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Customer Reviews

Create better products by utilizing customer reviews

For years businesses have used customer feedback to improve aspects of their brand or store locations. Feedback would be compiled and analyzed, and then changes would be made to their branding or store layout. Now, with the help of product reviews, we have seen a rise in customer feedback being used to shape new products. According to a new study from McKinsey & Company, even small changes in the star ratings of a product can drive growth, and examples of this have never been more apparent than the explosive growth during the COVID-19 pandemic.

With the decreased demand for in-store shopping during the pandemic came an increase of online shopping which led to a surge in online ratings and reviews consultation. According to McKinsey, the volume of reviews was 40-80% higher than in 2019. As we have been consistently seeing, customers are consulting and trusting customer reviews more often than brand marketing. In fact, 85% of consumers say that User Generated Content has more influence on their purchasing decision than brand-created content.

Experts have noticed that even an increase as small as 0.2 stars can create meaningful growth for products and categories. This paradigm shift has given consumers more control during the buying process and has forced retailers to meet the new and higher customer experience expectations. This operational shift shouldn’t make retailers nervous because while they do have new expectations to meet, they also have huge opportunities to utilize this customer feedback and improve every aspect of the customer experience, including product development.

Brand loyalty has been steadily decreasing for years but the pandemic accelerated the trend with more consumers than ever before willing to try new brands. 75% of Americans have changed their shopping behaviors since the start of the pandemic, and 40% say they have switched brands, which is twice as many flip-floppers as we saw in 2019.

This is where the new opportunities for businesses come into play. A new 6 step approach can help companies establish and manage an online ratings and review strategy designed to help create better products and increase ratings.

  1. Start reevaluating your product development process and invest more resources into product improvement. This may mean working closely with suppliers to make changes on a macro level.
  2. Reassess product descriptions to make sure your current claims are accurate and easy to comprehend. This is where you can rely on any existing customer reviews and address concerns regarding ease of assembly instructions or additional product uses.
  3. Create a digital presence for your product. Ensuring that your product has plenty of detailed pictures, videos, and answers to customer questions is essential to leveraging a new product. Once the product has a strong digital presence, you can encourage feedback from customers, starting with products that have the least amount of reviews.
  4. Establish a technology-based foundation to analyze customer reviews. Many companies now use tools to identify harmful language or highlight positive text in a review. Filters can find negative sentiment or simply alert you to minor issues such as jargon, slang, or sarcasm which might be confusing to a customer.
  5. Encourage cross-functionality and team collaboration to achieve company-wide goals. Roundtable thinking gets employees from different departments to focus on more than just their aspect of the product development and helps the team to improve on the product’s overall appeal to its customers.
  6. Identify the biggest opportunities to make an impact with product revision. A team should start by organizing the pain points for a product with the help of User Generated Content such as product reviews, social media content, or feedback from a third-party website.

Keep in mind that the impact of product reviews varies by category. For example, products related to health and safety or children and pets are more likely to be scrutinized and have an impact on the purchasing decision because a product with poor reviews and faulty design could be extremely dangerous. Whereas you might hit a point of diminishing returns if you invest increasingly more money on products such as napkins or paper plates because the risk of a faulty product has inherently less dangerous outcomes.

The bottom line is that customer reviews are essential to utilize throughout the product development cycle. And learning from customer feedback and making even small updates to a product can dramatically increase the product’s star rating and in turn its conversion rates.

Click here to read the McKinsey & Company study in full.

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