White Paper: Ratings and Reviews

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I wrote this paper to educate our internal teams about the impact of user-generated content, such as ratings and reviews, on sales.

I wrote this paper to educate our internal teams about the impact of user-generated content, such as ratings and reviews, on sales.

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  • 1. RATINGS AND REVIWS:YOUR SALES DEPEND ONTHEMPoint of ViewOctober 2010 1
  • 2. In the mid-1900s, limited brand choices and communication channels meant that companiescontrolled the messaging (i.e., mass marketing). Flash forward to today’s marketplace in whichconsumers are inundated by media choices and advertisements. As a result, consumers ignorewhat is irrelevant or what they don’t have time for, meaning searching and purchasing are doneon their terms — when they’re ready. Today’s media- and search-savvy consumers now controlthe content. Nowhere is this power shift — from business to consumer — more prevalent thanuser-generated content such as ratings and reviews.Through user-generated ratings, reviews and peer referrals — which have grown in importancethanks to social-networking sites online — consumers are playing an ever-increasing role ininfluencing purchase decisions. But in an age in which consumers control the content, marketershave become stunned by new data that suggests online content has reached a plateau.According to Forrester Research, while social networks are attracting users at record rates(Facebook now has more than 500 million users), the creation of user-generated contentremained consistent over the last year. For example, one-third of U.S. consumers watch user-generated videos on YouTube, yet only 10 percent upload videos of their own.Turning to proprietary research, our Local Search Usage Study (2010) shows a growingimportance is being placed on consumer-generated ratings and reviews (up two percent over2009 and three percent over 2008). That growth is due, in part, to more social and mobile usersseeking ratings and reviews during the purchase process (78 and 71 percent, respectively); infact, both figures have grown steadily since 2008.But while more consumers are valuing ratings and reviews, only 23 percent of all searchers(across all search types/platforms) have submitted original content. Social networkers andmobile users demonstrate the highest propensity to write ratings and reviews (38 and 39percent, respectively).As user-generated ratings, reviews and referrals continue to shape purchase decisions,businesses must understand how such content affects the search landscape, not to mentionbrand reputation and, ultimately, sales. In that light, businesses need to encourage shoppers toleave their opinions so that future customers will be enticed to purchase. While what you writeabout your own products and services may be true, shoppers will find your marketing contentdifficult to believe; they’d rather turn to others who have shared experiences with yourbrand — a shining example of how consumers control the content. And since you can’t controlwhat consumers say about you, you can monitor the perception of your brand to make smarter,informed shoppers.Here are a few tips to encourage customers to leave feedback about your brand in general, aswell as the products and services that you offer: 2
  • 3. 1. Ask.It’s as simple as that. Whatever methods you use to solicit feedback, make it known that youvalue and appreciate your customers’ opinions. Explain the importance of leaving ratings andreviews: so you can improve. But realize that by asking for feedback, you are opening the doorto negative criticism; however, such critiques should not be feared or addressed withhypersensitivity.Studies show that even negative reviews can increase conversions. That’s because theappearance of only positive ratings and reviews can tarnish a company’s credibility. Negativecomments are also considered helpful by consumers. Furthermore, backlash can do exactlywhat you set out to achieve in the first place: to improve. Imagine how insights into poorexperiences could help you fix issues within your departments (e.g., customer service) and theproducts/services that you sell.2. Make the feedback process quick and easy.A user’s experience with your brand doesn’t end with the purchase transaction. When youconceptualize ways to improve the experience, you must factor commenting into the equation.By streamlining searching and commenting in a central location, you will increase the likelihoodof securing feedback.Since our proprietary research suggests that a majority of consumers research online, theInternet seems like the logical place to streamline search and feedback. But too many clicks or alengthy review process will only deter consumers from leaving the feedback that businesses sodesperately need to improve. Try these tactics to improve feedback efficiency and overallresponse rates: a. Incorporate a web form at the point of purchase. By placing an online form in front of customers’ eyes during the check-out phase, you are targeting your buyers when their purchases are fresh in their minds. This also promotes an element of convenience for the shopper because everything is contained to a single visit. For in-store transactions, ask your customers to go online (when they get home) to complete a brief survey or to leave feedback; a print postcard containing the URL can serve as a reminder when they leave your store. In a recent development, Google is prepared to distribute millions of custom mobile devices to small businesses in the U.S. The goal is to provide in-store customers with a way to check in at local businesses — much like Facebook Places and foursquare — as well as rate the businesses and purchase items via Google Checkout. b. Send a follow-up email. Once you have secured an email database of your online and/or in-store customers, send customized messages based on their purchases within the past year. Netflix does a good job of this by deploying emails that ask users to rate 3
  • 4. their recent movie rentals (each email links to a landing page associated with a user’s account). In the email copy, consider something like this: Dear [Customer], You recently purchased [product] from us. Thank you for your business. In an effort to continue improving our service to you, please take a few minutes to rate your purchase and experience with us. We value your input! c. Within the online-transaction and/or shipping receipt, embed a link to a rating system or a web form. In doing so, customers will always have the link on hand (for as long as they keep their receipt). If you are shipping a product to a customer, it never hurts to try a traditional method of dropping a print postcard within each package; on the postcard, ask the customer to visit a URL to rate his or her experience with you. d. Use surveys. Whether your customers purchase directly online or via phone, offer short surveys to gather feedback. Two-minute surveys can be attached to the conclusion of phone calls. Or use an affordable, Web-based survey program such as SurveyGizmo, which allows you to embed questionnaires directly within emails or social-networking pages. Both methods provide immediate results. e. Portray feedback on your website. Sites like Amazon and eBay are built for this functionality. By adding expert content, answering customers’ questions or featuring ratings directly on your site, you are helping existing customers give potential customers all the information they need to buy — all during the search process (and purchase process if you enable online ordering). In essence, you are putting your customers to work for you. And the payoff is huge because potential shoppers place more trust and confidence in peers’ opinions than anything you could ever say about your brand.3. Keep it confidential.Refrain from asking for identifying information when featuring ratings and reviews directly onyour website. With the social-networking boom of the 2000s, it seems odd that consumerswould hesitate to share information publicly. After all, they openly share videos, birthdates,photos and whereabouts via Facebook, Flickr, Twitter and more. But consumers are more apt toshare information when they’re not forced into it. Sharing private information is, and always willbe, a sensitive subject among consumers, especially when it comes at the request of businesses.To increase response rates, keep your customers’ identities anonymous during the rating orreview process. At the very least, enable usernames or profiles that act as cyber curtainsbetween actual identity and online identity. A shining example of this is a service from theYellow Pages Group; its My Yellow Pages™ Account allows users to write reviews and to sharenewly discovered places with others, while keeping their identities protected. 4
  • 5. 4. Make it worth their while.In an economy driven by loyalty programs, consumers are attracted to incentives. To encourageyour shoppers to spend a little extra time with you, incorporate an incentive-based or tieredrating/review system in which users get rewarded for their opinions. Whether you offer fivepercent off the next purchase or free shipping, customers will comment more if they knowsomething is in it for them. The slight price reduction via incentives will pay dividends in the endbecause you’ll be able to harvest necessary insights into how you can increase sales overall.5. Promote your brand socially.Now more than ever, consumers are more influenced by the opinions of their peers. While youcan feature ratings and reviews on your site to demonstrate that you value opinions, consumerswill place more trust in content if it is available apart from your proprietary website. That’s whymore consumers are flocking to social networks for business information, which has spurred thenew marketing mantra of “Go where your consumers are.”According to our Local Search Usage Study, 69 percent of consumers are more likely to use localbusinesses if they have information available on social-networking sites. As social-networkingusage continues to affect search, companies need to develop a presence for their brands viasocial marketing. What’s more, most social sites offer free services to businesses, meaning socialmarketing can be a cost-effective option to grow your business.By establishing profile pages on the platforms that your customers are already using, they’remore likely to follow you, and you’re more likely to achieve optimal engagement. In the eventthat consumers are searching these platforms for your brand, you’ll be available to them. Butwith an abundance of social sites available today, determining the platforms that consumers areusing can be challenging for those new to this space. Consider claiming your business’ listing onFacebook Places, Twitter Places, foursquare and Yelp, to name a few (many of these servicesoffer window decals for display at your business to let shoppers know that you’re online andopen to feedback).One of the key services, Yelp, acts as an Internet Yellow Pages (IYP) site in the form of businesslistings and as a social-networking platform in the form of ratings/reviews. By appealing toconsumers looking for business information and peer recommendations, Yelp acts as a one-stopsolution in the search process. Plus, IYP searchers may be more inclined to leave feedback if theoption exists on the sites they’re searching. A new partnership has made it easier for consumers,who have reviewed products on Yelp, to share their input via Facebook. It works like this: After logging in on either Yelp or Facebook, users can click “Like” within business profiles on Yelp. 5
  • 6. Clicking the “Like” button on Yelp integrates with Facebook’s social plug-in, meaning users will also “Like” those businesses on Facebook. As a result, liked businesses will show up on users’ Facebook profiles with links that redirect to Yelp’s business pages. Once users click “Like,” new users who land on Yelp will be able to see which Facebook friends also follow those businesses. Users will also have an opportunity to read friends’ reviews regarding their experiences.Through Facebook’s Social Graph, the well-known “Like” button is appearing across the WorldWide Web. In short, it enables users to log in on Facebook, then like particular topics, posts,reviews, etc. on third-party sites. The information is ultimately linked back to users’ Facebookprofiles. Now, you can even incorporate the Social Graph into your email campaigns, productpages and blog. With one click of this button, users are increasing brand exposure on yourbehalf, and you are identifying brand advocates to spread your messaging virally through word-of-mouth advertising. In this regard, customers can act as sales associates, but with muchgreater reach and influence among potential shoppers.6. Actively participate.Respond to consumer feedback with a little of your own. No matter how you solicit ratings andreviews, always respond to the feedback — both positive and negative. Positive feedback shouldbe returned with a note of thanks, then share it with your internal departments so that theyknow what is resonating with customers (positive reinforcement can go a long way). Negativefeedback, on the other hand, can be tricky, so let’s focus on social-networking sites to paint aclearer picture.According to our Local Search Usage Study 2010, 81 percent of social networkers believe that itis important for local businesses to respond to questions and complaints on social sites. Basedon this research, consumers obviously want you to get involved. It also means that establishinga social presence for your brand, only to abandon it, is considered a poor practice. If you enterthis space, you must engage your audience.Since social sites come with the added luxury of instant feedback in the form of comments, youcan gain immediate insights into how consumers feel about your brand. This enables you to stayin touch with customers and their wants, which, in turn, will enhance your company andproduct development. If consumers are unsure about the products or services to purchase fromyou, this is a prime opportunity to guide them in determining what will best meet their needs.However, if consumers express dissatisfaction with your brand via social networking, informthem that you’ll address their concerns privately. Then, provide an email address or phonenumber to handle the issue offline, so others aren’t drawn into the mix. 6
  • 7. ConclusionSearchers today have become savvy and impatient, meaning you have very little time to appearat the forefront of their search experience. And key ingredients in the search process — onesthat will help you convert leads into sales — are user-generated ratings and reviews. If searcherscannot find this content about you, then they may bypass you altogether. Keep in mind that, inthe end, ratings and reviews are all about making smarter shoppers. The aforementionedcontent improves the search experience and helps shoppers make confident decisions.Finally, the presence of user-generated content can help small- and medium-sized businessescompete in a saturated marketplace by adding brand visibility. Since a majority of consumersprefer to stay within local markets to complete their purchase transactions, local businesses cancapitalize on this unique opportunity to instill trust, confidence and a positive brand reputationamong target consumers — all of which will, in turn, help local consumers pick local businesses. 7