Archive for August, 2006

Marketing Strategy, New at Bazaarvoice, Ratings & Reviews, Search & SEO, Word of Mouth

Sam Decker NEW SyndicateVoice Announcement –> Word of Mouth AS Advertising

August 28th, 2006 by Sam Decker Chief Marketing Officer

We believe word of mouth advertising is effective when word-of-mouth actually IS the advertising. According to emarketer Word of Mouth is top of mind for marketers.

To address this opportunity, tomorrow we announce SyndicateVoice, a revolutionary new opt-in program for our clients, where clients choose the partners they want to syndicate reviews to that are in our SyndicateVoice Network. 

We don't own any of our clients or customer's reviews, so explicit client permission is required and all partners clearly display that they are the source of the reviews. In summary, we are partnering with the leading portals and shopping comparison sites to create additional customer acquisition opportunities for clients that want to participate.

At launch, we are announcing partnerships with MSN, Smarter.com, and PriceRunner. We also feed to Froogle's open API. Many more SyndicateVoice partners will be announced soon.

There are three primary benefits to retailers (our clients):

  1. SEO / natural search benefit – links from the portal to the client's site go to the client's subdomain
  2. Brand impact – clients expose the reviews to millions online shoppers on top-tier shopping sites (for example, shoppers are discovering for the first time that CompUSA has reviews!)
  3. Acquisition results – shoppers who read the review snippet on the portal link to the retailer to see the full review, and purchase from there.

Our goal is to deliver a growing set of features, services and technology to expand the impact of customer content. This announcement follows recent announcements of FeedVoice™ (the first hosted RSS feed for top rated products) and SearchVoice™ (our hosted & branded search engine optimized landing pages). This is the start of a new marketing paradigm – syndicating word-of-mouth to drive customer acquisition.  We expect to make many bold moves in this area.

If you’re interested in learning more about this program, email info@bazaarvoice.com. Ad Age has already covered this.

Here’s what our client’s reviews look like on Smarter.com, for example…

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Community, Customer Centricity, New at Bazaarvoice, Word of Mouth

Wayne Stribling Bazaarvoice Wins PETCO Vendor of Year Award!

August 24th, 2006 by Wayne Stribling Former VP of Client Services

 

PETCO Vendor of Year AwardOn behalf of the entire Bazaarvoice Team, we are thrilled and honored to win this outstanding award from PETCO and will display it prominently in our offices. PETCO initiated this award years ago to recognize vendors that went above and beyond the usual vendor/retailer affiliation and developed a strong partnership with them.  I think the reason we won this award can be attributed to the value PETCO derives from our solution and our exceptional customer service. 

Since implementing the Bazaarvoice solution, PETCO has truly experienced the power of customer Word of Mouth marketing. As a matter of a fact, they recently conducted a survey of their customers asking them to rate "What online tool most influenced your purchase decision?" The #1 answer was Product Ratings & Reviews, with site search coming in a distant second. This is powerful feedback from their online community that also explains why they now have a higher average conversion rate and a larger dollar amount spent per order as a result of implementing our solution. 

We recently completed a number of brand analysis reports for PETCO in which we analyzed product review feedback for specific brands. These reports identified significant customer feedback trends for each brand as well as overall community sentiment toward each brand. PETCO was able to see how each brand is being rated and exactly what product attributes their customers like about each brand.  

PETCO is an excellent example of a Bazaarvoice customer that has realized significant benefits from implementing our solution. They have built a stronger online community, are gathering valuable customer feedback about their products every day, and are achieving a significant ROI. We are very proud to receive their “Vendor of Year” award and happy to see what our solution has done to improve their business.

 

 

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Customer Centricity, Marketing Strategy, Word of Mouth

Brett Hurt ‘An Inconvenient Truth’, Wal-Mart, and Word-of-Mouth

August 17th, 2006 by Brett Hurt Founder and CEO

A month and a half ago on this blog, I predicted that An Inconvenient Truth would be remembered as the most impactful documentary to date.  There was no doubt in my mind that consumer sentiment is shifting towards green products for a variety of reasons – environmental (i.e. concern about the earth), political (i.e. oil conflicts), and sociological (i.e. concern about the crops that are being wiped out in Africa).  Here is an interesting quote from BusinessWeek that brings it home, so to speak:

  • "That American drivers aren't cutting back, and may not cut back drastically even if prices go higher, has huge implications for the world oil market. That's because U.S. motorists are the single biggest consumers of petroleum in the world. They use more than 9 million barrels of gasoline a day. That's roughly a third more than the consumption of all types of petroleum by every home, car, and factory in China, the nation whose energy consumption gets all the attention these days."

Green coffee supplier to Wal-MartWhat I didn't expect is that a month later, Wal-Mart would lead the charge (see Fortune magazine's article).  From a word-of-mouth and customer demand perspective, this makes complete sense to me.  Witness the amazing rise of Whole Foods Market, which is actually headquartered here in Austin.  Their stock has skyrocketed up to 500% in the past five years.  Why should Wal-Mart (or anyone else) cede such amazing growth to Whole Foods?  Clearly the market is ready for competition, and Whole Foods has been virtually uncontested.

Whole Foods Stock Growth

If you read the Fortune article, you will learn that Wal-Mart had Al Gore kick off this initiative.  What a great way to spark word-of-mouth inside the massive Wal-Mart employee base (they employ more people than the US Postal Service).  If those employees turn into evangelists, you can bet that will "infect" Wal-Mart customers as well.

Wal-Mart's scale is almost incomprehensibly massive.  Their scale almost put Vlasic out of business a few years ago.  As the corporation of retail corporations, they get their share of negative word-of-mouth, but most of it is among the intellectual elite.  The masses are actually very positive on Wal-Mart (because of their obvious low-price focus), and Ed Keller (one of our Board members and the former CEO of Roper) confirmed that Wal-Mart is one of the word-of-mouth marketing elite, right up there with Toyota, Honda, and the iPod.

But this is Wal-Mart's most brilliant word-of-mouth marketing move to date, especially among the intellectuals.  Because the intellectuals are the ones that will most appreciate An Inconvenient Truth.  And Wal-Mart has the scale to literally force many CPGs to "go green".  It is a big blow to Whole Foods, and it will be interesting to watch how they react.

Scale drives business change faster than any other factor.  How will you leverage your scale to "go green", spark positive word-of-mouth, explore new niches, and ultimately create higher margin opportunities?

By the way, I may appear to be a "greenie" but I am actually a die-hard technology optimist and believe that entrepreneurs will soon figure out real alternatives to oil given that it is a multi-trillion dollar business opportunity. 

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Research, User-Generated Content

Brant Barton User-Generated Content Sites Are Driving Web Growth

August 16th, 2006 by Brant Barton Co-Founder and Chief Innovation Officer

Earlier this week, eMarketer reported that 5 of the top 10 fastest growing web brands are user-generated content sites.  Read the full article here. 

Sure, MySpace.com's top spot on the web traffic leaderboard is old news at this point, but did you know that sites like Heavy.com (video sharing) and Flickr (photo sharing) are far outpacing MySpace in month over month audience growth?  As eMarketer reports, the growth of user-generated content sites shows that "Web users are eager to let their voices be heard."  Absolutely!  And this is true not only for amateur journalists turned bloggers or the next George Lucas who sees YouTube.com as the ultimate distribution channel.  It's true for the everyday consumers of your products and services.  

So what's the takeaway?  If user-generated content is driving overall web growth, you've got to position your company and brand to benefit.  Turn this global trend inward to drive the growth of your business by providing a platform for content creation, participating in the content-creation process on sites outside and beyond your own, and working to "recruit" the consumers that are leading the charge.  For more on the last point, read up on Creators, Synthesizers, and Consumers.  You can segment your own customer base in this way – a small minority has the power to influence the masses if you just give them a voice.    

I'll end this point with my favorite quote from the eMarketer article: "If these trends continue, the makeup of the Web's top 10 destinations could look very different in the coming months and years."  Lookout Google & Yahoo! 

 

 

Customer Centricity, New at Bazaarvoice, Ratings & Reviews, Research, User-Generated Content, Word of Mouth, eCommerce

Sam Decker New Jupiter Report on Ratings & Reviews

August 15th, 2006 by Sam Decker Chief Marketing Officer

Today JupiterResearch released and announced a report on user-generated content for retail — specifically the use and impact of ratings and reviews for retailers. We launched our own release with more detail, below. 

This is exciting for us because this independent study validates what we've seen in actual results with our clients. In the words of Patti Freeman-Evans, the analyst on this report, 

"Shoppers who find user-generated reviews and ratings useful tend to spend more heavily online than average online buyers do. Moreover, they are more likely to say they are highly loyal to, buy more frequently from, and return their purchases less frequently to stores that feature user-generated product reviews. This is the winning trifecta of positive results from reviews and ratings features and speaks to the overall value of such a program in terms of profitability and customer retention. "

 

Leading Retail Analyst Shows Retailers Can Gain Market Share
Through Consumer-Generated Product Ratings & Reviews

Leading analyst firm says product ratings and reviews achieve a “winning trifecta” of increased loyalty, purchase frequency, and reduced returns for online retailers

Austin, TX – August 15, 2006 – Bazaarvoice, an innovator in helping brands use online word of mouth to build their businesses, today announced that JupiterResearch recently issued a study that shows retailers can drive sales by adding user-generated ratings and reviews to their Web sites. The report, entitled Retail Marketing: Driving Sales Through Consumer-Created Content, cites user-generated ratings and reviews as the second most important site feature behind search, and says that retailers who adopt ratings and reviews as a differentiator and retention strategy will gain market share.

“The recent report from JupiterResearch supports exactly what we’ve been seeing in the market,” said Brett Hurt, founder and CEO of Bazaarvoice. “Online retailers are adopting customer reviews as a way to create brand loyalty and increase sales. Our clients tell us that launching consumer-generated reviews is their important site initiative of the year, and we’re working closely with each of them to ensure it’s also the most successful.”

Reviews are Exploding
Trust in “someone like me” for advice and referrals has exploded from 20 percent to 68 percent in the last two years. (Edelman, January 2006). Recent surveys of top retailers from Shop.org and MarketingSherpa found that customer reviews were a top merchandising tactic. The recent report by JupiterResearch found that the number of online buyers who cite customer ratings and reviews as the most useful shopping site feature has more than doubled from 2005 to 2006.

Reviews Create Loyalty & Drive Sales
In addition to rising demand for consumer reviews, JupiterResearch also found that online shoppers who find user-generated product ratings and reviews useful are heavier online spenders than average online buyers. For example, online buyers who write a lot of product reviews make up only 20 percent of the online shopping population, but account for 32 percent of online sales. JupiterResearch also found that shoppers that find reviews useful are more likely to say they are more loyal to, buy more frequently from and return their purchases less frequently to stores that feature consumer-generated product reviews and ratings.

“Across the board, Bazaarvoice clients are finding that reviewers are their most valuable customers,” Hurt continued. “By increasing the loyalty of these influential, high-spending customers, retailers will significantly grow sales by enabling this feature.”

Reviews Are Positive
All retailers want to understand how negative reviews will impact their business. Recent research suggests that there is less to be concerned about than many retailers might imagine. According to research by KellerFay Group, 63 percent of all word of mouth is positive. Across all of Bazaarvoice clients, 80 percent of product ratings are 4 or 5 stars out of 5. As a third confirmation, JupiterResearch’s study concludes that 60 percent of online shoppers provide feedback about a shopping experience, and are more likely to give feedback about a positive experience than a negative one.

“I know the level of expertise and customization that is required to service large retailers, which is why Bazaarvoice offers a hosted and fully managed solution for on-site customer ratings and reviews,” says Sam Decker, vice president of marketing and products for Bazaarvoice and the former manager for Dell.com’s consumer web site. “We work closely with every client to help them customize a review program, manage the complete reviews process, and help them leverage reviews in their marketing and merchandising programs.”

In the JupiterResearch report, author Patti Freeman-Evans says that the “license model offers expertise and flexibility at a moderate cost.” Bazaarvoice offers hosted technology, full community management services, a dedicated account team, deep community analytics and syndication services to retailers for a fixed monthly subscription cost.
           
"This model, most notably offered by Bazaarvoice, allows retailers to take advantage of a great deal of vendor expertise, while retaining a good deal of flexibility in customizing the site experience to their individual needs,” writes Freeman-Evans, retail analyst at JupiterResearch. “The vendor takes on the responsibility of looking over the reviews for publication and provides services that assist retailers with optimization and marketing efforts.”

For more information about the Jupiter report, Retail Marketing: Driving Sales Through Consumer-Generated Content, please visit http://www.jupiterresearch.com or contact Bazaarvoice at http://www.bazaarvoice.com.

About Bazaarvoice
Based in Austin, Texas, Bazaarvoice offers outsourced technology, community management services, analytics, and syndication to encourage and harness word of mouth marketing, and bring it closer to a company’s brand and customer experience. The company’s flagship hosted and fully managed customer ratings and review service allows businesses to enable, encourage, and analyze customer ratings and reviews on their website. With Bazaarvoice, companies can empower their customers to share honest opinions and influence each other to make more informed and rewarding purchase decisions. Clients like CompUSA, Overstock.com, and PETCO benefit from a credible and reliable customer-to-customer community, without having to delve into complex IT work or the laborious process of community management. Bazaarvoice is a winner of the “Red Herring 100 North America” award by Red Herring magazine. For more information, please visit the company’s website at www.bazaarvoice.com or email document.write('info@bazaarvoice.com<\/a>'); info@bazaarvoice.com .

 

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Customer Centricity, Marketing Strategy, Research, User-Generated Content, Word of Mouth

Brett Hurt Yahoo!’s User-Generated Ads, GM, Google and MySpace

August 12th, 2006 by Brett Hurt Founder and CEO

Quite a bit of noteworthy news this week:

Monday:

Yahoo! has acquired many Web 2.0 / social networking properties in the past year, including del.icio.us, Flickr, Upcoming.org,  and WebJay (plus they are rumored to be shopping for digg).  Yahoo! also launched 360 last March, Shoposphere in November, and Yahoo! Answers in December.  From my perspective, they are turning to social networking as the answer to competition from Google.  At Bazaarvoice, we know that people who write reviews on a retail site return an average of four times just to see if their review posted yet.  This shouldn't be that surprising as the social call-to-action to write a review in the first place would lead one to want to see that their own word-of-mouth actually "went public".  Yahoo!'s strategy seems sound to me as they have a diversified portfolio of services to get users addicted to, and therefore monetize more advertising.  Therefore, the more repeat visits, the better.

So, it makes sense to me that last week Yahoo! announced a contest for users to create their own Yahoo! advertisements.  This is a smart way to generate word-of-mouth for the new Yahoo!  It reminds me of what General Motors did recently for The Apprentice.  Here is my blog entry on that topic.  You may want to check out some of the new Yahoo! user-generated ads – some of them are quite clever and entertaining.  There is a lot of talent out there waiting to be tapped (remember crowdsourcing?).

Update on 8/15: Data released by Neilsen/NetRatings shows visitors to Google-branded sites in July spent less than an hour a month while AOL visitors logged 5 hours 35 minutes and Yahoo! visitors logged 3 hours and 10 minutes.  This made Terry Semel proud, as clearly his diversified media strategy is his core competitive differentiator.  Google visitors are reported to be more like "hunters" while Yahoo!'s are "gatherers".  No doubt this is encouraging for Yahoo!, but what really matters for both Google and Yahoo! is how well they drive customer acquisition for their clients.  Google's entire business model is based on that goal while the majority of Yahoo!'s is (they are more revenue diversified for obvious reasons).  I believe that Yahoo!'s user-generated ads strategy will only drive more awareness of why people need to spend more time on Yahoo!.  Are companies looking for hunters or gatherers?  Obviously the answer is a mixture of both.

 

Thursday:

Wayne Stribling, our VP of Client Services, sends me this article.  I am struck by two things.  First, this quote:

  • "The voice of the customer is actually getting heard by the manufacturers," said Neal Oddes, director of product research and analysis for J.D. Power. "They are understanding what's getting replaced, what's going wrong, and then they're taking that information and designing better products."

Second, the fact that General Motors has two of the brands in J.D. Power's top five most reliable.  This reminds me of my blog entry about the change in General Motors culture brought on by word-of-mouth techniques (such as their blog).  I like the fact that J.D. Power's is now showing quantitative evidence of this change.

I have long believed that the Internet and the power of word-of-mouth will make companies more customer-centric and, therefore, products and services far better than in the past.  An educated consumer serves as a wake-up call – no more being lazy.  Co-creation will generate more sales and customer satisfaction.

 

Friday:

Google, not to be outdone by Yahoo!, invests $900 million in Rupert Murdoch's MySpace to become their exclusive search engine provider.  Instead of Google creating the social networking properties, like Yahoo! is doing, they decide to partner with the best of them (the traffic growth for MySpace is off the charts).  Here are the words from Eric Schmidt, CEO of Google, from his speech at the Search Engine Strategies conference this week:

  • But the "development to me that's most interesting is the social networks as online lifestyles. That's a really new phenomenon," [Schmidt] said. It's a phenomenon on scale with the rapid-fire adoption of instant messaging, he added. "It's [social networks] a big deal."

$900 million is a lot of money, no doubt.  But there are two reasons why this makes a lot of sense for Google.  First, eMarketer announced that ad growth on social networking sites will grow astronomically ($280 million in 2006 to $1.9 billion in 2010).  Second, MySpace is the favorite destination for the IM Generation, which all marketers will need to learn how to advertise to.  They distrust traditional advertising (and companies) more than any other generation (because they are the most educated, due to the Internet), and they turn to their friends for recommendations (i.e. word-of-mouth) more than any other generation.  For more research, see my blog entry on the IM Generation.

Pivotal changes are underway… and that creates a tremendous amount of opportunity for marketers if they navigate these new waters correctly.

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Marketing Strategy, Research, Word of Mouth

Sam Decker If Milk and Dog Treats can get hundreds of reviews…

August 4th, 2006 by Sam Decker Chief Marketing Officer

If you ever wonder about getting enough review volume, consider this…

Consumerist posted this about the Milk Reviews on Amazon.com…

Currently, over three-hundred people have reviewed "milk."

Nearly universally, the Amazonable milk holds great appeal for the customers, even to the point of possessing magical properties.

It turned one reviewer's pussy cat into Halle Berry, cured a sister's ovarian cancer, and others claim it can replace blood in a pinch.

 

 

While this is amazing, and the reviews are very interesting, the volume is not entirely surprising to us. We see certain products on our clients that get a lot of volume, even the lowest priced products. For example, within months of launch, every Golf ball on golfsmith.com has ratings and reviews. On PETCO.com, there are 244 reviews for a $.99 Greenies dog treat!

It's these products that pull the influencers in, get them engaged, and create runaway product hits. And…based on the diproportionate number of reviews within a category, can help you identify the runaway product hits that you can merchandise in all your marketing vehicles. It's faster to sail with the wind of the customer voice than to try to jibe against it.

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Ratings & Reviews, User-Generated Content

Sam Decker “Negative reviews do not hurt a product…”

August 1st, 2006 by Sam Decker Chief Marketing Officer

Almost every client we begin working with asks the question about negative reviews. And almost every client, once they're about a month from launch, wonders why they were worried to begin with. Part of this concern is relieved by the Ratings "J Curve", where 80% of ratings submitted are 4s or 5s. Al Hurlebaus, Sr. Director eCommerce for CompUSA said, "Before we launched reviews my anxiety-level was a 9 out of 10. Today it is a 1." 

But there's more to this topic. Is it possible that negative reviews help increase conversion? Definitive data is not in (yet), but I attended a shop.org Annual Summit several years ago where Amazon and eBags hinted in a panel discussion that products with mixed reviews helped conversion. Consumers we talk to say they look for negative reviews first to help them make the purchase decision. Without them, they lack the necessary information to move forward. And from this anecdotal focus group, they suggest that negative reviews rarely stop them from buying unless the reviews are all negative or include a negative comment of a feature that was important to them.

Don Zeidler, Director of Direct Marketing for the W. Atlee Burpee Co. (Burpee Seeds), believes negative reviews help their business. Burpee was one of Bazaarvoice's first manufacturer clients. That is to say they are featuring reviews on the products they sell — so they certainly have a lot riding on their customer reviews! Here's what he says:

"As for the product(s) with negative reviews – my experience is that negative reviews do not hurt a product as long as there are also positive reviews associated with it.  I'd guess that when customers see a mix of different ratings they are more apt to trust the review process. Second, as we all know as marketers (or should know) customers that are interested in a particular product are ONLY looking for affirmation or reassurance that the product is right for them, it's one they need to have.  Negative reviews help customers affirm they've vetted all concerns before making a purchase decision. As long as the reviews are not entirely and overwhelmingly negative — just nit picks that people decide they can live with (they usually are), — these negative reviews help customers pass through purchase paralysis."

Don Zeidler is the Director of Direct Marketing for the W. Atlee Burpee Co., a 130-year-old brand famous for revolutionizing home gardening in America. Beginning in the late 1800's Burpee's slogan—"Burpee Seeds Grow"—was the guarantee that raised the bar (and profits) in what was at the time a "seedy" business of selling to farmers in an agrarian society. Much has changed over the years but not the trusted quality the Burpee name means to home gardeners. Don is responsible for Burpee's web site development and management, e-mail marketing and programs, as well as e-commerce performance. His offline responsibilities include catalog circulation, advertising, and ancillary product merchandising. Don has close to 20 years direct marketing experience and brought Burpee online in 1996. His application of sound direct marketing strategies in a dot-com environment is a major component of Burpee's continued on-line success.

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