Shares in Trustpilot have risen almost 20% over the past month, reflecting a rise in revenue as consumers take extra care when making purchases during the cost of living squeeze. The company, which serves North America and Europe, achieved sales revenue of $73 million in the first half of 2022, which represents a 25% rise from the previous year.
Moving towards profitability
The figures are a welcome sign for founder and CEO Peter Holten Mühlmann, as the company edges towards profitability. The company posted a $9 million loss, which is a reduction from the $17 million loss in the previous year. However, the company’s share price is still down 71% from its opening price since floating on the London Stock Exchange in March 2021.
Trustpilot had been criticized over its handling of fake reviews on its platform, although with its AI algorithms, the company has been able to reduce the number since 2021. Mühlmann hailed the strides taken by the company to curtail review manipulation on the site: “We’ve invested a lot in deterrence, we’ve taken companies to court that have grossly manipulated the system and we think that has a deterrent effect.”
The advantage of expert review sites
This highlights the advantage enjoyed by sites featuring expert reviews. For example, niche websites featuring gaming are able to use the many years of experience and knowledge of their writers to provide advice on the best video games and recommend hardware such as the best gaming headset. Here, reviewers are able to combine their knowledge of playing games such as Counter-Strike and provide specific suggestions on the best hardware to enhance the experience of gamers. Readers can confidently place their trust in the reviewers as experienced gamers, which gives the reviews a high level of credibility.
As expert reviews are more trustworthy, review sites have been forced to ramp up the removal of questionable reviews. Tripadvisor blocked almost one million fakes amongst the 26 million reviews on the site in 2020. With Tripadvisor recommending the best restaurants in the US and around the world, authenticity is an integral component of customer trust in the site.
Nevertheless, Mühlmann highlighted the opportunity for review sites such as Trustpilot at a time when prices are rising and consumer purchasing power is decreasing. The result is that people invest more time in researching products and seeking out consumer reviews as they are more careful about how they spend their money in difficult times. The influence of Trustpilot was demonstrated recently as part of the coverage of the poor reviews received by the Chinese company Shein.
Transparency remains an issue for customer review sites and although AI algorithms have made it easier to combat fake reviews with issues, it remains a credibility issue for sites such as Tripadvisor and Trustpilot. This creates an opportunity for sites featuring expert reviews to stand out from the crowd and provide credible and well-founded reviews based on many years of experience in sectors such as gaming. The fact remains that expert review sites have the edge over beat consumer review sites when it comes to credibility as readers have a high level of trust in expert reviewers.