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.

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.

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.

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.

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.

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.

Interestingly, the debate isn’t quite so black-and-white when it comes to applying Social Media to eCommerce.  The main question we get from our clients is not “Should we get involved with Social Media?”, but “How can we use Social Media to Increase Sales in a Measurable Way?”.  The answer to most of our clients is “You already ARE!”…through the use of reviews and Q&A (and combined with our In-line SEO solution and recently introduced Facebook/Twitter widgets).

Of course, that’s just putting a new name on old tricks…the NEW strategies that are emerging for eCommerce companies to engage in Social Commerce I believe will come in 3 primary flavors:

1)  User Generated Content will evolve into Social Recommendations.

The debate over the mechanical aspects of UGC (moderation, SEO, etc) is quickly falling into the background — meaning that, most mature websites will have some sort of reviews and/or q&a content, and that content will be well managed by an outside vendor or otherwise.  However, the process and technology of utilizing that content to guide other customers toward a better purchase decision (i.e. a Social Recommendation) is still an emerging frontier with tremendous opportunity.   Instead of competing for the “largest selection” or “lowest price”, I believe that Websites will eventually compete to have the “smartest customers” whom other shoppers can trust.

2)  Brick & Mortar experiences will include Social Recommendations.

Not overnight, since there’s some change in consumer behavior required, but it will become pervasive .  Whether it’s on product packaging, store signage or mobile devices,  Customers will insist on easy access to recommendations and feedback from their peers (and specifically peers “like them”) to supplement the assistance of a sales associate.  Let’s face it, no matter how experienced a sales associate is, he/she can’t know the collective experience of all their customers using each product.

3)  Social Media will be the Brand-Building tool of choice.

No matter how hard your PR or marketing works, because everyday people can talk about your brand with a high level of authenticity and trust, your advocates and detractors will continue to hold the largest sway on how other customers perceive your brand.  Figuring out how to amplify the opinions of your advocates and enabling them to recruit new users is a major opportunity.  The challenge of this effort is to execute a strategy in a credible, transparent manner.  For examples of what NOT to do, read about the Belkin’s fake reviews fiasco (if you haven’t already) or about Murphy-Goode Wines backfired video contest.

At PowerReviews, we are certainly working hard to experiment and find solutions that take advantage of these upcoming trends…mainly as extensions of our Reviews and AnswerBox solutions.  There are also several other innovators that are taking a different approach.  The first is LiveClicker, that is amplifying the power of recommendations through video.  Look at OnlineShoes.tv as a great example of ecommerce-enabling UGC.  Another is Ripple6 (see MomsLikeMe.com) that works with big publisher sites to identify and nurture brand advocates by offering robust community tools.

No matter what the ultimate solutions are, we are excited to be on the forefront of this Social Media groundswell, and I look forward to working with our clients and partners to creating a new vision together.  Oh yeah, I’d love to hear your thoughts in the comments below!

How It Works
Facebook Connect is integrated directly into the write-a-review process so it’s super easy for users to publish their reviews to Facebook.   In the past, users could post content to Facebook, but only if it was already on your site.  This meant that users had to keep checking back to see when their review was posted on the site.  How many people do you think remembered to do that?  Once it was live, they could then post the product page to Facebook.  Even then, their review may have been one of many on the page.  This posed too many barriers to the user to be an effective marketing tool for you.

With Facebook Connect, users can now post their review to Facebook immediately after they write it, while their excitement about a product is fresh in their mind (and before they forget to do it).

Facebook Connect highlights their specific review content in the post and allows them to add their own comments.

The key is that PowerReviews posts only a “snippet” of the review on Facebook, requiring their friends to click on a link to read the rest of the review – which takes them to your site — and that’s what drives the immediate traffic uplift.

When their friends arrive on your site, the review is highlighted, making it a fulfilling experience once they arrive.

Why Use It
Facebook is the largest social network in the world.  In April 2009, Facebook reported an estimated 200 million monthly active users.  This is a powerful network that you can use to spread the word about your products and your site, driving significant short term and longer term traffic to your site.

During Citysearch’s initial beta testing of Facebook Connect they found:

“In the four months the site has been testing Facebook Connect, 94 percent of reviewers have published their reviews to Facebook, where an average of 40 people see them and 70 percent click back to Citysearch. That has translated into new members: daily registrations on Citysearch have tripled.” New York Times

That’s an average of 40 people seeing a post about your site and 28 people coming to your site for each review posted to Facebook.  Not bad.

If you are interested in using Facebook Connect with Reviews on your site, contact us at info@powerreviews.com.  If you happen to be at the Internet Retailer Conference East in Boston, June 16 and 17, stop by Booth #1036.