Make no doubt about it, social commerce is a reality online. From online reviews to cutting-edge social media experiments, user-generated content is playing an increasingly important role amongst businesses that sell and market online.

Bazaarvoice is a provider of social commerce technology and services. We spoke with Sam Decker, the company’s Chief Marketing Officer, about the state of the market and how companies can make use of user-generated content to benefit their businesses.

Tell me a little bit about the state of the online reviews market today as you see it. It seems that most major retailers are using reviews in some fashion and accept the role they play in driving traffic and sales. Where do we go from here?

It should be clear to retailers that reviews are ‘table stakes’ in customers’ eyes. Customers expect to see them before buying. 80% of shoppers over Christmas shopping season sought out reviews before buying. Yet, still, not all retailers have reviews, so there’s still growth.

Those that have reviews, have a lot of opportunity to leverage their customers’ content through integration with navigation, email and advertising. Just with reviews, there’s a huge opportunity to get more from the content and transform the marketing, business decisions and culture. And from there, retailers can engage influencers in new forms of content, such as Q&A and stories.

User-generated content (UGC) is the hot topic right now but many businesses are not sure how they can use it to their benefit. How can, and how should, companies be making the most of UGC?

First, they should start collecting UGC that is relevant to their shoppers as soon as possible. UGC is an appreciating asset. The more you get, the more benefit you get; more data, more SEO, higher conversion, etc. Reviews are an obvious type of UGC because you know as a consumer yourself it helps you buy. And because of their usefulness, credibility, and relevance you can use them through other marketing vehicles and initiatives.

We help clients with best practices for using them in catalogues, search adverts, marketing copy, email, etc. They can use it to train phone and retail associates. They can use it to enrich conversations with suppliers. Then, expand the view of UGC to consider other forms that help shoppers.

Shoppers have questions on products before they buy. So allowing customers to ask and answer these questions directly on the product page helps drive conversion, drive down calls, and reduce returns. And more recently, user-generated stories are used to drive customer engagement, site traffic and campaigns. The key is to collect and amplify content that is relevant to potential customers.

What sort of impact does UGC have the potential to make within an organization and what do businesses and their managers have to do to realize that potential?

Reviews are a ‘Trojan Horse’ (if you will) of customer centricity. Usually it’s an online executive that brings UGC onto the site to drive conversion or SEO traffic. Little did they know that soon the entire company would start paying attention to what customers have to say every day. It’s this daily visibility of what customers have to say about the products you sell that creates ‘Customer Oxygen’.

The daily, democratised availability of data based on what customers says changes how retailers buy products, merchandise, write copy, talk to customers, and segment customers. To realise the potential managers have to make the data accessible across functions, share stories of the impact UGC has made, and watch what happens with a smile on their face!

It seems that most brands have realized that to get value out of UGC, they have to join the conversation. But when it comes to getting involved, it’s understandable that most brands have some trepidation. You only need to look at the recent ‘Amazonfail’ and Domino’s situations to see why brands are often naturally cautious about jumping in head first. What’s the answer here? How should brands plot their strategy for interacting with consumers in the best of circumstances and in the worst of circumstances?

Fear of not getting involved is a flawed argument. Those examples of amplified missteps, and many others, will happen whether brands get involved or not. The brands that are not involved will be on their heels, wondering what to do and how to manage the situation. Those that have been involved are part of an ongoing conversation. Their culture is ready, they have people who are part of the conversation, and they know how to adapt to mistakes.

In fact, consumers are more likely to throw stones at a brand than at people. So make your brand more relational, more open, more people-friendly. Then admit mistakes. There’s more upside to asking for forgiveness than brands think. But the real answer is get your operations in order so you minimise the chance for these mistakes!

There’s a perception out there that anything related to UGC is hard to quantify and difficult to pin an ROI on. Is this really the case? What sort of results are Bazaarvoice’s clients seeing?

We have nearly 40 public case studies of ROI in the areas of conversion, SEO traffic, average order value increase, reduced returns, reduced calls, increased satisfaction, increase time on site, and other tangible measures. And these are just the public case studies! Two of our biggest UK clients, for example, have experienced double-digit increases in conversion, which equates to massive ROI.

Whatever the key success metric, we provide an ROI Playbook and plenty of training to ensure we make business sense of ‘social’ for our clients. This is why we call what we do ‘Social Commerce,’ rather than ‘Social Media.’

More and more brands are exploring the ways that customer feedback can be harnessed internally. Dell, for instance, is using its IdeaStorm community to solicit product ideas. Starbucks is doing the same with What sort of actionable business insights can consumers provide and what do brands need to do to leverage them successfully?

Customer reviews bring actionable insights directly to businesses’ sites, and we’ve seen several examples of clients taking direct action from them. For example, Oriental Trading Company, a US-based direct marketer of value-priced party supplies, sells more than 25,000 products, and they read every customer review. They noticed a trend in their ‘Inflatable Solar System’ product: customers said that it deflated too easily.

An internal team went to work, engaging the manufacturer to improve the product. They then updated product copy and images, and posted a response within the reviews to let future customers know that they had addressed the problem.

Children’s furniture provider Land of Nod took this one step further; when customers commented about issues with a laundry basket, they fixed the problem and then sent each customer a replacement basket at no charge. Reviews bring insights right to the company, and all the company has to do is listen, react, and inform customers of the changes they made based on that feedback.

There are obviously a lot of ways that businesses can harness the voices of their customers. What are some of the more innovative initiatives you’ve seen recently?

UK brands have been particularly innovative in their use of UGC. For example, sporting goods purveyor Halfords quickly began adding customer review snippets to its printed catalogues, taking the online voice of the customer to the printed page. They also implemented Ask & Answer, enabling its customers to ask and answer questions about products right on the site.  They saw increases in average order value for those products with questions and answers.

Argos is another innovator; they ran a post-holiday campaign to gather reviews from those who had shopped online over Christmas, and they captured more than 200,000 reviews in just four months. Their catalogue is in 17m households, and it now also includes customer review snippets.

Tell me how Bazaarvoice is approaching the UGC market and some of the ways it is helping its clients navigate the space.

We are focused on UGC applications and uses that drive measurable ROI. That’s at our core. There are plenty of community and UGC plays a brand can make that may seem exciting and fun, but make a minimal impact to the business. We help clients structure useful UGC on the site, help them find influencers, drive contribution, and leverage the content, data and influencers in ways that drive measureable results.

We do this through a flexible and easy hosted implementation with SEO optimisation, social commerce marketing best practices shared through dedicated community managers for each account, flexible analytics and reports, and open API / data to integrate with partners.

If you had to pick three areas you think brands should focus on when it comes to incorporating UGC into their businesses, what would they be?

Get it on their web site in their product path. Leverage the analytics, reports and alerts to bring ‘customer oxygen’ into their business. And start experimenting using the data and content in cross-functional marketing initiatives (email, catalogue, and advertising).