Give Your Customers a Place to Talk...Or Someone Else Will
Several months ago my two cats reminded me of the ascension of consumer as marketer. My wife and I "decided" that I would take over litter box duty, and like any good geek I went online immediately to find a technology solution to this daunting chore. An array of automated litter boxes greeted me, with golden promises of ease, convenience, and reliability. The manufacturers' and retailers' marketing messages were honed to perfection, and like most consumers, I didn't believe a word they said.
Then I found www.litterbox-central.com, and within five minutes it became the most helpful site I visited last year. It's simple: real people talking about their actual experiences with various automated litter boxes. Thanks to the reviews of strangers, I quickly found the right product for me and made a purchase (it's the Litter-Robot, if you're curious).
My story isn't unique. People are increasingly relying on each other for one simple reason: They don't trust marketing and advertising. Yankelovich reported that 76 percent of American consumers believe that companies don't tell the truth in advertising. An overwhelming clutter of too-good-to-be-true messages is numbing our target audience. And this skepticism is getting worse rapidly: Yankelovich also cited that 60 percent of surveyed consumers have a much more negative opinion of marketing and advertising than a few years ago. We've reached a crisis of trust that's not going to go away.
The good news, of course, is that consumers' trust of each other is rising as rapidly as their trust of traditional marketing is falling. Neilsen reports that 78 percent of customers say that consumer recommendations are the most credible form of advertising, with 83 percent agreeing that online evaluations and reviews influence their purchasing decisions. Consumers aren't satisfied with only professional reviews either. MarketingSherpa reports that 84 percent trust consumer reviews more than critics' reviews.
Successful marketers are already transforming their approach by finding the best ways to empower consumers to market on their behalf. Among the many emerging social media tools, good old ratings and reviews have the best track record. Forrester reports that 81 percent of North American Web buyers use online reviews on retail sites. Although ratings and reviews are most valued for durable goods, consumers crave reviews in other categories as well, such as travel, music, and food.
Although most examples of ratings and reviews occur in the B2C space, they're catching on in B2B as well. After all, every B2B customer is a B2C consumer too, and they want the benefit of reviews in their professional world as well.
Most marketers initially expect ratings and reviews to primarily impact the customer experience and loyalty metrics, but they soon also see benefits for the bottom line. In one study from E-consultancy and Bazaarvoice, 56 percent of online retailers reported improved conversion rates after adding ratings and reviews, and 42 percent saw higher average order values.
The impact goes beyond the sale. Sites with ratings and reviews often report increased traffic, higher customer satisfaction, and a higher propensity to recommend the site to others. In addition, there are SEO benefits, because user-generated content tends to get prioritized by search engines. Finally, ratings and reviews can result in customer support cost savings, since customers are helping each other with common questions.
Ratings and reviews provide results beyond the site as well. When Petco started using them within email marketing, Bazaarvoice reported that Petco saw a 500 percent increase in click-throughs to the site. Studies also show that online ratings and reviews impact physical store sales.
I know what you're thinking: All of this sounds good, but what about negative reviews? Don't people tend to write reviews only when they're mad or disappointed? Actually no. as reported in Groundswell, multiple studies show that 80 percent of all reviews are positive.
Another concern: Won't negative reviews scare people away? Actually, they have the opposite effect. A few negative reviews make the site (and products) more credible; after all, who would trust a site containing only five-star ratings? A few negative reviews also increase customers' comfort level in purchasing because any potential weaknesses are now known. Companies such as Burpee are finding that negative reviews can actually increase conversion. REI and others are using negative reviews to engage customers in authentic conversations that everyone can see. But perhaps even more important, they can lead to product improvements. When grocery chain Loblaws read customers' reviews that complained about the lack of eggplant in its Greek moussake, it doubled the amount and saw the ratings and sales climb. Negative reviews become an easy way to identify and fix product weaknesses, which will ultimately lead to more sales.
Ratings and reviews have become a critical component in the online experience, and there's no better evidence of this than a few recent controversies. One of Belkin's sales reps was recently caught paying people to write fake positive reviews. Some abuse is inevitable with successful marketing tools, though thankfully real reviews typically overwhelm any fake reviews. The more interesting case to watch involves Yelp. A chiropractor has sued someone who posted a negative review to the site. Regardless of how this case is settled, the genie is never going back in the bottle when it comes to ratings and reviews. Nothing will stop customers from talking about products and services. If you don't give them a place to talk, someone else will.