Customer reviews are known to help engender trust among consumers, and can increase conversion rates for retailers. But what are the challenges? What kind of benefits can they deliver to e-commerce companies?
We spoke to Brett Hurt to find out more. He is the founder and CEO of customer reviews specialist Bazaarvoice. Some of you may remember him from our What’s New In Online Marketing event earlier this year. He has some pretty interesting observations…
In which sectors are reviews particularly effective?
We’re primarily focused on retail. It’s very easy to prove the ROI in retail – we increase conversion and acquisition and we decrease returns as people have more realistic expectations of products. We also increase metrics like average order value.
A study by Shop.org in the US has shown that retail sites have an average conversion of 2.6%. Basically, that means around 97% of consumers that go to a website are not converting, and there is a lot of room for improvement. That’s where we come in.
What actual figures can you give us on conversion and average order value uplift among your clients?
We’ve seen it can lift conversion 20% or more on an e-commerce site. We’ve seen it increase more highly in some cases, and nearly doubling in a couple of cases.
As for average order value, we have seen rises in the order of between 15% and 30%.
That’s through various techniques – for example, by integrating reviews into site search so that you can click to see top rated products within search results. We also see average order value go up when customer ratings and reviews are added to email marketing campaigns.
Why invest in user reviews rather than allocating more budget to usability or search, for example?
What we do is multi-faceted and has great analytical value. If you are a retailer and want to understand why products are getting high levels of returns, people won’t tend to share that information with you in stores because it can be uncomfortable to return a product.
On a site, however, they will tell each other the real reason why they are returning a product. We are an online version of offline word of mouth and it is the first time that has become a digital marketing asset that is analytical.
It can lead to vast measurable improvements, there is proven conversion uplift and it is a competitive imperative for businesses as this information is readily available elsewhere on the web. If consumers go elsewhere to get that information, you can only hope they return.
Do you have any examples of how clients have used reviews to influence their merchandising or offline strategy?
We have seen the product being integrated into online and offline campaigns. Many clients have made review content standard product information in their email marketing campaigns.
We also have a number of clients that have integrated this information into their print catalogues or into their physical stores. You walk into the store and there are snippets of reviews there to help you make a selection.
They have also offered this information to staff, so that staff can use information that is collected directly from their website. We also have examples of where retailers have shared reviews with manufacturers so they can redesign products.
How do you moderate reviews and what do you remove?
We read every single review that comes into the system. We also tag reviews with metadata so that the reviews are usable from an analytics perspective.
We reject reviews that have negative or positive comments that are profane, have a religious statement or generally violate the rules. The rules are stated up front for anyone writing a review.
With every client we work with, we also make sure they are on board with allowing a level of negative reviews. Negative reviews are very important. Negative reviews drive a higher amount of in-session conversion than positive reviews.
This is because people see negative reviews and trust the positive reviews more. We all know we don’t live in a 5-star product world so it has to be an authentic service.
How much seeding goes on?
I think very little. We screen for fraudulent reviews – there are a number of techniques that we use to do that, and we find that less than 1% of reviews are seeded in some way. It’s probably around 0.1%.
It’s usually the manufacturer trying to write a review on that product, but writing it like a marketer rather than the authentic voice of a customer. But that can lead to big problems for them if they are discovered as consumers will cry foul right there on the website.
What costs are retailers looking at when implementing reviews?
We generally have one year contracts with clients and we charge on a monthly basis because we are an ASP. The prices are based on volume – page view volume as well as review volume.
Our ‘Ask and Answer’ product, which allows customers to ask questions about any product or category of product and receive answers from other customers, is priced in a similar way.
We are actually experiencing the cost for all of those hits on the website. We also do all the moderation of the content for our clients, so they don’t have to hire additional staff.
That, traditionally, has been quite a big problem. Overstock.com, one of our clients in the US, used to do this in-house and we cost about half of what they used to spend internally. They had around six people reading reviews full time.
What differences have you found in the responses to reviews from UK and US consumers?
UK shoppers do differ from US shoppers and we have been finding out quite a bit about that. One thing is that there is an overwhelming number of people in the US that say they would trust a brand more if it offered reviews.
We did an opinion poll and found that in the US, 78% of customers put more trust in brands that offer customer reviews. In the UK, it was 53%. We think that as these features aren’t as widely available on UK retail sites, people will respond more strongly in the future when more retailers offer them.
What’s the latest on your UK and European strategy, as well as your progress in targeting other regions?
We are already seeing great positive movement in the UK with companies like figleaves.com, Dell UK, Early Learning Centre and Timberland signing with us. We are currently expanding our London office, opened March 2007, to provide the same high level of services to our UK clients as we do for those in the US.
We are also already focused on expansion into continental Europe with a handful of signed clients there. Our primary base for expansion in Europe and other regions is our broad base of languages (more than 20) we already support; including review collection, moderation and analysis.
What are you working on in terms of integration with other sources of analytics data? What trends do you see happening in this area?
We have integrations with Omniture, Visual Sciences, WebTrends, and Coremetrics. We basically see four levels of integration opportunities with each: (1) conversion metric analysis for products and categories by average rating and number of reviews, (2) use of rating and review variables in relation to other online campaign performance data, (3) merging with peripheral data sources like return rate, and (4) tagging and tracking of natural search traffic and revenue driven by the content.
This all very forward-thinking and provides a very customer-centric variable for use in performance analysis.