, and conditions, but most importantly in the motivation of participants. While some students might prioritize travel or social opportunities, others seek unique academic or linguistic boost to their education, and a negative review about lax academics might actually incentivize a prospective participant who reads it, for example. There is the divergence of interpretation between the parent who is often the (paying) customer and the student who is the (participating) consumer. Moreover, since most students accept the programs offered by their academic institution anyway, is there any need to look to reviews for a “competitive” advantage? Is it better for the provider to limit reviews to private evaluations to determine that the program meets the organization’s goals? All these are valid, and this reflection intends to do no more or less than consider the state of research on online reviews as presented in the meta-analysis by Floyd et al., to suggest the impact these findings could have on study abroad programs, and finally to highlight the need for further research into these and many other questions specific to study abroad.
The studies included in Floyd et al.’s analysis consider the impact of online reviews on the sale of hotel rooms, books, movies, digital cameras, craft beer, video games, music albums, audio and video players, DVDs, TV shows, and video game consoles (219). The key finding was that online reviews do have an influence on sales across the board. The impact was significantly greater than shelf space elasticity, personal selling elasticity, and both long-term and short-term sales elasticities. In fact, the only factor they measured that had a greater influence on sales was price (219). While not surprising it is meaningful to find such consistency across a wide range of studies and products. What is surprising is the indication that electronic word of mouth has actually overtaken more traditional sources of information. The authors reference a study made over five countries that asked shoppers to indicate the most important sources of information they use to make a purchase decision. Online ratings and reviews were number one (52%), above advice from family and friends (49%), and far beyond advice from store employees (12%) (Cisco 2013). This indicates a major shift in the way people make purchasing decisions, with increasing trust in people they’ve never met exceeding close personal relations.
Advice from friends and family has already been an imperfect solution for those considering study abroad. Because study abroad is experienced by around 10% of undergraduate student, and even less for the generation of their adult family members or friends (IIE, Open Doors Data, 2015), there is often little opportunity for a decision maker, whether student or parent, to find pertinent advice from a familiar source. This is even truer when seeking information about a specific program. The best option before the days of the internet was often to speak with someone who studied abroad, perhaps on an entirely different sort of program, and be told to either “go for it” or not. Thus, in the context of study abroad, online reviews seem likely to not simply overtake advice from friends and family, and rather to fill a void that was never adequately met by traditional word of mouth. This perspective is all the stronger when considering the importance of “product involvement” (discussed below) and the age group of study abroad participants being more reliant on online information (age of consumer was not a factor considered in the meta-analysis).
Beyond personal relationships, the obvious place to get information about specific study abroad programs is the study abroad office. Despite clear differences this is comparable to “advice from store employees,” which was a distant third with only 12% of shoppers mentioning it as a decision-making factor. Of course study abroad professionals are seen as being more knowledgeable and trustworthy than a commission-driven store employee, but these findings speak to the overall societal wariness of marketing or perceived ulterior motives, and encouragement to participate from a study abroad professional is not processed the same way as feedback from a former participant.
Similarly, looking at various types of online hosts for reviews, Floyd et al. found that “reviews appearing on a third-party website have significantly higher sales elasticities than those appearing on seller websites” (226). Especially when considering the products in question, this rings true, since few of us would give equal weight to praise splashed across a brand’s website compared to non-filtered reviews. Further research needs to be done to determine if this plays out differently when prospective participants visit the homepage of a study abroad office and interpret quotes from previous participants. Doubtless there is more trust between the university office and the “insider” student than between a traditional seller and buyer, but if a third-party source of reviews were found to be consistent with the information published by the study abroad office then trust would be bolstered.
Providing multiple sources for reviews and information is especially advisable in light of the final conclusion of the meta-analysis concerning “product involvement.” Product involvement is defined as “a consumer’s enduring perceptions of a product category’s importance,” especially regarding monetary investment but including factors such as time, importance, and risk (224). The authors found that “consumers engage in extensive (limited) online search for products that are more (less) involving, which they associate with higher (lower) perceived risk” (228). The authors use the example of the purchase of a digital camera as a high-involvement decision, but by their definition few “products” could be more involving then a study abroad program. Because of the unique nature of study abroad as a purchasing decision, more research is needed to confirm that consumer habits follow the same logic in this industry. The reliance on reviews might be specific to more price-sensitive decision-makers, or to those who are the first in their family to go abroad, etc. If it is shown that potential study abroad participants follow these general consumer trends then we can expect them to spend more time reading more reviews and to be more influenced by their content than for almost any other purchasing decision.
As consumers increasingly look to the internet for decision-making information and become more selective about where they place their trust, greater research needs to be done about the influence on the industry of study abroad. Do decision makers approach study abroad in a similar way as other purchasing decisions? Are certain demographics more likely to seek out online reviews, and how do they interpret what they read? Are reviews more impactful depending on program cost or length (greater “involvement”)? As college applicants increasingly look to online university ratings and even professor ratings, is there any sign that students are evaluating study abroad programs as part of their choice of university?
The temptation is to see study abroad as a less competitive environment and thus less impacted by reviews, but another perspective is to see competition between students participating in study abroad or not. With the goal of using as many tools as possible to increase lead conversion, there is much merit in considering how electronic word of mouth could tip the scales.
– Caleb House
About the Author:
Caleb House is Abroad101’s Social Media Editor. Caleb grew up in Northern California and has lived in the Czech Republic, Japan, India, Tanzania, France, South Korea, Germany, and Côte d’Ivoire as a student, teacher, volunteer, backpacker, researcher, and administrator. He holds graduate degrees in Modern Global History from Jacobs University Bremen and in International Management from the Burgundy School of Business. He recently married his soulmate in her tiny village in France, and the two currently find themselves in Washington D.C. He is preparing the launch of his website, HowToGoAbroad.com, and in the meantime can be contacted with questions on his Facebook page “How to Go Abroad” or on Twitter @HowToGoAbroad.
Cisco Internet Business Solutions Group (2013), Catch and Keep Digital Shoppers, http://www.cisco.com/web/about/ac79/docs/retail/Catch-and-
Floyd, Kristopher; Freling, Ryan; Alhoqail, Saad; Cho, Hyun Young; Freling, Traci; How Online Product Reviews Affect Retail Sales: A Meta-analysis, Journal of Retailing 90 (2, 2014) 217–232
Notess, Greg R. (2000), Consumers’ Revenge: Online Product Reviews and Ratings, Web Wanderings. http://notess.com/write/archive/200004ww.html
IIE (2015), Open Doors Data Highlights, http://www.iie.org/Research-and-Publications/Open-Doors/Data/Infographics#.VyFOGDArLIU