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The Power of Customer Reviews

Tuesday, December 15, 2009

The e-tailing group and Power Reviews did an interesting study that was published in September—something else that has been sitting around on my desktop. An article in Ad Age (subscription may be required) on small marketers who were successfully using reviews to get their products noticed motivated me to get the report out and look at it again.

Here’s some of the data from the 117 retailers interviewed. They respondents were distributed over large and small firms and their perceptions are interesting. Here are some of the primary ones:

Retailers are most concerned that people will trash their products; don’t have much faith in their own business, do they? It’s interesting though that, when you combine Rank 1 and Rank 2, just about as many are concerned that customers will leave their site for a more socially engaging one. Even more are concerned that they are using outmoded marketing and merchandising techniques. Hear, hear!

Of course retailers want to sell things! But, according to these data, they also want to engage their customers, drive brand loyalty, and stimulate word of mouth. Those all make sense. They also point out that social media isn’t an immediate solution to any marketing issue. It is an investment of time and energy that pays off over time.

Which of the social media efforts are most effective, in increasing sales? Reviews; nothing else comes close. All retailers should ask themselves what they are doing to provide an opportunity for customers to review their products and experiences. What are they doing to encourage customers to provide those reviews?

Which of the social media efforts are most effective in mobilizing advocates and spreading the word about their brand? Facebook! Reviews are at the bottom of the list and Twitter is next to the bottom. People do say that reviews influence their purchases; is that not spreading the word? I hope these retailers were paying attention to this year’s Black Friday/Cyber Monday Twitter efforts. The good news is that Twitter can have an immediate impact on sales. The bad news is that it takes time and effort to build a base of Twitter followers that permits impactful marketing. Bear in mind that it takes time and effort to build a following of Facebook friends also!

The Ad Age article gives examples of issues. Let me briefly tell the story:

• Shane Faerber is an individual developer who wrote an app, Mall Maps, for the competitive iPhone applications space (over 80,000 of them the last time I looked).
• When the app was launched he wrote the first review—with complete transparency. He said he was the developer, provided a video and invited feedback. He even put his email address in the app itself.
• He reached out to professional reviewers and media outlets, getting some positive notice and a ranking of 26 (out of about 18,000) in his category.
• Apple paid attention and on Tuesday before Black Friday named the Mall Maps a must-have. By Wednesday it had moved up to number 1 in its category. It was originally priced at $2.99. Today it’s on sale for $1.99 but I don’t see a current downloads stat.

Great as the success of the app is, that’s not what I found most impressive. Here’s the quote from Ad Age:

along the way, Mr. Faerber's hand turned a handful of dissatisfied customers into positive endorsers. One customer, whose initial review started with the opener: "SO FAR STINKS!" eventually wrote that he was "impressed with your customer service" and wished Mr. Faerber "the best of luck" after a series of e-mail exchanges with the developer.

What works?
• Reaching out to potential customers.
• Reaching out to the media, especially the online media for an online product.
• LISTENING to your customers. Even more, ENCOURAGING THEIR FEEDBACK!
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