Today we announced that the U.S. Patent & Trademark Office just issued a key patent to PowerReviews related to our tag-based review technology – specifically, the ability to present at-a-glance review summaries that make reviews more informative and easier to use. This is the first of seven patents we have filed around next-generation product reviews.

We believe that these innovations have enabled three major advances in social commerce:

• More informative, easier-to-use product reviews
• Social recommendations, based on a person’s lifestyle and intended uses
• Structured analytics, driving more actionable product and marketing insights

We look forward to bringing you further innovation that drives confidence and engagement for your customers and greater sales and customer loyalty for you.

For more information on our patent and the full press release, click here.

We’re both proud and honored to be able to share this news with you and look forward to bringing you further innovation in the years to come.

A New York surprise.  I’m in New York visiting PowerReviews clients and partners.  A great trip on its own.  It also happens to be the wrap-up of the World Series, and I find myself in Time Square, a half block from Virgil’s BBQ where I had just eaten (a whole other story).  To my surprise, I find a long line of people (naturally) waiting to sign a 50 foot “graffiti” wall and have their picture taken in front of it.  Besides a huge World Series emblem, there’s a State Farm logo on it… which explained most of what was happening.  Being a big Yankees fan, and an even bigger Social Media marketing fan, I promptly jumped in line (or as New Yorkers call it “on line”).  As I was waiting for my turn “at bat”, I mentally listed the marketing levers that State Farm might be using… a photo to share with friends, an easy posting to my Facebook home page, a posting to State Farm’s fan page, talking about my experiences as a State Farm customer (if I was one), or my frustrations with my existing insurance provider. 

Reaching the front of the line, the social coordinator handed me a red card with some numbers on it to retrieve the picture online, pointed me to the wall and booted me over to the wall for my NY photo opp. 

I actually did strike an “at bat” pose (surprising the crowd for some reason), then picked up a World Series/State Farm towel, and went about my way.  A fun, and definitely engaging experience.  I thought about State Farm for the first time in years, appreciated all the time and money they spent to do something nice for people, and enjoyed connecting with the people in line and the promotion coordinators.

When I went to retrieve my photo, the experience wasn’t quite as rewarding.  The questions they asked me were fine – good research for State Farm and it made me feel “involved” with State Farm (they asked for my opinion).

The one big flaw in the experience for me – the consumer – was that the picture I retrieved was of the woman just ahead of me in line (and she wasn’t striking an “at bat” pose).  And I’m not a woman.  Details.

But after an email to Eshots.com, the company that hosted the pictures, mentioning the pose (and that I’m writing a blog about it), they quickly found the right photo and sent it to me.

Altogether, it was a good experience, and it caused me (and probably hundreds more) to blog and tweet about it.  They didn’t ask for my experiences, or ask for my permission to post on their fan page, but they did get me involved.  They even asked me  if I’d like to speak with an agent and get an insurance quote. I don’t know what the cost of the program was, but I do think it’s a clever use of social media and social commerce.  One which I’m sure will get better with all the social feedback they’re probably getting right now.

Congratulations, State Farm.  And congratulations YANKEES!!

With online retailers gearing up for the holidays, there is no shortage of tips and tactics out there to tap into social to supercharge sales.  We decided to poke around the social web and take a look at how a couple of big name retailers (who also happen to be our clients) are doing interesting things to power social forward this holiday season.

Electronics retailer RadioShack® uses one of several hero banners on their homepage to promote a particular product that will help shoppers connect via social networks:

Notice the prominent use of the Facebook, Twitter, and MySpace icons, as well as the headline “The SHACK leaves no social network behind…” This caught our attention as a great way to use the momentum of social to stand out.  And while the retailer could have picked any product to spotlight, RadioShack® chose one that explicitly serves the function of connecting its users to the “social universe” of Facebook, Twitter, and MySpace.  Extending the social circle across multiple touchpoints, RadioShack retail partner T-Mobile airs a TV commercial plugging this product as the “first phone with social skills.”  RadioShack® gets props for effective multi-channel marketing the social way.

We also took a look at how REI is taking social cues seriously this holiday season. Much like the famed Threadless  folks, REI gives crowdsourcing an edge by opening up a contest calling for artwork submissions  to be featured on an Arbor snowboard. The invitation comes complete with a catchy, user-centric tagline: “Ready to Ride Your Art?”  Winners also have a chance to win a $500 or $1000 gift card. Talk about viral potential – the participatory nature of this contest will likely fuel word of mouth and share of mind, engage shoppers and artists, and get them involved with the brand.  It’s also worth mentioning that this type of promotion is likely to drive repeat purchase.  We tip our beanies to REI for this smart use of social to build community around a seasonal theme and top-rated product. 

If you lean in a bit further and look a little more closely, you’ve known this thing called social media for years.  It’s ripped right out of those social studies textbooks that weighted many a sixth-graders’ backpacks, in their curricular insistence on opening young minds to the strands that define culture.  It’s really not any different from moms sharing recipes and dropping off pies at the neighbor’s house to welcome a newborn.  Sharing “space” and exchanging ideas, knowledge and information. This natural human behavior to reach out is the fabric that binds neighborhoods and communities, cities and countries.

What is different about social media, however, is that the “media” part of it has made all of these social activities scalable. Social media can happen at home and within your community, but you can engage in it whenever and among whomever you want, across continents and time zones.

And when you bring business into the equation, the dynamic shifts.  Personal versus business goals shape the way each of us approaches this behemoth that binds.  Social media has opened up creative possibilities for social commerce: customers are active participants of the marketing and development of products, and businesses are actively cultivating relationships with their customers.

Businesses have come to find that peer-to-peer trust is the engine that drives social commerce—and this “engine” is fueled by community.  But how do businesses and consumers sift through the vastness of the information out there to get to what they really want? With the possibility of scalability comes a more critical question:  how can customer communities form around seemingly endless spaces?

Invoking Seth Godin’s mention of Dunbar’s Number might help here. Dunbar’s number references the number of 150 as the maximum capacity of one’s ability to sustain engaged relationships (people can’t have more than 150 friends and still maintain meaningful connections).  Where the idea of separating noise from truth in online conversations persists, social commerce solutions address the challenges that have surfaced as a result of the infinite ways to connect and the insistence of online participants on the web to gain true value from this vastness.  Social commerce solutions hone in on and make sense of what businesses should focus on based on the needs of their customer communities.

The scalability that social media affords is a phenomenal opportunity for businesses – but we have now entered the phase of social commerce in which we are learning that maximum growth potential can only be tapped into if businesses sharpen their focus on how to effectively harness scalability and find ways to create those meaningful connections, and, ultimately, build robust customer communities. That’s where our solutions come in. You could say we’re majoring in Social Studies. We’ll be the first to tell you that it’s not easy, but with each client success story we help build, we’re learning more to provide you with better solutions that help you stay ahead of the curve.

I’m pleased to announce that Pehr Luedtke has joined PowerReviews as CEO. This move is the next step in PowerReviews’ expansion into broad-based Social Commerce Solutions. Pehr brings a unique combination of marketing and merchandising experience at branded retailer Levi Strauss and consumer online marketing and operations experience running Epinions, the largest user-generated product reviews site on the Internet.

I will remain active in the day to day operations at PowerReviews, focusing on strategic alliances and strategy. With Pehr’s leadership and the strength of the PowerReviews team, I’ve never been more excited about the future and our ability to deliver innovative Social Commerce Solutions that truly engage, connect, and sell.

The Foundation… What’s in a Name?

When Robert, Jim, Gautam and I first envisioned PowerReviews four years ago, we wanted to find a successful model to describe what we wanted to build. Unfortunately our model is quite unique and we were hard-pressed to find something equivalent. So, instead, we looked for attributes of great companies that we wanted to emulate. The resulting codename was….(drumroll):

In a nutshell, KaGooForce is a mashup of 3 companies:

1. Kana: CRM/Email management for retailers. They pioneered the idea of harnessing customer communications (inbound support emails) to drive efficiencies across all aspect of the business. PowerReviews would do this with Reviews and Q&A.
2. Google: Uncompromising focus on innovation, simplicity and delivered value to its customers. PowerReviews delivers great technology and service, not marketing spin or hard sell-tactics.
3. SalesForce: Salesforce delivers a product with a self-service SaaS model vs. the traditional Enterprise sale with hefty Professional Services fees…and ate Siebel’s lunch despite being outspent and outnumbered. PowerReviews products are built with self-service at its core so that our clients can easily start with us and grow as they receive value.

We all knew that the name was pretty goofy (believe it or not, this was in our actual Series A investor pitch!), so we stuck with the more mundane “PowerReviews”. However, the characteristics that KaGooForce represents have truly defined our path, in terms of products, culture, and business model.

In fact, we recently surveyed our clients, and here’s a snapshot of what our clients are saying about us:

I’m truly proud that words such as “partners”, “innovative”, “service”, “enjoy”, “relationship” are used to describe PowerReviews. And I’m also excited that, with the thoughtful feedback from our 850+ clients, we are now on the forefront of this transformational “social commerce” trend.

How far we’ve come

Because PowerReviews is in the “customer feedback” business, it makes sense that we take a lot of time to listen to our customers. There are two specific things that I’ve heard very clearly from our customers recently: “innovate faster… the world is changing quickly and we need PowerReviews to help guide the way”; and “build a great business, we love what you do and want to make sure that you are a partner for the long-term.”

And so, we’ve been working really hard on both of these demands. Here are some of the results of our efforts so far:

• We have introduced 3 major new products in the past year: AnswerBox, In-line SEO and BrandConnect (as well as lots of enhancements to our core reviews solution)
• We struck a major licensing deal with Shopzilla in the EU
• Buzzillions continues to grow its share and awareness with consumers (~7M reviews, 2.5M visits/month!)
• We have added over 50 enterprise clients in 2009, including Orbitz, Advance Auto Parts, Warner Brothers, GNC and Jelly Belly
• We launched PowerReviews Express to serve small-to-mid-sized retailers…with over a dozen partnerships such as eBay Prostores, Shopify, Infopia, Zoovy, BrandLabs, and Shopatron

It’s truly been a banner year for PowerReviews on all levels. The (not so) amazing thing is that all of these successes were driven by our customers, who freely and thoughtfully gave their ideas to us. Thank you!

The Wall Street Journal featured a story yesterday that credited PowerReviews with helping ecommerce businesses boost customer review volume and build trust among online shoppers. The results: shoppers feel more comfortable buying online, while merchants are better able to identify problems with their products or services.

The article highlighted the success stories of PowerReviews clients drugstore.com and Diapers.com.

Drugstore.com’s 300% lift in review volume after implementing our software and launching a follow-up email campaign (a PowerReviews best practice) not only helped to lend credibility to their products, but garnered a legion of verified buyers, adding even more authenticity to the reviews. Layering on the lasting benefits of the follow-up email, drugstore.com CMO David Lonczak said that this practice helps customers receiving these requests in their inbox “feel important” and “increased our brand’s connection [to drugstore.com customers].”

Our AnswerBox solution also received an honorable mention–with a focus on its capability to help merchants “reap the benefits of input from consumers before a sale is made, by posting questions from people thinking about buying a product and the answers, including comments from other consumers.”

Bazaarvoice’s capability to link customer reviews to users’ Facebook profiles was also mentioned, reinforcing the viral nature of peer-level feedback online.  (Read about our own Facebook publishing feature – Social Megaphone.)

When consulting online reviews, a shopper’s level of comfort largely depends on feeling that sense of connection to the person making a review. Director of E-commerce Solutions at Diapers.com Josh Himwich remarks, “the most important recommender is going to be people who are in a very similar situation to yourself.” However, not all reviews solutions provide this crucial information.

The article pointed to Diapers.com’s use of our Affinity Reviews™ as a feature that sets PowerReviews apart from others in the industry. This PowerTags™ technology, unique to PowerReviews, captures structured customer feedback to help shoppers “distinguish one reviewer from another” (’first-time parent’ or ‘grandparent’), and is critical to helping to guide their purchases online.

The common denominator here: social commerce solutions that drive measurable results for businesses – through more sales and deeper customer relationships.

TwelpForce. People power. Consumer-driven innovation. The “conversation”. Gen Buy. Lobster tails. These are just a few of the core concepts (and choice food items) that gave conference attendees something to talk about at this year’s Shop.org Annual Summit.

Cheers to all who stopped by our booth. Visitors were certainly not afraid to let their “Social” hang out. If you were asked the question “What’s Your Social?”, and got a chance to put a sharpie to a slick-looking button to write down your response, then you kindly shared interesting and unique ways in which you connect with your friends and customers through social media.

What’s Your Social? not only compelled visitors by getting them to think about the fundamental shift in the way we now communicate in our personal relationships, but it also got them to explore creative and new ways in which to build deeper relationships with their customers. It was not an uncommon sight to see button wearers turn and squint to read each others’ buttons in the booth to ask, “Hey, so what’s your Social?” Among some of the interesting responses (and there were many), a personal favorite was “Salsa Dancing and Fine Wine.” View more of our favorites here:

For us, the Shop.Org Annual Summit is about connecting with existing clients and friends, and building new relationships. There is nothing more valuable than getting a chance to see everyone face to face, and putting that smile to the email, or that handshake to the voice on the phone–then continuing to build our relationships through the power of community networks and Social.

Here’s to incisive, eye-opening keynote presentations and panel discussions, “Social” button-wearers, popcorn noshers, and free morning lattes courtesy of Venda to shake off those late Vegas nights (we hear ya).

Most importantly, a special thanks to all the folks who attended this year’s event. Hope to see you next year!

We are very pleased to be recognized by Internet Retailer as the Solution Leader in the Customer Reviews and Forums category – click here for the full article (screen shot from their email announcement below).

We founded PowerReviews four years ago based on a revolutionary idea that not only are reviews useful to consumers at the end of the shopping process (validating their purchase decision), reviews done a certain way – using structured (tag-based) content – can fuel a personalization and social commerce revolution.  For example, using our 3rd Generation Tag-based review technology, Brands like Jelly Belly and retailers like REI are able to present meaningful at-a-glance review summaries to help shoppers in the middle of the shopping process quickly compare products.

Review Snapshot® – REI HalfDome Tent

In addition, using our 3G tag-based review engine, PowerReviews empowers customers of retailers like Dicks Sporting Goods and Kiddicare at the start of the shopping process with the ability to narrow product selection based on Social attributes like Uses and Pros.  For instance, finding baby strollers recommended for Newborns when you Travel a lot.

Social Navigation – Kiddicare Strollers

We believe that tag-based reviews, and social media in general, have empowered consumers to make significantly more confident purchased decision with social advice at every step in the buying process.  Buying online is still riskier than buying in a store.  But with social recommendations early in the process and social feedback late in the process, consumers are making far fewer purchase mistakes when taking that risk.

I’d like to thank our customers who are driving this revolution so that their customers (and them as a result) fully reap these sizeable benefits!

Full full listing of Internet Retailer Top 500 Awards click here.

In the last year, my work has focused primarily around leveraging reviews and other user generated content before and after the validation stage of shopping – to attract new shoppers to their site, help shoppers sort through and find the right product for them and get more engaged with the Brand after they leave.  I wanted to share with you some of the key lessons I’ve learned in this process that will help you get the greatest sales uplift value from customer reviews.

1.  Maximize the number of credible reviews on your site

It’s no secret that the most important step to getting full leverage out of reviews is sending an automated email to invite customers back to write a review after a purchase – commonly called a post-transaction follow-up email.  This is the proven method to generate the most reviews on your site from a very credible source – your known customers!  In fact, one client recently increased reviews by 26 times by implementing the follow-up email.  Our system marks these reviews with a “Verified Buyer” badge, which creates trust among your customers.

We recommend that you send the follow-up email to all past purchasers from the previous 6 months prior to launching reviews on your product pages.  Within the first month, you should have 20% of your total SKUs have at least 1 review, with 100% review coverage for your top sellers. Further, as the Netshops Case Study shows, it’s the number of reviews per product that drives sales uplift, with 4-7 reviews per product being enough for 75% of shoppers to “have sufficient confidence to judge the product” (etailing group study of 1200 typical internet shoppers).

Did you know the follow-up email also ensures a more balanced and improved overall product rating?  Because the email captures reviews from a wider cross-section of customers, our customers have experienced a 15% increase in the average product rating across their site once they implemented the follow-up email!  If you need help, let us know.  We’ve created a tool to help you send the follow-up email.

2.  Make a great first impression

It’s one thing to collect customer reviews, but if you don’t display the reviews in a user friendly way, with an informative and easy-to-absorb review summary, you’re not getting the greatest sales impact from these reviews.  That’s why we created the next generation of our review summary, called Review Snapshot 2.0.  Initial tests showed an 18.3% reduction in product page bounce rate and a 16.7% increase in product page conversion.  Check out the Review Snapshot at Jelly Belly.

3.  Maximize SEO Benefit

Since the inception of our review solution, we’ve provided customers the ability to increase natural search traffic from customer review content via our SEO Mini-Site.  This solution leverages a set of SEO-optimized review landing pages, which drive traffic through the landing page to the product page.  Late last year, we launched our next generation SEO tool called – In-Line SEO(tm), which enables customer review content to be indexed directly on the product page itself.  Early customer review adopters, such as eBags, Newegg and Zappos, created home-grown review solutions to achieve the SEO benefit of reviews directly on the product page.  Now everyone else can benefit from this approach without having to manage the review display themselves (so you can easily adopt all the review enhancements in the future).  Check out Robert Chea’s blog post last week for more details.

4.  Take review content everywhere it can drive more sales

After you’ve spent the effort collecting credible, high quality reviews, make sure you leverage those reviews throughout your site and in your email marketing efforts.  In our case, the review content is “tag-based”, which means you can take it entirely new places in social merchandising and social marketing.

• On category pages and anywhere you list products, include the star ratings snippet.  Thirty days after adding ratings on the category page, Diapers.com experienced a 15% increase in product page views and a 14% increase in conversion.

• Highlight Top-Rated products on your site.  Check out REI’s Top-Rated products section on REI.com.  Utilizing our tags, you can also take it one step further by creating more personalized Top-Rated pages.  See Top-Rated women’s comfortable shoes for travel on OnlineShoes.com.

• Embrace Social Navigation to its fullest by adding ratings and review tags to your site navigation so people can narrow by “use” or “pro” or “lifestyle” (about me).  Check out Social Navigation implementations at sites such as OnlineShoes.com and Dick’s Sporting Goods.  For a very different Social Navigation interface, using tag clouds, check out Kiddicare.com.

• Add ratings and review tags to your email marketing campaigns.  By adding ratings to their email, Mountain Gear increased click-through by 8%, conversion by 17% and Average Order Value by 85%.  Impressive results!

5.  Take your online reviews offline

With the retail market still dominated by offline sales, it makes good business sense to bring ratings and reviews to your offline customers.  PowerReviews allows you to provide customer reviews in store with mobile applications that fully leverage the powerful Review Snapshot feature – high impact in a small form factor.  We also can suggest ways to maximize the display of customer reviews in store by leveraging both the ratings and the tags in store signage.

I encourage you to fully harness the amazing content your customers are creating for you every day.  These are just some of the ways you can do that, with clear wins for you and your customers.  As always, if you have any questions about the information shared, please contact your Account Manager.

To work around the “invisibility” problem, both companies created special review landing pages (or “review mini-sites”) that search engines could index, bringing a sizeable stream of new search traffic to the mini-site.  But not to the product page, and that’s the rub.  Unlike any other page on the website, the product page is the best equipped page to convince visitors to buy.  And it’s the place retailers and brands have chosen as the place to focus their SEO efforts.

Our new In-Line SEO solution brings together the merchandising and marketing power of customer reviews onto the Product Page, driving search traffic to the place it can generate the greatest sales.  And doing so without sacrificing the productivity benefits of working with an outside service provider.

33% Increase in Sales from Natural Search

I could go on and on about why it’s important to have search-friendly review content on your product page, but the results speak for themselves.  One of our first clients to implement In-Line SEO is Diapers.com, and they experienced some impressive results.

Within two weeks of implementing it, natural search traffic on Diapers.com increased by 49%.  And because all of the incremental traffic landed on the product page, search-related sales increased by 33%. A key driver of the increased sales was a 59% rise in the number of keywords driving traffic to the site. (Diapers.com did not have an SEO solution for reviews prior to the launch of In-Line SEO).

You can find more details in our In-Line SEO™ Case Study, but seriously, “WOW!”

Why not an API or XML?

You many have heard from Bazaarvoice that they offer an API to enable SEO on the product page – providing a coding interface to include customer reviews as HTML content on the product page.  If you have explored this route, you probably discovered it would change the fundamental working relationship you have with your service provider.  We know, because we have long provided an XML interface to our clients as a stop-gap SEO solution, and only 3 clients out of 300+ chose it.  The vast majority of our customers did not because 1) it required them to build their own front-end display, and 2) it required new engineering development every time we released a new feature.  And isn’t easy integration and no maintenance a key point of outsourcing?

Until now, retailers had only two choices for product page SEO — (1) “build-it-yourself” and get the full SEO benefits on the product page, or (2) outsource it to a SaaS provider and live with review landing pages.  In-Line SEO™ gives you the benefits of both.

So welcome to the new world of outsourced customer reviews, where you can have your cake and eat it too!