\ Variable: Number of Reviews 5. Initial Reviews Have the Greatest Impact DIMINISHING MARGINAL RETURNS It’s easy to assume that having more and more reviews will continue to help drive sales. Our research found that more e s reviews help, but only to a point — and that point is much a re c lower than many might assume. n I on i s Based on our research of the gift retailer’s website, we found r e that nearly all of the increase in purchase likelihood occurs v on Low Price within the first 10 reviews, and the first five reviews drive the C bulk of this increase. High Price 0 5 10 15 20 Number of Reviews For both low- and high-priced products, the marginal value of addi- tional reviews rapidly decreases. But the point at which the impact plateaus varies depending on price point. Higher-priced items need at least five reviews to see the greatest conversion impact, whereas lower-priced items only need 2-4 reviews to see a significant impact. Askalidis, Y. and Malthouse, E. C. (2016). “The Value of Online Customer th Reviews.” RecSys 2016 - Proceedings of the 10 ACM Conference on Recommender Systems, 155-158. Association for Computing Machinery, Inc. 11 \ How Online Reviews Influence Sales \ spiegel.medill.northwestern.edu