White Paper - Online Ratings & Reviews
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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 ...

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

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White Paper - Online Ratings & Reviews Presentation Transcript

  • 1. Get your customers talking { Harness the real power of online ratings and reviews } White Paper Harness the 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!
  • 2. Get your customers talking { Harness the real power of online ratings and 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 Contents / 2
  • 3. Get your customers talking { Harness the real power of online ratings and reviews } Get your customers talking: This is supported by a recent global survey by Nielsen of 26,486 Internet users in 47 markets which revealed that consumer Harness the recommendations are the most credible form of advertising among of the study’s respondents.1 Elsewhere, social commerce solution provider Bazaarvoice reports a power of online increase in conversion rates for products that have reviews. 2 ratings and reviews 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 Imagine a marketing tool that has the potential to drive them? 3 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 With benefits like these, ignoring the power of customer views and provide insightful product and service feedback. ratings and reviews has the potential to impact on your site’s Online ratings and reviews deliver all this and more. success and bottom line. 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. 1 Nielsen, “Word-of-Mouth the Most Powerful Selling Tool” 2 http://www.bazaarvoice.com/cs_rr_conversion_figleaves.html 3 eMarketer, 2007 Get your customers talking / 3
  • 4. Get your customers talking { Harness the real power of online ratings and reviews } So what is holding online 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 retailers back? 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 The concept of online ratings and reviews is not a new one. 2008 study of 5,000 online shoppers by Forrester showed that You can still access reviews on certain sites that were written in want them, and a 2006 survey by Jupiter Research the 1990s, and the very fact that those sites are still in business showed that of online shoppers use reviews when speaks volumes. Today, it is easier than ever to select the software making a purchase. package that delivers the features you’re looking for at a range of sophistication levels and price points, from specialists including This is unsurprising. A review provides some of the answers any Reevoo, feefo and Bazaarvoice. 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. 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 4 Ibid So what is holding online retailers back? / 4
  • 5. Get your customers talking { Harness the real power of online ratings and reviews } It also delivers convenience with the least possible number of In fact, a 2007 report from Jupiter Research showed that clicks required for the fastest online shopping experience. It is this of the 1,179 consumers polled had opted out of making a increased ease and comfort that converts into improved sales multiple purchase because they could not find the information and greater loyalty. they were looking for on a single product. Indeed, anecdotal experience shows that even those products What’s more, we live in an online world where social interaction receiving less than perfect reviews experience higher conversion through sites like Facebook, MySpace and Bebo is commonplace. rates than those without reviews at all. Discussion of the relative merits of products and services is a regular feature on these sites, so it’s becoming increasingly That said the reality is that the overwhelming majority of reviews important for retailers to be able to interact with the feedback and tend to be positive – of the product ratings received by respond to comments. Bazaarvoice’s clients in the UK (and 80% in the US) are four or five stars out of five. Obviously, having reviews, feedback and links on external blogs For online retailers, the risk of ‘exposure’ should be outweighed by and forums has the benefit of extending your reach. Having them the very real competitive consequences of not carrying reviews. on your own site as well puts you in pole position to capture customers and make the sale. 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. So what is holding online retailers back? / 5
  • 6. Get your customers talking { Harness the real power of online ratings and reviews } The power of a review In addition, the same report found that are likely to consult websites with user reviews before any other source of information. Ratings and reviews are a powerful tool for driving up A more sophisticated approach to ratings and reviews packages conversion rates however the benefits go much wider and deeper enable customers to be highly selective about the reviews they than this single, albeit very important, parameter. choose to trust. BazaarVoice, for example, provide a ‘people like me’ feature that allows the visitor to filter reviews to Benefits that include: improved attitudes towards your site; show those written only by similar people, by age, gender and increased traffic, both to your site and across all trading channels; location. Clearly such ‘peer group’ recommendations can be and better business performance. a powerful sales tool – and the Edelman Trust Barometer has shown that trust in a ‘person like me’ more than tripled between At the heart of these gains is one vital unifying factor. The most 2004 and 2006 from to important consideration, as with every other decision relating to your site, is how an investment in ratings and reviews will Consumers also like and respect websites that carry ratings benefit your customers. Every other benefit will spring from this and reviews. It is a clear demonstration of the site’s transparency one gain. 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 Increased customer interaction that a site willingly carrying poor reviews actually gains in terms of customer attitudes and satisfaction as a result of its integrity and Consumers like the opportunity to read the opinions of their honesty. It contributes to the credibility that helps customers to peers, chiefly because they view them as unbiased sources of trust both the site and the company. 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. 5 Nielsen, op cit. The power of a review / 6
  • 7. Get your customers talking { Harness the real power of online ratings and reviews } Bad reviews can be good for business. This is part of the Deloitte & Touche research shows that of consumers reason behind the increases in customer satisfaction reported in who read reviews then go on to share them with family and friends, two recent reports from Foresee Results. The first, from 2007, potentially extending impact to attract new users to the site. In showed that reviews drive higher purchase satisfaction addition, Bazaarvoice functionality enables syndication with and higher loyalty. The second report, from 2008, external shopping and social networking sites, also significantly recorded 9% higher customer satisfaction levels among expanding the potential reach of your brand into new consumers who recalled seeing reviews on a website. territories. Even more dramatic were the findings of an eMarketer report However, this is just the tip of the iceberg. Reviews also have an from 2007. This showed that UK online retailers report important influence on search engine optimisation (SEO). In a 2007 customer satisfaction rates improving by following eMarketer report, of UK online retailers claimed that implementation of ratings and reviews – an immediate return on consumer-generated activity (such as reviews) had improved investment for those businesses. their SEO. This is partly explained by information from Nielsen Buzzmedia The lesson is simple: to improve the value of your site to which reports that over a quarter of search results link consumers and increase the affection and respect that they to user-generated content. have for it, implement ratings and reviews. Ratings can also have a significant effect on sales levels following a search. According to Bazaarvoice, people who refine A final factor to consider is that reviews quite simply deliver their search results by customer rating, average a sales increase of good, entertaining content. People like to compare the opinions per single visit, growing to over an extended of others with their own, possibly using shared tastes to find and number of sessions. 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. The power of a review / 7
  • 8. Get your customers talking { Harness the real power of online ratings and reviews } The use of ratings and reviews can also dramatically improve Similarly, just four months after holiday firm Hayes & the effectiveness of email marketing campaigns. Online pet Jarvis started to feature real-life traveller reports from supply store, PETCO, reported a five-fold increase in click-through TripAdvisor, people who read the reviews booked holidays rates when it included relevant ratings and reviews content in its at double the rate of those who had not. promotions. Compelling stuff but improved business results don’t depend Reviews also help drive your multi-channel strategy. In 2007, on better conversion alone. Factors like average order a comscore/Kelsey Group report found that of internet values and product return levels also have a vital role to play. users use online reviews before making an offline purchase, and Ratings and reviews have a positive impact on average that over of these said it had a significant influence on their order values, with 27% of shoppers surveyed increasing purchase. Nearly all of these went on to say that the spend by between 5% and 10% and 7% increasing review had been accurate, making it likely that they would continue spend by or more – all achievable with little or no to use this process. So, whether online, email generated or offline, additional marketing spend. ratings and reviews play an important role in driving traffic to your site. The greater insight into a product’s quality and value, that a review provides, also drives down costly and time- Building a bigger business consuming returns. In fact, in 2007, PETCO reported that returns on reviewed products were lower than Naturally, all the above contribute to improved business those with no reviews, providing an important source of performance that so many reports and surveys say is experienced efficiency and cost-reduction. 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. The power of a review / 8
  • 9. Get your customers talking { Harness the real power of online ratings and reviews } Integrating ratings and A new survey by Pitney Bowes has found that of UK consumers believe offline direct marketing is the most likely review into your marketing 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. The impact of ratings and reviews extends beyond website content and the obvious SEO benefit. Retailers are increasingly How else can retailers leverage user generated content across integrating ratings and reviews into their marketing campaigns and their offline channels? With customer reviews you can split test the social media activities. This is a logical progression and 2009 will impact on response rates to adverts using unique URLs and radio see more brands making innovative usage of user generated ads could position top rated products to increase engagement content. and response. For your online marketing, feature ratings and reviews in email and search campaigns to enhance your brand Argos made a bold and logical move at the start of 2009 by messages. integrating online reviews into its print catalogue, with a reach of over half the UK households. That decision instantly put user Of course, you need to balance the testing of the new with the generated content in front of their main audience and highlighted impact on your existing marketing activity. However, with a both the service availability and the value of independent sensible testing strategy we believe that retailers can play with comments. This raises the question of how effective user generated this multi-channel marketing story and learn more about how content can be in driving traffic and sales from offline media into ratings and reviews affect customer engagement. 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. Integrating ratings & review into your marketing / 9
  • 10. Get your customers talking { Harness the real power of online ratings and reviews } The benefits are clear – 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 what next? 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 With an array of positive statistics such as those above, it’s hardly step too far. 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 For those that embrace this transparency, the door is opening next three years, making ratings and reviews a feature of more to the next evolutionary step of online retailing – one where the than half of all retail sites. retailer empowers its customers by enabling them to influence the buying decisions of their peers. 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 In this way they are creating a truly symbiotic relationship, holidays, hotels, restaurants, movies, music, wines, books and in which both ‘partners’ gain: the consumer through easier more. purchasing decisions, and the retailer through an enhanced reputation, an improved customer franchise and better conversion For many businesses, this will involve and require a significant rates. shift in attitude, where the consumer has easier access than ever before to information and opinions on the products they sell. The benefits are clear / 10
  • 11. Get your customers talking { Harness the real power of online ratings and reviews } What are retailers waiting The early adopter for? advantage The business case may be strong – but it would be wrong to It is likely that as more retailers invest in ratings and reviews, suggest that there are no challenges lying in wait for retailers it will at some point become a ‘distress’ purchase for those planning to implement ratings and reviews for the first time. wishing to remain competitive within their market sector. How do they decide if the products or services they sell are We are not yet at that point: remember, a mere 27% of online appropriate for reviews? retailers have made the investment to date, and many of these are gaining benefits significantly. At Reevoo, for example, its retail How do they integrate this new functionality with their own sales partners are reporting sales increases of up to for and marketing strategies? those products that have been reviewed. What are the practical barriers to implementation? There is still significant scope for newcomers to gain the What is the most appropriate solution for them to use? advantages of early adoption, particularly in markets where ratings and reviews are not as yet common currency. The time All important questions and we would happily work with you will come, however, when those who have not made the investment to develop the answers that are most appropriate for your will be left playing catch-up. business. Ultimately, though, the choice is yours – for each business is unique. While some of the considerations you face are shared by Don’t let your business be one of these. competitors in your sector, many are yours and yours alone. Dispel the risk factor, and go transparent! 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. What are retailers waiting for & The early adopter advantage / 11
  • 12. Get your customers talking { Harness the real power of online ratings and reviews } The available options 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 Similarly, you may wish to carefully balance your need for to take full advantage of user generated content without having to sophisticated functionality against the additional cost that incur the additional costs of a 3rd party software solution! investing in a premium solution may involve. With Bazaarvoice, for example, you can buy into a range of potentially valuable Key features of the e-inbusiness ratings and reviews module: functionality that includes external syndication, an interactive ‘ask and answer’ service, search engine optimisation and more. Integrated into the core platform While they all deliver value, the cost of implementation may be Intuitive and user friendly interface higher than you can initially justify, in which case you should Integrated with the content management system to enable consider options including Reevoo and feefo. quick and controlled content updates With Reevoo, the concentration is on ratings and reviews In-built moderation workflow based on a partnership programme with participating retailers, Ability to define access and approval levels to replicate your but additional services include a portal-based pay-per-click service internal approval process that directs consumers from a review page to your site, to actually buy the product. Reviews are submitted in a search engine friendly manner to support your SEO The least costly option of the three is feefo, which provide a ratings and review function for services. Its services include What are the business benefits of this ratings and reviews FeefoFREE, which collates and reports customer feedback on your module? recent sales at no cost. Improve product conversion Here at e-inbusiness we are passionate about providing our Increase average transaction values clients with the tools and techniques they need to increase online sales. It has been shown that your customers are your best Reduce product returns sales people an d providing facilities for your clients to rate and Increase direct customer feedback to provide business insight review your products can improve conversion rates by upwards of 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 The available options / 12
  • 13. Get your customers talking { Harness the real power of online ratings and reviews } We’d love to share our passion for online ratings and reviews For regular updates from our e-Marketing specialists and useful with you and your online team. If you have any questions or links to help increase your search engine marketing awareness, would like to learn more about e-inbusiness and how our online follow our team on Twitter. ratings and reviews or wider e-marketing and e-commerce expertise could drive your online channel, contact us today: Speak to one of our experts now SEO / PPC Specialist a 0845 481 8004 http://www.twitter.com/Devaki_Phatak m information@e-inbusiness.co.uk 8 www.e-inbusiness.co.uk/ratingsandreviews Learn more about online ratings and reviews / 13