The Internet has removed information asymmetry in dozens of industries and markets, it has ultimately given consumers a lot more information in their decision making and has created transparencies in domains that have previously black holes.
Whether it is checking a hotel on TripAdvisory, researching a product on Amazon or finding the lowest price on Priceline.com – the truth about quality and price of a product are now transparent like never before. With drastic consequences for businesses big and small.
Serial Entrepreneur Jason Calacanis argues that this is the beginning of the The Age of Excellence, where mediocre companies are unable to survive because it is just so easy for consumers to find this information.
You see, in the old days, it was about distribution, location, marketing spend, celebrity endorsement, traffic buying or the black art of search engine optimization.
??Today it’s about getting a positive net-promoter score and making your five-star histogram look like a gun: a lot of five-star reviews coupled with some four-star reviews make the barrel. A dramatic drop-off to three stars, followed by slightly fewer two- and one-star reviews, makes the handle of your gun.??The quantity of reviews, of course, reinforces this pattern.
How many times have you seen the gun in the App Store and just clicked “buy” without thinking about it?
Now, how many times have you seen a histogram that looks like an upside-down gun and run for the hills? Exactly.
This resonates with what Google calls the “Zero Moment of Truth“, the moment when consumers automatically use a search engine to find out more about a product or service before their purchase.
The consequence of this is that mediocre products can not be hidden behind marketing tricks anymore. Once consumers find out about a crappy product, they will share this knowledge and sales will be negatively impacted.
At the same time this sets a clear standard about the quality levels that are expected when delivering new products or services. Either your reviews form a gun or it’s time to go back to the drawing board and come up with something that leads to a gun-shaped ratings histogramm.
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