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Word of mouth is a proven way of driving sales. When product buyers
give a thumbs-up, the endorsement carries powerful credibility that
retailers and manufacturers cannot duplicate in product descriptions.
Little wonder, then, that customer reviews can pack the same punch
online. Maybe more, because of the Internet's power to distribute
consumer comments more widely and rapidly than word of mouth.
In addition to being a potent means of upping conversion on
favorably reviewed items, customer reviews on e-commerce sites offer
more to retailers. Retailers can leverage the consumer-generated data
in e-mail, catalogs, circulars and in-store signage. And they can feed
what customers are saying online about brands and products into company
wide initiatives on merchandising, marketing, and vendor relationships.
Studies have shown that shoppers who navigate to pages with top-rated
products convert at a 50% higher rate than others. Studies
also found the influence of online customer reviews wasn’t limited to
shopping the site. When a studied retailer conducted an experiment to
test the effects of including customer-generated star ratings in
marketing e-mail, the test campaign had a click-through rate five times
the usual rate. Consumers are highly influenced by the experience of
other consumers—far more than they are by marketing professionals. Many
of those retailers, now with several months or even a year or more of
experience with ratings and reviews, can point to lifts in sales of
reviewed products as a result.
And a 2007 study from the University of Nebraska at Omaha’s College
of Information Science on the effect of reviews at online retailer
NetShops Inc. supports the notion of a causal relationship between
consumers reading online reviews and consumers pushing the Buy button.
The study determined that reviewed products experienced a 26% lift in
sales. E-mail was the first place off-site that many retailers put
online customer reviews to work. Bath & Body Works last year tested
marketing e-mail containing customer ratings and reviews and compared
its performance against that of e-mail without review content. It found
e-mail containing reviews produced an average order value 10.4% higher
than other e-mail. Customers who clicked through on e-mail containing
review content viewed 7.48% more pages on the site, and the average
sale per visitor was 11.46% higher.
Poor reviews
As retailers experiment with new ways to leverage online customer
review content, one of the newest paths has led not to use in other
channels but deeper into site operations. For one thing, merchants are
using poor reviews to get improvements from manufacturers and as a
reason to boot products from the lineup. One retailer who does not wish
to he identified was getting good sales of a product that was an
element of a popular kit. ‘When major complaints about the item
surfaced in reviews on the retailer’s site, the retailer dropped the
item from the kit and included another product of higher quality.
Reviewed products sell
Products that sell are typically attached to reviews. Visitor trends
show they’re starting first by looking at what other customers are
saying. What customers are inputting when they write a review could be
very helpful, In fact, there now are customers who will not make any
purchase without first reading some reviews.
Critical mass
That highlights a limiting factor in leveraging reviews in other
channels or putting them at the center of marketing and planning: the
problem of getting enough reviews on a site to provide meaningful
insight. Any of these expanded uses of review content requires a
critical mass of reviews—enough to serve as a reliable basis from which
to draw conclusions or even make assumptions.
If you only have one or two reviews, it might suggest all kinds of
things that aren’t true, a minimum of 20% of products on a site need to
be covered with at least three to five reviews. The University of
Nebraska study reported a 26% lift in conversion on reviewed products
over those that weren’t reviewed. The most effective way to pump up
review volume is to ask for reviews; some retailers also periodically
offer incentives to encourage review submission, positive or negative.
Some e-commerce systems can be configured to automatically send
purchasers an e-mail that asks for a review three weeks after a
purchase. The response rate is about 20%. To jump-start the process,
offered “discounts” redeemable on merchandise to customers who
submitted a review.
Retailers are just now starting to unearth the deeper potential of
online reviews. In a way, they’re nothing new, because marketers have
always looked to customer advocacy to help them sell products.
But the Internet has taken advocacy to new levels, giving marketers
access to a much bigger pool of feedback than ever before. And the rise
of the consumer voice online demands marketers take it into account.
This makes reviews a potential source of powerful information about
customers that marketers can apply across channels and throughout their
operations.
The market wants content that drives sales. But content is difficult
to produce internally and people are tuning out traditional advertising
content, so marketers are looking at customer reviews as something they
can use in any channel If I am marketing that laser printer, do I want
to get marketing to write a bunch of content that tries to convert? Or
do I want to leverage the content that already has been created by my
customer evangelists?”
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