White Paper - Online Ratings & Reviews

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Harness the power of online rangs and reviews White Paper Get your customers talking { Harness the real power of online ratings and reviews } Imagine a markeng tool that has the potenal to really deliver to the boom-line Online Rangs and Reviews do just that!

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Imagine a marketing tool that has the potential to drive sales, increase customer satisfaction, enhance loyalty, improve conversion rates and work virally to pass on positive recommendations to potential customers. A tool that creates a space for your customers to communicate with each other, share views and provide insightful product and service feedback. Online ratings and reviews deliver all this and more. Read our white paper to find out more

Transcript of White Paper - Online Ratings & Reviews

Page 1: White Paper - Online Ratings & Reviews

Harness the power of online ratings and reviews

White Paper

Get your customers talking { Harness the real power of online ratings and reviews }

Imagine a marketing tool that has the potential to really deliver to the bottom-line Online Ratings and Reviews do just that!

Page 2: White Paper - Online Ratings & Reviews

Contents

Get you customers talking 3

So what is holding online retailers back? 4 - 5

The power of a review 6 - 8

Integrating online ratings and reviews into your marketing 9

The benefits are clear 10

What are retailers wating for? 11

The early adopter advantage 11

The available options 12

Learn more about online ratings and reviews 13

Get your customers talking { Harness the real power of online ratings and reviews }

Contents / 2

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Get your customers talking: Harness thepower of onlineratings and reviewsImagine a marketing tool that has the potential to drive sales, increase customer satisfaction, enhance loyalty, improve conversion rates and work virally to pass on positive recommendations to potential customers. A tool that creates a space for your customers to communicate with each other, share views and provide insightful product and service feedback. Online ratings and reviews deliver all this and more.

The business case for using online ratings and reviews is clear.Forrester research shows that of online retailers rank customer ratings and reviews as an effective or very effective tactic for driving conversion.

This is supported by a recent global survey by Nielsen of 26,486 Internet users in 47 markets which revealed that consumer recommendations are the most credible form of advertising among of the study’s respondents.1 Elsewhere, social commerce solution provider Bazaarvoice reports a increase in conversion rates for products that have reviews. 2

It’s unsurprising therefore that a 2007 report by research group eMarketer showed that of UK retailers see the improvement in conversion rates that they generate as their key benefit. So why do only of online retailers currently use them? 3

With benefits like these, ignoring the power of customer ratings and reviews has the potential to impact on your site’s success and bottom line.

Get your customers talking { Harness the real power of online ratings and reviews }

Get your customers talking / 3

1 Nielsen, “Word-of-Mouth the Most Powerful Selling Tool”2 http://www.bazaarvoice.com/cs_rr_conversion_figleaves.html 3 eMarketer, 2007

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So what is holding online retailers back? The concept of online ratings and reviews is not a new one. You can still access reviews on certain sites that were written in the 1990s, and the very fact that those sites are still in business speaks volumes. Today, it is easier than ever to select the software package that delivers the features you’re looking for at a range of sophistication levels and price points, from specialists including Reevoo, feefo and Bazaarvoice.

Surely now it’s time for more retailers to make the leap into total transparency, and let their customers tell one another what they really think.

So why do of online retailers still not use consumer ratings and reviews on their websites? 4

The question being asked by retailer is ‘what is the risk’? Is there a risk of exposing the products and services on which the retailer depends, to public scrutiny and possible derision?

All the evidence, however, suggests that there is no risk – just opportunity. Firstly, consumers like to see ratings and reviews: a 2008 study of 5,000 online shoppers by Forrester showed that want them, and a 2006 survey by Jupiter Research showed that of online shoppers use reviews when making a purchase.

This is unsurprising. A review provides some of the answers any sensible consumer would ask before making a purchase. It also gives them the information they’re looking for in one place along with the guidance they seek and reassurance they need and the opportunity to buy.

Get your customers talking { Harness the real power of online ratings and reviews }

So what is holding online retailers back? / 44 Ibid

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It also delivers convenience with the least possible number of clicks required for the fastest online shopping experience. It is this increased ease and comfort that converts into improved sales and greater loyalty.

Indeed, anecdotal experience shows that even those products receiving less than perfect reviews experience higher conversion rates than those without reviews at all.

That said the reality is that the overwhelming majority of reviews tend to be positive – of the product ratings received by Bazaarvoice’s clients in the UK (and 80% in the US) are four or five stars out of five.

For online retailers, the risk of ‘exposure’ should be outweighed by the very real competitive consequences of not carrying reviews.

Since customers like the opportunity to provide and read feedback, if your website doesn’t provide it they may go elsewhere. Not only could you lose the sale that would otherwise have been yours, but you might also lose that customers’ business for ever.

In fact, a 2007 report from Jupiter Research showed that of the 1,179 consumers polled had opted out of making a multiple purchase because they could not find the information they were looking for on a single product.

What’s more, we live in an online world where social interaction through sites like Facebook, MySpace and Bebo is commonplace. Discussion of the relative merits of products and services is a regular feature on these sites, so it’s becoming increasingly important for retailers to be able to interact with the feedback and respond to comments.

Obviously, having reviews, feedback and links on external blogs and forums has the benefit of extending your reach. Having them on your own site as well puts you in pole position to capture customers and make the sale.

Get your customers talking { Harness the real power of online ratings and reviews }

So what is holding online retailers back? / 5

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The power of a reviewRatings and reviews are a powerful tool for driving up conversion rates however the benefits go much wider and deeper than this single, albeit very important, parameter.

Benefits that include: improved attitudes towards your site; increased traffic, both to your site and across all trading channels; and better business performance.

At the heart of these gains is one vital unifying factor. The most important consideration, as with every other decision relating to your site, is how an investment in ratings and reviews will benefit your customers. Every other benefit will spring from this one gain.

Increased customer interaction

Consumers like the opportunity to read the opinions of their peers, chiefly because they view them as unbiased sources of information with no commercial subtext. This makes it easier for them to choose the products they are interested in.

Data from global research company Nielsen reveals that consumer recommendations were the most credible form of ‘advertising’ among of the 26,486 people polled 5, and a Marketing Sherpa report from 2007 said that of respondents would trust consumer reviews over the opinions of a critic.

In addition, the same report found that are likely to consult websites with user reviews before any other source of information.

A more sophisticated approach to ratings and reviews packages enable customers to be highly selective about the reviews they choose to trust. BazaarVoice, for example, provide a ‘people like me’ feature that allows the visitor to filter reviews to show those written only by similar people, by age, gender and location. Clearly such ‘peer group’ recommendations can be a powerful sales tool – and the Edelman Trust Barometer has shown that trust in a ‘person like me’ more than tripled between 2004 and 2006 from to

Consumers also like and respect websites that carry ratings and reviews. It is a clear demonstration of the site’s transparency and willingness to share the truth with the customer, warts and all. In fact, in a form of reverse psychology, there is a definite sense that a site willingly carrying poor reviews actually gains in terms of customer attitudes and satisfaction as a result of its integrity and honesty. It contributes to the credibility that helps customers to trust both the site and the company.

Get your customers talking { Harness the real power of online ratings and reviews }

The power of a review / 65 Nielsen, op cit.

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Bad reviews can be good for business. This is part of the reason behind the increases in customer satisfaction reported in two recent reports from Foresee Results. The first, from 2007, showed that reviews drive higher purchase satisfaction and higher loyalty. The second report, from 2008, recorded 9% higher customer satisfaction levels among consumers who recalled seeing reviews on a website.

Even more dramatic were the findings of an eMarketer report from 2007. This showed that UK online retailers report customer satisfaction rates improving by following implementation of ratings and reviews – an immediate return on investment for those businesses.

The lesson is simple: to improve the value of your site to consumers and increase the affection and respect that they have for it, implement ratings and reviews.

A final factor to consider is that reviews quite simply deliver good, entertaining content. People like to compare the opinions of others with their own, possibly using shared tastes to find and select products they suspect they will like. This is another means of encouraging people to stay on your site.

Driving up traffic

This positive impact doesn’t end there. Ratings and reviews have the potential to play a key role in driving new and qualified traffic to your website.

Deloitte & Touche research shows that of consumers who read reviews then go on to share them with family and friends, potentially extending impact to attract new users to the site. In addition, Bazaarvoice functionality enables syndication with external shopping and social networking sites, also significantly expanding the potential reach of your brand into new territories.

However, this is just the tip of the iceberg. Reviews also have an important influence on search engine optimisation (SEO). In a 2007 eMarketer report, of UK online retailers claimed that consumer-generated activity (such as reviews) had improved their SEO.

This is partly explained by information from Nielsen Buzzmedia which reports that over a quarter of search results link to user-generated content.

Ratings can also have a significant effect on sales levels following a search. According to Bazaarvoice, people who refine their search results by customer rating, average a sales increase of per single visit, growing to over an extended number of sessions.

Get your customers talking { Harness the real power of online ratings and reviews }

The power of a review / 7

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The use of ratings and reviews can also dramatically improve the effectiveness of email marketing campaigns. Online pet supply store, PETCO, reported a five-fold increase in click-through rates when it included relevant ratings and reviews content in its promotions.

Reviews also help drive your multi-channel strategy. In 2007, a comscore/Kelsey Group report found that of internet users use online reviews before making an offline purchase, and that over of these said it had a significant influence on their purchase. Nearly all of these went on to say that the review had been accurate, making it likely that they would continue to use this process. So, whether online, email generated or offline, ratings and reviews play an important role in driving traffic to your site.

Building a bigger business

Naturally, all the above contribute to improved business performance that so many reports and surveys say is experienced by online retailers who implement ratings and reviews on their websites.

However it is the impact on conversion rates where the results can be startling. For example, when Bass Pro Shops launched a new ‘Top-Rated Products’ page, it rapidly saw conversion rates that were ahead of the site’s average.

Get your customers talking { Harness the real power of online ratings and reviews }

The power of a review / 8

Similarly, just four months after holiday firm Hayes & Jarvis started to feature real-life traveller reports from TripAdvisor, people who read the reviews booked holidays at double the rate of those who had not.

Compelling stuff but improved business results don’t depend on better conversion alone. Factors like average order values and product return levels also have a vital role to play. Ratings and reviews have a positive impact on average order values, with 27% of shoppers surveyed increasing spend by between 5% and 10% and 7% increasing spend by or more – all achievable with little or no additional marketing spend.

The greater insight into a product’s quality and value, that a review provides, also drives down costly and time-consuming returns. In fact, in 2007, PETCO reported that returns on reviewed products were lower than those with no reviews, providing an important source of efficiency and cost-reduction.

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Integrating ratings and review into your marketingThe impact of ratings and reviews extends beyond website content and the obvious SEO benefit. Retailers are increasingly integrating ratings and reviews into their marketing campaigns and social media activities. This is a logical progression and 2009 will see more brands making innovative usage of user generated content.

Argos made a bold and logical move at the start of 2009 by integrating online reviews into its print catalogue, with a reach of over half the UK households. That decision instantly put user generated content in front of their main audience and highlighted both the service availability and the value of independent comments. This raises the question of how effective user generated content can be in driving traffic and sales from offline media into the online store.

US apparel retailer Free People went one step further and engaged with their community to interview their top reviewer, ‘beachcat’. They turned up at her home with loads of free clothes and spent the day interviewing her about her likes and dislikes, photographing her in the Free People clothes. They then posted a dedicated blog entry on the day with quotes from their reviewer and seeded the photos socially via their Flickr account.

A new survey by Pitney Bowes has found that of UK consumers believe offline direct marketing is the most likely to get them to visit the website of a company they have not bought from before. This challenges retailers to think about how they use content across all marketing channels to drive online traffic and sales.

How else can retailers leverage user generated content across their offline channels? With customer reviews you can split test the impact on response rates to adverts using unique URLs and radio ads could position top rated products to increase engagement and response. For your online marketing, feature ratings and reviews in email and search campaigns to enhance your brand messages.

Of course, you need to balance the testing of the new with the impact on your existing marketing activity. However, with a sensible testing strategy we believe that retailers can play with this multi-channel marketing story and learn more about how ratings and reviews affect customer engagement.

Get your customers talking { Harness the real power of online ratings and reviews }

Integrating ratings & review into your marketing / 9

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The benefits are clear – what next? With an array of positive statistics such as those above, it’s hardly surprising that significantly greater uptake of reviews and ratings is expected in the near future. It is quite conceivable that the proportion of retailers using them will at least double over the next three years, making ratings and reviews a feature of more than half of all retail sites.

This will represent a significant shift from the early years of the mainstream internet, when the majority of ratings and reviews were about ‘experience-based’ products and services, including holidays, hotels, restaurants, movies, music, wines, books and more.

For many businesses, this will involve and require a significant shift in attitude, where the consumer has easier access than ever before to information and opinions on the products they sell.

It’s hard to quantify quite how big a mindset change this might be for some retailers, established in a world where the likes of mystery shoppers, Which? reports, professional critics and public opinion have traditionally been sources of stress and anxiety. Now, they will be actively inviting consumers to share their opinions and experience – a radical move that some might still regard as one step too far.

For those that embrace this transparency, the door is opening to the next evolutionary step of online retailing – one where the retailer empowers its customers by enabling them to influence the buying decisions of their peers.

In this way they are creating a truly symbiotic relationship, in which both ‘partners’ gain: the consumer through easier purchasing decisions, and the retailer through an enhanced reputation, an improved customer franchise and better conversion rates.

Get your customers talking { Harness the real power of online ratings and reviews }

The benefits are clear / 10

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What are retailers waiting for?The business case may be strong – but it would be wrong to suggest that there are no challenges lying in wait for retailers planning to implement ratings and reviews for the first time.

How do they decide if the products or services they sell are appropriate for reviews?

How do they integrate this new functionality with their own sales

and marketing strategies?

What are the practical barriers to implementation?

What is the most appropriate solution for them to use?

All important questions and we would happily work with you to develop the answers that are most appropriate for your business.

Ultimately, though, the choice is yours – for each business is unique. While some of the considerations you face are shared by competitors in your sector, many are yours and yours alone.

For example, high street and online fashion retailer New Look has clothing ranges that last for just six weeks at a time. Successfully integrating a ratings and reviews strategy into its wider marketing activities, providing scope for sufficient numbers of consumer to post reviews over a short time-scale, demands a quite different approach to that of a music retailer whose products may be available for decades.

Get your customers talking { Harness the real power of online ratings and reviews }

What are retailers waiting for & The early adopter advantage / 11

The early adopter advantageIt is likely that as more retailers invest in ratings and reviews, it will at some point become a ‘distress’ purchase for those wishing to remain competitive within their market sector.

We are not yet at that point: remember, a mere 27% of online retailers have made the investment to date, and many of these are gaining benefits significantly. At Reevoo, for example, its retail partners are reporting sales increases of up to for those products that have been reviewed.

There is still significant scope for newcomers to gain the advantages of early adoption, particularly in markets where ratings and reviews are not as yet common currency. The time will come, however, when those who have not made the investment will be left playing catch-up.

Don’t let your business be one of these.Dispel the risk factor, and go transparent!

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The available optionsSimilarly, you may wish to carefully balance your need for sophisticated functionality against the additional cost that investing in a premium solution may involve. With Bazaarvoice, for example, you can buy into a range of potentially valuable functionality that includes external syndication, an interactive ‘ask and answer’ service, search engine optimisation and more.

While they all deliver value, the cost of implementation may be higher than you can initially justify, in which case you should consider options including Reevoo and feefo.

With Reevoo, the concentration is on ratings and reviews based on a partnership programme with participating retailers, but additional services include a portal-based pay-per-click service that directs consumers from a review page to your site, to actually buy the product.

The least costly option of the three is feefo, which provide a ratings and review function for services. Its services include FeefoFREE, which collates and reports customer feedback on your recent sales at no cost.

Here at e-inbusiness we are passionate about providing our clients with the tools and techniques they need to increase online sales. It has been shown that your customers are your best sales people an d providing facilities for your clients to rate and review your products can improve conversion rates by upwards of

Get your customers talking { Harness the real power of online ratings and reviews }

The available options / 12

You won’t be surprised to hear therefore that we are announcing our own fully integrated ratings and reviews module in to our best-of-breed e-commerce offering. This new module will be shipped with our latest e-inbusiness platform which enables you to take full advantage of user generated content without having to incur the additional costs of a 3rd party software solution! Key features of the e-inbusiness ratings and reviews module:

Integrated into the core platform

Intuitive and user friendly interface

Integrated with the content management system to enable quick and controlled content updates

In-built moderation workflow

Ability to define access and approval levels to replicate your internal approval process

Reviews are submitted in a search engine friendly manner to support your SEO

What are the business benefits of this ratings and reviews module?

Improve product conversion

Increase average transaction values

Reduce product returns

Increase direct customer feedback to provide business insight

Answer customer questions direct through your community

Reduce burden on customer services via email and phone calls as review content helps to answer many queries

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For regular updates from our e-Marketing specialists and useful links to help increase your search engine marketing awareness, follow our team on Twitter.

Get your customers talking { Harness the real power of online ratings and reviews }

Learn more about online ratings and reviews / 13

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Speak to one of our experts now0845 481 8004

[email protected]

www.e-inbusiness.co.uk/ratingsandreviews

SEO / PPC Specialisthttp://www.twitter.com/Devaki_Phatak

We’d love to share our passion for online ratings and reviews with you and your online team. If you have any questions or would like to learn more about e-inbusiness and how our online ratings and reviews or wider e-marketing and e-commerce expertise could drive your online channel, contact us today: