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.

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.

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.

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.

What does this mean to a Shopify client?  We took an easy implementation and made it downright simple.  The usual integration process has three steps.  The first step is to upload a product feed.  With Shopify, we pull it directly from the Shopify platform with a click of a button.  The second step is to select the appropriate “write-a-review” forms for the product categories (that’s important because we have product-specific review forms with tags for the “pros”, “cons”, “best uses” and “reviewer profiles” that relate to each category).  Since this is very straightforward, we didn’t need to simply it.  The final step is to put our JavaScript code on their pages in order to display the review content.  With input from their CEO, Tobi Lütke, it was decided that their technically-savvy merchants would have the option to select exactly where to display their customer reviews.

Last, but definitely not least, we are about to launch a fully automated “Follow-Up Email” program with Shopify — automatically sending their clients’ customers an email 3-4 weeks after their purchase asking them to review the product.  Why is this a big deal?  As many of you know, a review solution on its own doesn’t guarantee success.  All of our ROI studies indicate that review volume is the primary driver of sales uplift, and follow-up email drives 95% of that review volume.  (one such ROI study is with Netshops)

So, welcome Shopify merchants to the PowerReviews family!  We are excited to partner with Jaded Pixel to offer you our award-winning review solution for Small and Medium-Sized Retailers fully integrated into your eCommerce Platform.

In his shopping research, Graham found his way to Kiddicare (as you might expect, a client of PowerReviews), and discovered two other innovations that were helpful in making sense of reviews for him – filtered navigation using review keywords (we call “Social Navigation”) and summaries of reviews (we call “Review Snapshots®”), both uniquely enabled by our “tag-based” approach to reviews.

I’ll let Graham describe his experience shopping on Kiddicare.com in his article, How to organise e-commerce product reviews.