The effect of social proof on customer purchases : an experiment with client testimonials and online reviews on website conversions

E-commerce businesses continue to grow as more consumers and businesses make their purchases online. The most critical challenge for online businesses is reducing the risk online visitors perceive compared to shopping offline. Online businesses can reduce risk by showing other customers' experiences through social proof. In an online context, electronic word-of-mouth is often used in the form of reviews. In this study, I focus on the effect of reviews through online reviews posted on a third-party website and the effect of customer testimonials. The effects of customer testimonials and online reviews on several website metrics were studied. First, consumer behavior was studied through bounce rate, and the path-to-purchase was studied through personalization, micro-conversions, and purchases. Customer testimonials are expected often perceived as expert opinions, thus creating higher perceived source expertise. In addition, online reviews are expected to have higher perceived trustworthiness since these are written on independent third-party review websites. The effect was studied using an online experiment, where website visitors were shown a variation of the website with either online reviews, customer testimonials, or the original website. Results show that social proof is crucial during the pre-purchase phase, where OR significantly improves the number of micro-conversions.