In the infinite space of the blogosphere (as of August 2009, there are over 200,000,000 blogs in existence, with 34% containing opinions about products or brands), who’s playing dirty and who can you trust?

With the announcement of the FTC regulations earlier this month, and the thought-provoking debate that has ensued, articles are surfacing, pointing to the inherent corruption that has been breeding within the blogosphere. CBS News writers Jean-Louis Gassée and Frederic Filloux write: “readers will be good at sorting out the good from the bad. Some blogs – or review systems – will fall into the fishy (or corrupt) category while others will emerge as trusted brands.”

We agree: consumers are smart. And powerful. If they want the truth, not only will they be able to “handle it”, but they will seek it out.

So the question remains, especially when it comes to product reviews, who can you trust?

If you know about our Verified Buyers, Affinity Reviews™, Staff Expert Badges, and our one-review-per-person, per-product rule, then you know that authenticity and credibility drive the technological design process of each of our social commerce solutions.

Our three-pronged approach ensures that your shoppers can trust customer reviews by PowerReviews – 100% of the time.

Verified Buyers
Credible verified buyer badges build trust among shoppers in your customer community. A Verified Buyer is an individual who has purchased the reviewed product through us and submitted their review through a specific process that tracks purchase history. This designation (above, and circled below) is intended to clearly identify those members of our community who are submitting reviews of products that they own.

See an example here:

Affinity Reviews™
Help shoppers easily find reviews from people with similar lifestyles and experience levels. Why is this important? According to the the Edelman Trust Barometer , consumers are likely to trust persons like themselves when it comes to making purchase decisions. Given the highly segmented interests and lifestyles of consumers in most product categories, our Affinity Reviews™ provides a more personalized approach designed to match shoppers with the best product for their needs.

Finally,  you might recall our post earlier this year on our one-review-per-person, per-product rule. We have a team dedicated to identifying, culling, and removing any suspicious reviews, which can include  duplicate reviews or an unusually high volume of reviews submitted by a singular user on the same product. Vigilantly tracking this unusual behavior helps raise red flags that might warrant deeper investigation.

These are just some of the ways PowerReviews helps you empower your customer community with real, credible information that they (and you) can trust.

If you’ve been following our tweets and the latest social buzz, then you already know about the 2009 Community and Social Media Research Study that we conducted with the e-tailing group. The study revealed that companies rank customer engagement as the number one goal in using community and social media tools. Taking this a step further, the Altimeter Group’s landmark study of the world’s top 100 brands (among them: Starbucks, Coca-Cola, McDonald’s, Mercedes-Benz) uncovered a direct correlation in companies’ deep engagement in social media and top financial performance. Companies who earned the designation of “social maven” were remarkably proficient in their efforts to engage with their customers using social media tools. On average, social mavens experienced 18% revenue growth over the last 12 months alone. Conversely, their socially uninvolved counterparts experienced a 6% decline in revenue over the same period. In short, “Money talks and it’s declaring that it pays to engage meaningfully in social media.”(Source: Altimeter Group).

What does this mean for your business? Engagement is not only a key metric for companies today; it is absolutely vital for business growth and fundamental to understanding your customers.  Read on to find out how one retailer transformed a challenge into an opportunity to increase customer engagement.

Abe’s of Maine Uses AnswerBox to Increase Customer Engagement and Gain A New Traffic Channel

If your customers have product-related questions and can’t find the right answers on your site, it makes sense that they’d surf elsewhere until they find what they need. How do you prevent these potential customers from leaving your site? How do you find ways to truly engage visitors, increase conversion and build word-of-mouth?

Well-known camera and digital electronics retailer Abe’s of Maine was faced with this challenge. Visitors to their site had tons of questions, and this meant countless resources were spent addressing the same types of inquiries for multiple customers on the same products.  Worse, customers who didn’t find answers to their questions right on the product page were lost to other sites or online forums. Abe’s of Maine wanted to find a more efficient way to keep their customers better informed, keep customers on their site, and increase conversions.  Net-net, they wanted to find an effective way to better engage their customers.

Abe’s of Maine turned to AnswerBox, our solution that allows shoppers to ask product-specific questions and receive answers from customers and designated staff experts. Customers who ask a question are given the option to leave their e-mail address to be notified when their question receives an answer. The retailer was able to quickly and seamlessly plug the solution into their web site in a matter of days. Unlike the traditional one-to-one support channels (such as e-mail and phone) that Abe’s of Maine had previously relied on, AnswerBox captures conversations, answers, and insights by displaying them directly on the product detail page for all current and future customers to see.                                                                      

The Results

Within seven months, the implementation of AnswerBox demonstrated significant gains in customer involvement on the retailer’s website. During this timeframe, more than 5,200 questions were posted to the site, with 97 percent receiving an answer. Of the people who requested email notification, more than seven percent returned to Abe’s of Maine to make a purchase via the email link. Further, the return rate for these purchases was 40 percent lower than Abe’s average.  Through all of this, AnswerBox provides Abe’s of Maine with a new traffic channel with a customer acquisition cost of less than $24, a strong number in comparison to their $30-$40 CPAs from many other channels, including comparison shopping engines. 

While these business metrics are noteworthy, particularly amidst a challenged economy, Abe’s of Maine was equally excited about the opportunity this solution provided to build its brand long-term.  AnswerBox helped the retailer increase engagement by:

• Keeping visitors on their site and  eliminating the need for shoppers to seek answers elsewhere
• Initiating dialogue with the 73 percent of customers who provided email addresses when making inquiries via AnswerBox
• Building trust and credibility in the highly competitive world of online digital electronics  by offering user perspectives and real-world scenarios
• Using customer feedback to improve site usability

Listening and responding to its customers’ questions and concerns is continually helping Abe’s of Maine discover more about what their customers want, allowing the company to become better informed and more relevant. The retailer’s success story clearly demonstrates that going social means more than diving in and waiting to see what happens. If money talks through social, then it is earned by allowing your customer community a voice to help tell the story of your brand. It is now critical for companies to engage in the conversation, and Abe’s of Maine did just that, by addressing specific questions and providing answers, thereby building on interactions and deepening relationships with their customer community.

To learn more about how Abe’s of Maine achieved customer engagement success, download the full case study here.

Insights from our 2009 Community and Social Media Study

According to a well re-tweeted presentation by Social Evangelist Marta Z. Kagan, most of you reading this have some sort of involvement in social media. Kagan points us to the fact that three-fourths of Americans use social technology (Forrester, The Growth of Social Technology Adoption, 2008). And, among the legions of users of social media technologies, 93% believe companies should have a presence in social media (Cone, Inc. Business in Social Media Study, September 2008). So what social media platforms are your customers using?  And how are you going to leverage the involvement and insights of your customer communities in order to stay relevant to your customers and drive real business value?

PowerReviews commissioned a social media study with the e-tailing group to answer these vital questions and find out how far social media adoption has come. And, of equal importance, to uncover the problems businesses are trying to solve with the use of social media tools. The study surveyed 117 companies, including multi-channel retailers (44%), brands/manufacturers (26%), pure-play retailers (12%), catalogers (9%), and suppliers/agencies (9%).

Adoption of Social Media Tools. The How and the Why.

How are merchants and brands engaging in social media? According to the survey, social media tools are already part of the customer experience and marketing mix for most merchants, where 5 out of 10 tools have a  50%+ usage penetration, with top contenders being Facebook Fan Page (86%), Twitter Publishing (65%), Customer Reviews (55%), Blogs (55%), and Viral Videos (50%).

When asked what tools brands and merchants plan to use within the next twelve months, the responses were significant: the highest growth in social media adoption by Merchants & Brands is expected in Facebook Connect (31%), Social Listening tools (31%) and Customer Reviews (26%).

After uncovering what social media platforms are most commonly employed, this still begs the question: what are brands’ and merchants’ primary goals in using social media?

The study reveals that apart from the objective of increasing sales, brands’ and merchants’ responses point to the following social media trinity at the top of the list: greater customer engagement, mobilizing advocates to drive “word of mouth”, and increasing brand loyalty, in priority order.

The study’s findings reveal that Kagan could be onto something. As are the hundreds of thousands of others who have felt, witnessed, or realized that ‘social media’ is fundamentally changing the way we communicate and sell, especially in ecommerce.  But what problems are merchants and brands trying to address?

What’s The Problem Anyway? Brand and Merchant Pain Points Concerning Social Media.

As stated above, we set out not only to identify the patterns of adoption with social media tools today, but also to find out what problems brands and merchants are trying to solve by using them.  The top three are:

1)      Business risk: “People can trash my products in front of a large audience” (49%)

2)      Career risk: “I am using outdated marketing/merchandising techniques” (34%)

3)      Competitive risk: “Customers might leave my site to find a more socially-engaging site” (26%)

As “pain points” go, these are very significant.  In my experience, the rate of adoption is directly related to the severity of the problem people face.  With the widespread use of social media tools by consumers, marketers and merchandisers are faced with a very different set of rules to succeed.  As a result, this study shows that they are faced with business and competitive risks, as well as career risks, given the degree of change that is occurring.  We interpret these as the primary drivers of such a dramatic movement to assess and actively embrace social media tools they believe will “engage” their shoppers and significantly grow their sales.

Consensus: Reviews Are The #1 Social Media Tool for Driving Both Engagement and Sales

When asked about social media tools that drive the most sales and customer engagement, customer reviews came out on top by a wide margin for both, as 78 percent of those polled list customer reviews as the #1 social media tool for generating sales, and 61 percent list customer reviews #1 in driving customer engagement. Plus, in addition to the 55% of respondents who have already deployed customer reviews, another 26% plan to deploy reviews in the next 12 months, and 13% plan to do so the year after that. This means that 94% of all brands and merchants will have reviews on their sites within 2 years.

Impact on Customer Engagement

Impact on Sales

The Implications: What’s Next

What does all this mean? Of the study’s findings, Lauren Freedman, President of the e-tailing group, remarks, “The integration of community and social networking within e-commerce has reached critical mass and as such is now a benchmark that we will be tracking annually. Customer engagement has become a metric to be reckoned with, where failing to engage consumers via community and social media will have brand and bottom-line implications. All merchants must test and understand how to effectively deploy it for their brands to retain customers, encourage sales, and avoid abandonment to competitors who’ve better embraced its marketing potential.”

Freedman’s comment underlines the core concept that customer engagement will play a critical role in marketing strategy for brands and merchants moving forward. Forrester has proposed that customer engagement be added to the traditional marketing funnel model – on par with the “sale”.  So not only is engagement a key strategy, but a key objective along with sales, as measured by influencers/advocates that will drive another wave of sales through word-of-mouth they generate.  We are a firm believer in this updated view of the marketing model and marketing philosophy, as you will see with two products we just announced at Shop.org – BrandConnect (social listening and analytics) and Social Megaphone (Facebook Connect and Twitter “amplifiers”).  As it happens, these two areas came out to be the top two types of social media tools that brands and merchants plan to deploy within the next 12 months. It’s important to note that we didn’t have the results of the e-tailing group study when we committed to these projects, but in speaking with our customers within the last six months, it became very apparent that these social media tools would be at or close to the top. And because we make it our business to identify your needs and create solutions to address them – it sure feels good getting it right.

To download the PDF of the “Topline Findings” for the 2009 Community and Social Media Study, please click here. (We ask that you leave your contact information before you download; thank you.)

What is Review Accelerator?  It is a simple and easy way for PowerReviews Express clients to send follow-up emails after their customers purchase a product, inviting them back to review.  Review Accelerator is the result of years of optimizing the format, design, and process to maximize the response rate and quality of reviews with hundreds of our Enterprise clients (to achieve response rates as high as 15%).  We take care of all the complexity and implement the best practices for you.

Why is Review Accelerator™ so important?  Quite simply, without a well-implemented follow-up email program, you won’t get enough reviews.  Our research shows that 74% of customers believe that four reviews per product is the minimum needed to make an informed buying decision.  Review Accelerator can help you achieve this milestone 10 times faster (in 1-2 months instead of 1 year).

With the addition of Review Accelerator, we believe PowerReviews Express provides a complete review solution that will exceed your expectations.  You not only get our unique tag based solution that consumers prefer 2-1 over stars and comments, but a program that accelerates your review collection.  It is the fastest and simplest way to reap the benefits of reviews on your site.

A number of our clients and partners have been forwarding these stories to us with notes of disbelief – they are surprised there is still a fear of negative reviews out there despite the numerous reports and findings that stress the importance and value of “negative reviews” (e.g. Forrester’s “Myths and Truths about Customer Reviews” report, Dec. 2008). I set out on a cross-country tour, speaking with several of our clients and hearing their questions and insights about recent events and the state of customer reviews in general. I’d like to share some of those conversations (as well as some internal analysis) with you:

Having collected nearly 5 million customer reviews from more than 350 retailers, we have a pretty clear picture of the distribution of product ratings. We have found that 92% of all reviews are positive (with star ratings of 3 or higher). That leaves only 8% of reviews that are negative (ranking of 2 stars or lower). And since these 8% negative reviews are dispersed among many thousands of products, the negative impact to particular products is quite low. But there are, undoubtedly, products that have consistently negative reviews, and to be able to identify those “less than stellar” products early and confidently enables retailers (and even brands) to enhance their product offering by addressing these concerns in the product (or in the case of the retailer, pulling them from their shelves) so future shoppers don’t have a negative experience as well. More importantly, we know that some negative comments (including “cons”) add credibility to reviews and actually increase the chance of selling that product. It’s all about getting the “complete picture” of a product. Since consumers don’t believe there are “perfect” products, they just want to be informed about the cons (or shortcoming) of a product and decide for themselves whether they can live with them.

In short, if you’ve decided to give your customers the opportunity to communicate with you and other shoppers about your products, it’s important to allow them to voice all of their experiences (whether they be good or bad). Today’s consumers are extremely savvy and can identify fraudulent reviews and unethical business practices with ease – we encourage you to use reviews as an open and transparent communication channel with your customers, not a vehicle with which to dilute credible user insights by adding (or removing) content.

I’m not surprised at all that people are trying to “game the system” and influence product ratings and reviews, and particularly friends of people who work for a manufacturer. It’s something we’ve been worrying about since the company was started, and something we regularly try to find ways to minimize (it can’t be eliminated completely). The “Verified Buyer” feature from PowerReviews is one way, together with the proactive “survey engine” we set up with tens and hundreds of thousands of surveys being sent out every day by retailers to people they know have purchased the product they are reviewing. The biggest benefit this provides is to “drown out” the few reviews that aren’t real, i.e. gamed.

The other mechanism to minimize the effect of fake positive reviews is the voracity of the community itself, and of the individual reviewer. We believe that most people who read reviews are fairly sophisticated, and can sniff out fake reviews (few specifics, no concerns voiced at all, limited comments…). Plus, most review systems have the question “How helpful was this review?” at the bottom of every review, so the readers/shoppers can vote their suspicions. That way, other shoppers can then sort reviews by “most helpful”. In addition, we believe that having “most helpful” as the default sort order is the best way to empower the shopper to make a confident decision, which is how we do it on our product research portal, buzzillions.com.

The part that did surprise me was the outward and open advertisement for positive reviews. if, in fact, it was the Belkin business development person, then it’s one of the less smart moves I’ve heard of in a while. Especially, given the huge and hungry community of “citizen reporters”, together with Goggle alerts, that get the word out so quickly. But I could see people who have a lapse in judgment actually do something like this…once.

My initial instinct was that this was actually a move by a competitor (or personal enemy) who put up an ad like this with that person’s name on it, know it would be found out and distributed widely (like it has been). But if that was the case, Belkin would have immediately disclaimed it.

Bottom line…I think that gaming will become more of a problem, and, unless we continue to advance our abilities to minimize it, it will become worse. Of course, that’s where we come in.

Internet Retailing fake reviews mention: “Keeping the trust in user reviews”

RIS News presents a useful list of “6 Strategies for Winning on Black Friday and Cyber Monday” to engage shoppers and help get the most out of these tough economic times. Faced with the reality of lower profit margins and declines in consumer spending this holiday season, retailers might seriously consider the following recommendations:

1) Use the web to promote Black Friday specials
2) Post coupons on your website
3) List specials so consumers can compare deals
4) Offer lower prices online
5) Relax return policies
6) Post special offers on CyberMonday.com

While these tips are excellent in getting immediate sales during the Black Friday and Cyber Monday rush, there is an essential 7th tip that will pay dividends shortly following the purchases resulting from the previous six tips.

7) Follow up with your customers

With more than 53% of consumers expected to go online to find promotions during this year’s Black Friday and Cyber Monday, online retailers are in a prime position to maximize the impact of those purchases to drive additional sales just a few weeks later -just in time for the Christmas gifting period.

By asking customers to review products three weeks after their initial purchase via a post-transactional email, retailers have a justified and welcomed reason to re-engage with their customers and have the opportunity to offer coupons enticing them to come back and buy again. Based on over half a million emails where Brookstone asked customers to write reviews while simultaneously offering discount coupons – these post-transactional emails drove a 200% lift in sales as compared to their standard marketing emails.

But the benefit of the reviews collected by sending post-transactional emails does not end there; Diapers.com reported conversion increases of 14% for products with reviews. What this means is, products with reviews continue to see increased sales long after the immediate Cyber Monday rush. This cyclical process of product purchases and review generation continues to drive conversion and sales throughout the inventory life of any given product.

While it’s undoubtedly important to design and carry out traditional sales maximizing strategies this holiday season, supplemental tactics such as post-transactional email campaigns promise even greater rewards that effect both immediate and long lasting sales.

Best of luck to you all and “Happy Thanksgiving!”

According to JupiterResearch, 42% of 1,179 consumers surveyed have left a site without purchasing multiple products because they couldn’t get a question answered about just one of the products in their shopping cart.

Today’s shoppers want answers, and they’re willing to leave a retailer’s site to find them. Product specs and descriptions do a pretty good job of educating shoppers about features, but today’s discerning shoppers require more – they’re demanding more detailed information and advice about the unique nuances of real life usage and performance. If manufacturers aren’t able to answer those very specific questions, who is? Actual product users and subject matter experts have answered the call of duty – and savvy retailers are reaping the benefits.

Since launching AnswerBox in July 2008, evo has now generated thousands of questions and thousands of answers. But it’s their proactive response to the incoming content that really is deserving of attention and applause. Seeing how similar questions were coming in for many of its products, evo assessed the newly discovered gaps in existing site content and quickly deployed category-specific sizing and fit guides throughout their site. Also, having answered industry jargon questions like what “Blem” means, and clarifying shipping policies, evo has seen a significant reduction in those types of questions. Congrats to Nathan Decker and his team at evo for providing their customers with the answers that matter most to them. To learn more about evo’s succes please download our case study.

While PowerReviews developed AnswerBox to help retailers provide the most relevant answers to their shoppers, we also wanted to avoid the potential shortcoming of other solutions which sometimes display too many questions without answers. Our product team therefore developed a multi-pronged approach to help answer posted questions quickly and accurately. Answers are collected from a number of sources including people visiting the retailer’s product pages, people reviewing that product, the Buzzillions.com community, staff experts and even designated subject matter experts from their vendors. And most importantly, unlike traditional ‘one-to-one’ support channels such as email, phone or live chat, AnswerBox maximizes the impact of incoming questions and answers by displaying them on the product detail page – for all future shoppers to see and benefit from.

Finding answers just became a lot easier!

And given the current economic conditions we certainly hope so as merchants will need a full box of tools to capitalize on the upcoming holiday season. And according to recent survey findings presented in the Internet Retailer magazine and summarized by eMarketer in a recent article, THE TOP WEB 2.0 PRIORITY is customer ratings and reviews!

I couldn’t agree more with the article’s findings, of course, that regardless of the channel or the type, “Online merchants focused on user ratings and reviews have the right priorities.” As well as that, “Ratings and reviews were the most-useful e-commerce features according to 44% of online shoppers surveyed…”

So between the Customer Review Solution PowerReviews (www.powerreviews.com) we provide to hundreds of retailers, powering more review functionality to more than 2,300 of their websites, and our very successful reviews and recommendations site Buzzillions (www.buzzillions.com), working with us is the safest bet in town!

In closing, I’ll take last Friday’s publication of this data as a “lucky omen” heading into our annual summit – so don’t be surprised if you see me at the tables!

After processing a few million reviews we know a thing or two about customer reviews, one of which is that star ratings – when it comes right down to it – are really not as “valuable” as one might think. Why? Because the average rating given those two million plus product reviews is 4.2 out of 5 stars. And this high average is not unique to the PowerReviews (www.powerreviews.com) merchant network, as Bazaarvoice (www.bazaarvoice.com) has published nearly the exact same statistic about their merchants.

Quick sidebar: I think that in general, product ratings are so high because people like to talk about things they like, whether it is a good movie, restaurant, vacation spot, or a new product purchase.

So if the average rating is 4.2, then all those 4 star and higher products you see serve more as a general “thumbs up” rather than providing any real insight as to how good a product really is. In fact, providing just star ratings without any supporting comments – whether in the form of tags or free form content – can actually be misleading to the everyday consumer and offer no real comprehension to product’s performance. They see a 4 star rated product and think WOW that must be “tops” and in reality it may actually be less than the average product in the category (and that is why you will see category averages on Buzzillions (www.buzzillions.com), our reviews and recommendation engine.

So lets go back to the No Comment folks. What’s really behind them not leaving comments – well, the only thing I can think of is because “they” let them. Several of the Bazaarvoice implementations out there actually allow for “ratings only” reviews, which I would argue are not even a review at all. And given what’s mentioned above, one can only wonder why would anyone even build or offer such a service that really provides little or no insight. My best guess is that since they get paid to read/moderate on a per review basis, it would definitely be in their best interest to generate as many “ratings only” reviews as possible because what could be easier to moderate than this?

To you merchants who use such a system and allow such a “reviews” I ask you this: Are you really getting what you are paying for? Because this looks more like graffiti on the product page rather than a helpful customer review.

At PowerReviews we not only believe in but insist on product reviewers sharing some kind of insightful knowledge by sharing comments and/or choosing among tags like Easy to Assemble, Soft, Doesn’t Fade, Great for Three Year Olds, or just plain Comfy.

To illustrate my point, here’s that same product reviewed by the PowerReviews system:

In closing, let me be perfectly clear about a few things. “No Comment” reviews are not welcome at PowerReviews. Our review solution will slap you silly when you try to submit a review without any kind of supporting comments or tag selections. Nor will they find a home on Buzzillions.com either. And if you are thinking about slipping in through the backdoor via a feed from any of the Bazaarvoice clients we have already signed – think again. We painstakingly parse out the “ratings only reviews” and do not allow them on the site. And at last count, that was more than 20% of the time! OUCH!