Customer reviews make a difference

Posted on August 7, 2007 9:42 am by | Participatory Communication

It was a big deal when Wal*Mart announced that all of its products would be open to customer reviews on the big-box retailer’s website. While customer reviews have long been a staple of companies like Amazon.com, Wal*Mart’s adoption of the practice signalled that online customer reviews was going mainstream.

Reserach released recently (and found via eMarketer) suggests it’s a smart move in more ways than one. The “Social Commerce 2007” study, conducted by e-consultancy and Bazaarvoice, reveals that customer reviews increases everything from site traffic to sales.

Shel Holtz

Some results from survey respondents when asked about the impact of customer-generated ratings and reviews:

  • 56% said conversions increased
  • 77% said site traffic increased
  • 42% said the average value of an order increased
  • 73% said customer retention and loyalty increased
  • 59% said search engine optimization was improved

About a third of the study’s participants expressed concern about negative reviews, the biggest obstacle to greater adoption of the practice. “But retailers are finding that they can improve conversion rates, drive sales and increase customer satisfaction even if customers aren’t necessarily singing their praises all the time,” according to Linus Gregoriadis, E-consultancy’s head of research.

Another survey—last year’s MPlanet study from the American Marketing Association—indicates that consumers rely on reviews mostly for more complicated products. MPlanet also noted that the reviews are taken to heart mostly for high-priced products and consumer electronics.

Have you noticed yourself being influenced more by products accompanied by customer reviews?

08/07/07 | 2 Comments | Customer reviews make a difference

 

Comments

  • 1.I agree that reviews are helpful to consumers and we'll see more and more retailers adopting them.

    However, there are some issues that retailers ought to keep in mind when offering customer reviews:

    One is the "cold start problem." Don't think that just because you're allowing people to write reviews that people will. Research has shown that people are far less likely to write a first review than a second, third, or fourth one for a given product.

    To combat the cold start problem, make sure your review system is tied in with your sales system. Follow up with your customers a few weeks after they bought the product to prompt them to write a review.

    An ancillary benefit is that this gives you an opportunity to reach out and connect with that customer again. Instead of just asking for a review, give an incentive to write one and suggest other products that might go along with whatever the customer bought in the first place.

    The other issue to consider is "sku matching." If someone buys a pink iPod Nano, should the review be visible under the description of the blue one? What about the paperback vs. hardcover vs. audio edition of a book? There are no set answers to this one, but it's something to consider.

    There is a movement afoot to establish an open XML standard for reviews that can be shared among many websites. While I think this would be very beneficial to both buyers and sellers, these efforts have been underway for many years and have not gotten off the ground.

    Just some food for thought.

    Rob

    Rob Wolf | August 2007 | Mercer Island, WA

  • 2.Good points Rob. Especially the one about reaching out to customers again. We have found that people who write reviews are your more loyal and active. Reviews are a great way to 'unearth' a segment of your customers you want to reach. Our hosted solution integrates with clients' my account system so they can identify the reviewer, and therefore their more vocal customers.

    On SKU matching, the product family 'roll up' is up to the retailer. Different color ipods can roll up to the same sku or family...so a review on a pink ipod is the same as a blue. It's commonplace on Amazon, Zappos, shopping portals and with our system to have this rollup.

    In full disclosure, I'm CMO at Bazaarvoice.

    Sam Decker | August 2007 | Austin, TX

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