October’s guide to the most interesting things happening in the world of advocacy marketing

The problems with 5-star rating systems and how to fix them

Does your business rely on a 5-star rating system for feedback? New research suggests you might want to rethink this approach. The truth is that 5-star systems are good at weeding out very low-quality businesses or products, but they make it hard to separate the good from the great. Why? Well, the 5-star system has built-in selection biases. Without incentives to rate businesses or products, most customers who leave feedback have either had a very good experience or a very bad one. Also, some businesses inflate their ratings system, meaning that 4.8-star average score might not be as exceptional as you think. The solution? Show customers an average rating for products or suppliers in that sector. Or, adjust user ratings based on differences in their reviewing behaviour. Follow the few easy tips laid out here to make your rating system more meaningful.

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Financial Services: why the industry needs to rethink its loyalty strategy

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The digital age hasn’t been kind to the financial services industry. On the one hand, online banking and self-serve product applications have facilitated enormous growth and resource streamlining. On the other hand, there’s no such thing as loyalty anymore. A quick scan for ‘credit cards’ on Google gives a top search result for a price comparison site. And the second result? Another price comparison site. That’s before Wikipedia’s even defined what a credit card is.

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