Is Friend Influence Stronger than Brand Equity?

Larry Kramer is the Founder and Former CEO of CBS Marketwatch.com. He was the first president of CBS Digital and sits on the Boards of Discovery Communications, Inc., American Media Inc., Freedom Communications, Inc., Answers Corp., Black Arrow Inc., and Harvard Business School Publishing. He is the author of the upcoming book C-Scape: Conquer the Forces Changing Business Today and runs a blog by the same name.

Online consumers are using the Internet to research products and make choices, feeling less loyal to single brands in most categories. In fact, according to research from AMP, a marketing agency, 43% of all consumers claim they research products before they buy. In consumer electronics, that number is actually at 64%.

Here is an interesting finding:

According to the report, “72% of respondents stated they turn most to general consumer reviews when it comes to seeking information on product performance, close to twice the importance they place on expert “durability” or “functionality” reviews, which came in at 42%.  Only 22% reported specifically seeking out information about the quality of the product.”

(From AMP Agency)

Further, the report stated: “52% of respondents said online consumer reviews most influenced their purchase. 41% said feedback from a friend was important, and 37% were influenced by the number of positive reviews they read online. Only 17% stated the number of negative reviews had an effect.”

These are further indications of the growth of the power of social media in the sales process. Companies simply must pay attention to these sites and communities, and find ways to engage and follow the social networks around your business, product and industry. Clearly, these networks are working:

According to the report, 94% of consumers said that research positively influenced their decision to make a purchase, and 36% said they bought a product because of the research they found.

But there is room for improvement as 30% stated they cannot find enough of the information they are looking for and “Only 4% felt overwhelmed by the amount of research available to them in a particular category.”

Larry Kramer is the Founder and Former CEO of CBS Marketwatch.com. He was the first president of CBS Digital and sits on the Boards of Discovery Communications, Inc., American Media Inc., Freedom Communications, Inc., Answers Corp., Black Arrow Inc., and Harvard Business School Publishing. He is the author of the upcoming book C-Scape: Conquer the Forces Changing Business Today and runs a blog by the same name.

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