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.

You may have visited the new PowerReviews website in the last month.  Or come to our booth at Shop.org.  Or downloaded one of our Case Studies.  If so, I would venture to guess that your eyes widened, and your mind started to ask questions.

Yes, we just completed a soup-to-nuts re-branding and re-design of EVERYTHING PowerReviews.  We called this massive project “PowerReviews 2.0”, and it was truly transformational.  We realized that so much of what we do has expanded beyond our name, and our brand.  So we wanted to state clearly what PowerReviews means now, and why we are so excited about our growing footprint in the social commerce and social media arenas.

We decided to tell this story in video.  First, a video of me discussing the underlying positioning and design goals of PowerReviews 2.0.  Then, a video of our amazing design team – Project6 – discussing the creation of our new look and feel, logo, website and collateral materials.  The Project 6 team did an amazing job of tapping into the core essence of our company personality and effectively communicated PowerReviews in a visually impactful way, throughout every touch-point to our customers.

Enjoy!

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!

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.)

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.

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.

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.

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!

On a smaller scale, PowerReviews has undergone its own significant changes this past year.

1. We now have more than 350 Enterprise clients (up from 150)
2. We launched PowerReviews Express to help small and mid-sized retailers take advantage of our solutions
3. We launched some some exciting new products including AnswerBox, an iPhone App to aid in-store shopping, Social Cross-Sell and Hero Images
4. We expanded internationally to the UK, France, Germany in multiple languages with La Redoute, KiddiCare, iRobot, Shop Direct and many more leading retailers
5. Buzzillions broke past 4 million reviews and established itself as a leader in using reviews to help customers make smarter shopping decisions. See the write-up on Buzzillions in the WSJ

Although there are many factors that contribute to this huge success, we truly believe that it was primarily resulted from building true partnerships with each individual client. This spans from working together to collect as many highly-relevant reviews as possible to drive conversions, to working together on experimental ideas through Buzzillions, to SEO optimization methods and Social Navigation deployments. Our original vision of creating a highly-aligned network of retailers, manufacturers and partners has solidly taken root this year.

Looking ahead into 2009, we see a lot of exciting new trends in the world of ratings and reviews (and other customer-generated content/community).

1. Reviews will be ubiquitous.  Most of the IR Top 500 retailers will have deployed reviews and that trend will continue to the smaller/niche retailers. Brands and luxury retailers will also start to adopt these technologies.
2. Because reviews will be everywhere, consumers will actively seek out those sources that are more CREDIBLE and RELEVANT…which means that consumers will become ultra-sensitized to reviews that look like “testimonials” or “marketing copy” vs. “unbiased reviews”. I also expect that more unethical marketers will try to sneak fake reviews into the system.
3. Reviews will morph into a 3-way dialog between other customers, the retailers and the manufacturer. Everything we build (Customer Reviews, AnswerBox, etc) encompass the idea of a “network” where content can be easily aggregated, analyzed, shared amongst all the partners.
4. Retailers & Manufacturers will start tapping the rich data to improve their businesses. Manufacturers will use customer feedback to improve their product development and product marketing processes. And Retailers will do the same to tune their product assortment and merchandising strategies.

What are your predictions?

On a closing note, as we contemplate all the opportunities (and challenges) ahead, I want to thank all of our fabulous clients who have worked so collaboratively to make PowerReviews successful, our network of partners who have evangelized our products and leveraged the reviews in creative ways, and the entire PowerReviews team whose talent and dedication have made this year successful.

Thank you again for another great year, and have a relaxing and well-deserved holiday!

-Andy