White Paper - Online Ratings & Reviews

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!


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


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


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


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


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


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


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


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


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


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


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


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

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