CREATING BRANDS ONLINE: THIRD-PARTY ENDORSEMENTS AND THEIR

EFFECT ON CONSUMERS’ TRUST IN BRANDS AND PURCHASE INTENTIONS

Pavel Mrázek | Young Heads | March 31, 2015

2  Helping new brands and established ones to gain trust & increase purchase intent

Contrary  to  It  has  roots  in  a  piece  of  classical  La3n  literature  from  45  BC.  Contrary  to  popular  belief  It  has  roots  in  a  piece  of  literature  

from  45  BC.  

Opportunity  

3  

Expert vs. Consumer Reviews

Which one is more effective? Opportunity  

4  

Increasing purchase intention

5  Customer involvement Elaboration Likelihood Model

Consumers spend different amounts of time and effort when shopping or thinking about products.

central route (high-elaboration level) vs. peripheral route

(low-elaboration level)

Issue-relevant arguments and product-relevant attributes are more influential under high-involvement conditions, while peripheral cues, such as the characteristics of information sources, number of arguments, famous endorsers, high

expertise of the source of the message, or professional third-party assurance seals are more influential under low-

involvement conditions (Yang, Hung, Sung & Farn, 2006)

Opportunity  

6  

How to reflect it on web sites?

High-involvement product web site increases brand attitude and web sites are therefore an important advertising tool for high-involvement products. As visitors are active and

stay longer, it is important that the web site is filled with information and offers visitors opportunities to interact with

the brand and the web site content.

Correspondingly, a visit to a low-involvement product web site does not increase brand attitude. It is likely that visitors to the low-involvement-product web site are more engaged

with games, competitions, and other peripheral cues rather than with the brand.

Opportunity  

7  

Trust online

Perhaps the greatest difference between trust online and in all other contexts is that when online, consumers have more

difficulty assessing the potential harm or good-will of others (Friedman, Kahn & Howe, 2000).

Experience-based trust or cue-based trust.

Opportunity  

8  

Cues helping with consumer trust

Security

Web site usability

Expected product performance

Privacy

Seals of approval

Opportunity  

9  

Source credibility

“Information coupled with a well-designed interface and attractive graphics may result, in the absence of more

substantive cues, in a tendency for users to make a positive credibility judgment” (Wathen & Burkell, 2002, p. 138).

In the experiment of Flanagin and Metzger (2007), fictitious

sites were able to achieve credibility ratings that were largely equal to those of major organizations, presumably based on

their sophisticated site attributes, including design and content.

An average consumer pays significantly more attention to superficial aspects of a web site, such as visual cues,

than to its content.

Opportunity  

10  7 factors that infuence credibility (Fogg 1999)

“Real-world feel”

Ease of use

Expertise

Trustworthiness

Message tailoring

Commercial implications

Amateurism

Opportunity  

11  

Psychology!

People trust people, not technology.

People tend to believe what most of other people believe, even though these beliefs may not be true (actual sales of a product increase when consumers learn that the product is

already selling strongly).

Opportunity  

12  

Third party reviews

Consumer-created information is more credible than seller-created information, consumer-created information tends to

be more consumer oriented than seller-created information (more understandable and familiar)

When consumers are faced with both positive and negative comments, the quantity of positive comments needs to be significantly larger to cover the negative feelings

regarding the product in order to influence purchase intentions of consumers.

Opportunity  

14  

Importance of reviews

In this experiment, 92.5% of participants expressed that reviews on a web site are important for their purchase

decision making.

A good example how product reviews can drive sales is a baby goods retailer that introduced a new navigation feature

to its web site showing product reviews - the company reported increase in sales by 55% with around 80% of the business coming from new customers (Silicon.com, 2009).

Opportunity  

15  

Consumer reviews more important*

77% of consumers pay more attention to consumer reviews than to professional critic reviews (only 23%)

Average buyer consults 11 consumer reviews on the path

to purchase.

74% look for reviews online.

Opportunity  

*KBC Research (2013): http://www.webershandwick.com/uploads/news/files/ReviewsSurveyReportFINAL.pdf

16  

People pay more attention to consumer and expert reviews depending on product

(example of consumer electronics)

Opportunity  

Go ask your customers what they think of your product or service...