Barcamp Talk: Growing A Business With Online Reviews

Growing A Business With Online Reviews

Filling In The Gaps

Online reviews

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Profit

What this presentation covers

Number of years each channel took to reach a market audience of 50 million? Radio: 38 Television: 13 Internet: 4 Souce: http://www.un.org/cyberschoolbus/briefing/technology/tech.pdf

87% of Australians have purchased something over the Internet. 53% of Australians made a purchase in the last month Source: ACNielsen Global Online Shopping Habits Study

Source: Consumer survey, JC Williams Group, 2006 91% of survey respondents cited consumer content as the #1 aid to a buying decision

The crowd is building a new channel to drive their buying decisions

Customers can get advice from each other directly

For many businesses, your actions speak louder than your advertising department

What Determines Reviews?

Audience

Market

Product

Audience Factors

Education level (Selling to experts or businesses)

Enthusiasm (Customer word-of-mouth)

Market Factors

Long tail or emerging markets (Limited exposure from traditional media)

Commoditisation (Ease of comparison)

Low barriers to entry

Customer lock-in

Market maturity (Ability to innovate)

Lack of incumbents (Brand experience)

Product Factors

Product is sold in volume / Service is repeatable (Reviews are reliable)

Expense

Upfront pricing

Ongoing expenses

Complementary products

Information assymetry (Buyers know more than sellers)

Hints For Small Business

Most Word Of Mouth Is Positive

80% of product ratings on the Bazaarvoice review site are 4 or 5 stars out of 5.

Source: “J Curve,” Bazaarvoice and Keller Fay

Small businesses usually don't have economies of scale, or well-established brands.

Differentiated on service? Good word of mouth is a cheap way to grow.

Online reviews magnify word of mouth... 10x, 100x, even 1000x

How Do You Encourage Reviews? Got a store? Add a point of sale reminder Track how your customers find you: Referrer logs Customer surveys

Take Direct Action

Contribute to an independent wiki page

Add customer testimonials and case studies to your site

Track blog mentions and embed them as an RSS feed

Start you own company blog

How Do Reviews Fit Into Existing Channels? Channel Independent Expert Comes To You Based On Customer Experience Direct Advertising Indirect Advertising Professional Reviews Amateur Reviews

Crowdsourcing Is Powerful

Reviews from fellow consumers have greater influence than those by professionals.

Source: comScore/The Kelsey Group, October 2007

What Makes A Good Customer Reference?

Customers who are the most similar to you

Case studies from impressive customers are not as valuable as case studies from happy, but typical customers

The internet lets your customers unionise against you But they don't strike, they just go your competitors.

Future Of Review Sites?

Hybrid of professional reviews and moderation atop amateur content?

May not be entirely advertising supported. Can use referral fees or negotiate pooled funding from businesses

Niche review sites run by enthusiasts will always have a place

Existing media voices and brands may extend their websites to provide online reviews of their own products, eg David Jones, Vogue or Microsoft

Example Australian Review Sites Review Space Site General Reviews Yabble Restaurants Eatability Teachers Rate My Teacher ISPs Whirlpool Web Hosting Hosting Jury Wikis Wiki Matrix Employers Revyr

Discussion Time Presented in Sydney, AU on 15 Nov 08 by David Soul Originally posted on david-soul.com