Resistance to change is certainly one of the limitations that faces innovation adoption. But it is not a stone wall. It seems that personal opinion can win even in front of the most unshakable beliefs when it comes to trying new things, no matter how subjective and therefore hardly verifiable it can be. That’s where blockchain technologies come in handy in the fight with rumors and fabricated opinions by tracking every customer review for better decision making that is based on first-hand information.
Word-of-mouth without borders
When it comes to new experiences, individuals become sceptical and doubtful as to whether or not changing their habits and their daily routine might bring about worthwhile results. This effect is widely known as the resistance to change theory that can be overcome with recommendations based on personal experiences given by friends or colleagues.
If a new service is recommended by someone from the community, that individual will be more likely to experience it.
Personal recommendations are believed to be independent, therefore individuals tend to consider reviews as a trustful source as opposed to the information coming from affiliated parties such as advertising messages or expert opinions. Word-of-mouth is spreading through communities at a high rate of speed in order to address problems as fast as possible. First-hand complaints on high-risk assets would save other investors from losing money and trust.
Derek Rucker, a marketing professor from the Kellogg School of Management at Northwestern University, stated in his study that the intention to give advice is shaped by altruism and empathy.
If only the reviews were truly independent themselves…
The consumer market has spent billions on advertising campaigns in order to reach their audience. According to McKinsey’s research, 20% to 50% of purchasing decisions are based on reviews and recommendations. The role of word-of-mouth then becomes more sufficient as the price of a product is high or its technology is considered innovative.
However, a consumer’s mind is more likely to trust sources that are not influenced by commercial interests. According to the research, consumers from developing countries are taking word-of-mouth more seriously than advertising messages when considering whether or not to purchase a product.
According to a Local Consumer Review Survey, 85% of users trusted online reviews as much as personal recommendations in 2017. Recommendation services have quickly become popular, since they have decreased the amount of time spent on decision making while the amount of information available on usage cases has increased. In the digital economy, recommendation systems were designed to structure the number of choices by applying filters in order to better meet search criteria.
Thus, travel user review service TripAdvisor has a monthly audience of 185 million views, followed by the entertainment aggregator Yelp, which has 165 million views. With, currently, over 630 million reviews and opinions, TripAdvisor is dominating the recommendation market with $1,556 million in revenues for 2017. An average visit lasts for about 3 minutes, during which a user gets the first impression from recent reviews and an overall ranking.
The recommendation systems would work perfectly if traditional markets were driven by fair intentions rather than greediness.
As small businesses are struggling to compete with huge corporations that have funds for marketing, they’ve started manipulating recommendations by paying for reviews. On freelance websites, SEO specialists are ready to review products for $4 an hour. In Russia, the price of a fake review of about 300–500 words roughly equals $1.59. The budget on fake reviews is a part of the content marketing budget that is on track to be flooded with $2.47 billion in 2020.
The review system ended up being the least independent information source with paid content that doesn’t cost a lot, which is therefore affordable to companies with products of any quality. While TripAdvisor has warned of unverified comments, third parties have developed algorithms to track fake reviews.
Recommendation systems appear to be causing more problems than they solve, which begs the questions How can you verify the review? Who takes the responsibility for fake reviews, and how to make that decision?
Blockchain-backed transparent reviews #IMHO
The crypto economy gives answers to questions raised by the traditional markets. Recommendation systems are missing transparency since reviews are not linked to payment accounts, which makes the verification process nearly impossible. Blockchain technology responds to this issue with a simple solution to anonymously track data on purchases and to encourage consumers to share their first-hand experiences while, at the same time, being rewarded with cryptocurrency.
In the recommendation market, the blockchain acts as a data aggregator and verification system, all while keeping consumers’ privacy and anonymity secure. Traditional review aggregators are failing to eliminate fake recommendations, whereas solutions developed with the blockchain were designed to never let them come through in the first place.
In just 18 years, after the foundation of review aggregator leaders in the traditional market, a new crypto project is aimed to revolutionize the industry. Rateonium uses a new technological approach to store user data for further analysis. Based on reviews that are linked with a payment transaction, products and services are ranked. The ecosystem that is being developed by Rateonium encourages users to share their personal opinions by automatically rewarding them in their cryptocurrency (RTO).
Encryption technologies store user data based on geolocation and personal preferences in order to help its members make weighted decisions. This is done while reviews are sorted and stored for further analysis on the blockchain.
The blockchain system supports trust principles linking consumers and companies on one platform. After a review is submitted, a user is rewarded a certain amount of tokens in respect to the information added. Fake reviews are being filtered with algorithms approving only verified opinions sealed with the In-My-Humble-Opinion stamp as a means for quality assurance.
The crypto economy has finally set a price on the information that has been constantly shifting the traditional market. The grapevine has transformed from a word-of mouth to an insightful source for decision-making processes. In today’s environment, your opinions are worth more than they have been at any other time. So why would you give those away for free?