• by Jack Loechner , Staff Writer, October 8, 2014

According to a study from The Society For New Communications Research, summarized by Vanessa DiMauro and Don Bulmer, the reputation of a company is no longer defined by what they “report” or what they “say” they stand for. Instead, they are increasingly defined by the shared opinions and experiences of socially-connected consumers.

With greater access to information and news, heightened awareness of economic and (geo) political matters and, most important, the experiences of other individuals communicated via online communities and social networks, consumers are more discerning about the companies they choose to do business with and support, says the report. We are now in a “so what”, “show me” or “can I trust what you say” business, political and social economy, says the report.

While the study expected to see a strong difference between Millennial consumer behaviors vs. older generations, the findings overwhelmingly support gender as a stronger factor than generation. Women are two times more likely to turn to social channels to inform their decisions about purchases than men (31% vs. 15%). Moreover, women place more importance on the degree to which a company commits to operating with a social conscience, and are influenced most by:

• What the media reports about a company
• Online customer reviews and ratings
• A company’s advertisements

25% of women are more likely to make a purchase when they learn about an organization’s positive social impact actions compared to only 12% of men. And, women (regardless of age) are more likely than men to engage online as advocates or activists on behalf of or against a brand.

Social Media sharing plays a significant role in influencing buyer decisions. A seemingly small percentage of people who share online one or more times per month (24%) have great influence on a much larger majority of consumers who read online sites to inform decisions or opinions (67%).

Clearly, word of mouth, or keyboard and touch-screen, matters, says the report. In the absence of personal recommendations, buyers frequently go online to inform their decisions. 71% of respondents regularly read social media sites as part of their information gathering routine; 76% consider what their friends, family or other trusted information sources say about a company when they are forming an opinion about a company.

Once a company earns a consumer’s loyalty, the typical factors a consumer uses to make purchase decisions becomes less scrutinized because the customer trusts the company to serve them well. Quality and price (75% vs. 72%) rate as the most important factors when choosing to buy from a company followed by trust (50%), positive ratings online (43%) and personal recommendations by family and friends (42%).

What are the events or factors that cause you to be “loyal” to a company. That is, you continue using that company as opposed to actively seeking other options? 

• Quality    51%
• Customer service   48%
• Price     36%
• Reward programs    9%
• Prior experience    9%
• Trustworthy/Reputation     7%
• Positive social impact     5%

When quality and price are largely equal in a purchase decision, nearly three in five people report a moderate to strong positive impact on likelihood to purchase when they discover information on the positive societal impact of a company. 61% report a moderate to strong negative impact on likelihood to purchase when hearing news on the negative societal impact of a company. Product or service experience (positive or negative) is two times more likely to be shared than news of a company’s social impact (positive or negative). News of the negative societal impact of a company has greater impact on women (13% more than men).

Social media maintains a strong influence in the lives of consumers. Reading social media sites is the second most popular activity consumers engage in – just behind watching TV. It rates higher than listening to the radio or reading the newspaper.

The majority of respondents (71%) regularly read social media sites as part of their information gathering routine and 76% consider what their friends, family or other trusted information sources say about a company when they are forming an opinion about a company.

Especially interesting were responses to the question “when deciding whether you will purchase products or services from a company that you have not used before,” 66% (the top response) report that online sites where ratings and commentary from other consumers are posted were their 1st or 2nd source of information.  This factor was weighted more heavily than friends or family recommendations.

Further, the report identified that: 

• Quality and price (75% vs. 72%) rate as the most important factors when choosing to buy from a company followed by trust (50%), positive ratings online (43%) and personal recommendations by family and friends (42%) 
• Women are nearly twice as likely as men (13% vs. 7%) to place “positive societal impact” among their top three reasons to share online

When quality and price are largely equal:

• Nearly three in five respondents report a moderate to strong positive impact on likelihood to purchase when they discover information on the positive societal impact of a company
• Slightly more (61%) report a moderate to strong negative impact on likelihood to purchase when hearing news on the negative societal impact of a company
• Product or service experience (positive or negative) is two times more likely to be shared than news of a company’s social impact (positive or negative)
• News of the negative societal impact of a company has greater impact on women (13% more than men)

For additional information about the study, and access to the complete report in a PDF file, please visit here.