To put it simply, it’s a lot. Let’s consider a few assumptions:

• There are probably about 20 impressions average per “decision” made online
• On average, user generated content influences a 20% lift in conversion
• The average spend per decision is around $45
• Returns are reduced by about 5% when user generated content is involved
• For every dollar spent online, about $5.70 is spent offline

Running a few simple calculations, this puts the value per impression at $0.56. Or in total, about $56 billion dollars of online value. If you use the stats published for offline influence, it goes up to $3.25 per impression, or $325 billion in value. Sounds incredible – and sure, there are some assumptions here, but when you think about the impressions we’ve served up in just under five years being worth $325 billion, it ranks as just above the 25th highest Gross Domestic Product. In another five years, it will eclipse the top 10.

Who’d have thought 100 billion user-generated content impressions would be worth more than the GDP of Austria? 

On Friday, October 30, Bazaarvoice was named the 2009 Technology Vendor of the Year by Retail Systems magazine. The competition was tough, with eight finalists vying for the title, including several huge, well-known UK providers.

This Award comes on the heels of rapidly accelerating company growth in Europe. Of the UK’s top 50 UK online retailers, 34 have reviews on site, and we’re happy to say that 19 of these are Bazaarvoice clients.

As our sales and implementation team grows in the UK and across Europe, awards like these – in addition to the positive results and feedback we get from these international clients – tell us we’re providing a service that is needed and appreciated by top international brands.

It’s been a banner year at the London office of Bazaarvoice, with the addition of Andy Leaver, Vice President of International Sales, in July, and another high-impact UK Social Commerce Summit in October.

“There are rare times in your life when you know you’ve just discovered a company that combines talent, passion, energy, and product in an explosive way – Bazaarvoice has that elusive mix,” Andy said.

Andy comes to Bazaarvoice with nearly two decades of experience building out EMEA operations for technology leaders. Most recently he led the EMEA team for two years at SuccessFactors, where his team won over 350 customers. Prior to SuccessFactors, Andy was the EMEA VP for Ariba, founded the European consulting team for Microsoft, and worked directly with the board and Jack Welch at General Electric.  You know, just a few challenges here and there.

From London, Andy has ready access to our European and APAC sales teams, which are growing exponentially – we’ve doubled our APAC team just in the past month. With his experience growing sales teams and acquiring great customers, we expect our European teams to outshine our US teams in short order. And yes, that’s a public challenge to everyone on the teams!

Andy was ready to take a break from a high-paced career when we found him, but once he saw the opportunity and how well we meet global clients’ needs, he decided to jump in with both feet. It’ll be an amazing ride, and I can’t wait. And don’t forget to ask him for his “go-to karaoke song” when you meet him.

Read more about Andy Leaver in our press release, and stay tuned to our blog for updates on our APAC and European expansion. With many new client announcements coming very soon.

A couple of weeks ago, Bazaarvoice hosted a business luncheon for 40 attendees from companies such as M and M Direct, Hamleys, and Lands' End at the Century Club, an exclusive central London media club in the Soho district. Opening speaker Justin Crandall, Managing Director of Bazaarvoice, emphasized the importance of optimizing user-generated content through four phases of maturity:

• Content Generation
• Online Amplification
• Multi-Channel Diversification
• Business Transformation

Ashley Friedlein, CEO and co-founder of Econsultancy, elaborated further on multi-channel marketing and business structure transformation in his keynote presentation. 

"The battle [for credibility] has already been won," Friedlein said. Consumer feedback has become the norm, not a novelty. Seventy-eight percent of consumers believe that customer recommendations – whether in review, Q&A, or story form – are the most credible form of advertising, according to a 2007 study conducted by Nielsen Media Research. Products with 20+ reviews lead to nearly 84 percent higher conversion rates, on average. Bazaarvoice Ask & Answer clients saw a 22 percent increase in conversion for products with more than two answered questions, as well as a 28-81 percent decrease in call center volume. 

Yet with 92 percent of the UK’s Top 25 online retailers implementing ratings and reviews for their products, forward-thinking companies must set their content apart by innovative means. 

"Most interactions with your brand online aren’t on your main site," Friedlein said. "Can you take your shop to them?" After retailers have maximized their online usage of their consumers' feedback, the next step is to take that content offline and into stores to deliver further value. The implications for marketing, positioning, and packaging are endless. Friedlein cited Sephora's sales spikes in its most reviewed beauty products as an example; other companies are using reviews in direct advertising, call centers, public relations, catalogues, in-store displays and mobile media. 

Some brands have gone one step further to collaborate with other companies for user-generated designs. H&M allowed Sims 2 players to design their own H&M-inspired outfits; the winner’s creation was made available for purchase in nearly 1,000 H&M retail locations for $14.90. Other retail sites have implemented federated commerce, linking up products to social networks, allowing customers access to their products from anywhere – Facebook to Paypal, eBay to widgets customizable for different Web sites, Dell to Twitter. 

The key to the final phase of social commerce lies in brands utilizing their content for business insight —what's known as "operationalizing user-generated content." Smart companies use their product feedback not only to drive sales, but also to make merchandising decisions, improve product functionality, and drive business intelligence. 

This post was guest-written by Tony Capasso, Bazaarvoice Sales Director.

When a company like Bazaarvoice assembles the best and brightest to shape an industry, in our case Social Commerce, it becomes clear that those individuals have much to offer not only to the company but also to the community at large. The Bazaarvoice Foundation was created to give our employees the opportunity to make that impact and every quarter we choose a cause and go out to do our part. Unfortunately due to limited time we cannot impact as many causes as we’d like together as a group.

The Bazaarvoice Speaker Series was started to bring community leaders into our four walls so that we could expose all of our talented, motivated and passionate employees to as many causes as possible with the hope that along the way an individual might connect with a particular cause and be inspired to make their own contribution in their spare time. We were fortunate enough to host Doug Ulman, CEO of the Lance Armstrong Foundation, at our offices last week to kick off this series. You can see the video he presented here: http://www.bazaarvoice.com/video/livestrong_video.html.

The LAF is a national organization headquartered in our backyard, right here in Austin. Their mission is to inspire and empower people affected by cancer and by Doug’s admission don’t strive to be the biggest organization or raise the most money, they strive to make the biggest impact. They do this by creating experiences for people and their goal is to create social change and lead a movement. This is a movement to facilitate the dialogue around what it means to be an active citizen, what it means to be healthy and what it means to take control of your life. At the end of Doug’s talk we asked if anyone had questions and the entire room was silent. It was difficult to formulate words while holding back the tears and putting into perspective how so many people are inspiring each other to Livestrong.

If you can spare 30 minutes to watch this video you will be overwhelmed at the story behind how the organization was founded, how the LAF is building community, the genesis of that little piece of yellow silicone and the explosion of a truly global movement to fight an epidemic. Did you know that Livestrong is one of the fastest-growing apparel brands in the world? There is also a very personal story about Doug himself who is a cancer survivor and he personifies Livestrong every day. Doug is a good friend and one of my favorite stories I like to tell about Doug is how on his 28th birthday he woke up and ran 28 miles. I am not sure what you were doing on your 28th, but that sure made me think.

I'm excited that we're already planning our next speaker at a great charity we are already involved with. These talks show us all how we can get involved, in our own way.

 Assume a few things:

1. You've got $10m in online sales annually.
2. You've got $2m in returns from online sales, resulting in $8m total in net sales.  This makes your return rate 20% of annual sales.
3. You've got a conversion rate per session of 3% – meaning 3% of each session actually buys something.
4. You've got an average order value of $100.
5. You're processing 100,000 orders per year, or on average 8,333 per month.  Let's smooth out the holiday spikes for now.
6. With 3% conversion resulting in 100,000 purchasing sessions, you've got roughly 3.3million total sessions a year.

Assume a few more things that we've learned at Bazaarvoice:

1. Reviews can raise conversion by 20% to 30%.  Let's assume 20%, so your new conversion rate would be 3.6% instead of 3%.
2. Reviews can reduce returns by 10% to 20%.  Let's assume 10%, so your new return rate would be 18% instead of 20%.
3. Conservatively it takes your organization 90 days after going live with reviews to promote and make your customers aware.  Most organizations hit this 90 day window easily, and some start day one with lots of content pre-collected.
4. For now, we'll ignore the other benefits of having user generated content on your site.

Now to the benefits…

When the program is live and running:

1. You'll be averaging 10,000 orders per month instead of 8,333.  This will gross you $166,700 in revenue per month, or an additional $2,000,400 annually.
2. You'll reduce returns from 1,666 orders returned monthly to 1,500 orders returned monthly.  This will gross you an additional $16,600 per month, or $199,200 annually.

Now let's look at the time value of reviews:

If you wait and only have reviews live and running for 3 months in 2009 you'll increase your total gross sales by $549,900, or 6.8% improvement of your previous $8,000,000 net after returns.

If you move quickly and get reviews live and running for 6 months in 2009, you'll increase your total gross sales by $1,099,800, or 13.7% improvement of your previous $8,000,000 net after returns.

If you move now and get reviews live and running for 9 months in 2009, you'll increase your total gross sales by $1,649,700, or 20.6% improvement of your previous $8,000,000 net after returns.

If you already moved, and are running and live for all of 2009, you'll increase your total gross sales by $2,199,600, or 27.5% improvement of your previous $8,000,000 net after returns.

Whatever your goals are, this content will help.  Help you grow your business, help you improve your customer's satisfaction with your brand, and help drive your personal achievement as you execute flawlessly in 2009.

I know this is a simple approach to a complex calculation – which is why we've got an entire set of spreadsheets to help refine these calculations specific to your business.  Email me at (osborne AT bazaarvoice DOT com) if you want our help in creating these spreadsheets for you – we're happy to do it.  I'm the type that loves to know what I'm missing – and once you know, you won't want to miss out anymore…

$1,000 split among everyone was little. $1,000 by itself was large. So I decided this year we would do something different. I called one of our investors, Julie Constantin, and asked her for a recommendation of where to donate the money. Julie and her husband are very involved with charities – helping the V foundation and many others. She immediately suggested The Grace Family Vineyard Foundation, and gave me Dick Grace’s phone number. What happened next was unbelievable.

Dick Grace and I talked and he happily agreed to chat with the entire global sales team live – to tell his stories and explain what they do. The Grace Family runs a vineyard in Napa Valley that’s known for their incredible wines – cult rarities that often fetch tens of thousands of dollars at auction. And all of the proceeds go directly to the foundation. Dick explained that he himself (a man of seventy plus years) and family and friends travel the world helping children and the underprivileged DIRECTLY, using each dime of the foundation’s money to directly impact those in need. Bottles of their wine will sell for $500 in a restaurant, and Dick told us that the same amount of money will feed, clothe, house, and educate 3 people FOR A YEAR. Dick’s stories about helping children attacked by wild dogs, building hospitals and schools, and building libraries for those in need touched everyone in the room.

Dick’s philosophy is simple: don’t JUST donate with your money, donate with your time, your vision, your guidance, and your experience. He offered everyone to join him in a future trip, and I know that multiple people in the room will take him up on that offer. It was a reminder that the divide between those who have and those that need is getting bigger and more severe every day. Dick told us of girls he had helped when they were young just to eat and learn who are now graduating from top universities with careers in medicine and other fields that can give back. It was a reminder that this gesture by a few people in Austin, or anywhere, can change lives. It was a reminder that we have to do a lot more.

The words from Dick (mind you, he’ll immediately state that he doesn’t inspire, merely helps people tap into the good that is already there) encouraged others to add their own donations. My personal donation of $1,000 started an avalanche of giving – by the time we sent them the FedEx the sales team’s additional donations, Brett Hurt’s donations, other executives’ donations, and Bazaarvoice’s totaled over $5,250, a sum that the Grace Family Foundation will use to do far more good than what we’d think it can.

Check out the Foundation’s website and tap into what you’ve got to give. As Dick said, it isn’t just money – time, guidance, vision – all help. It matters.

Happy Holidays from Bazaarvoice Sales.

One of the Market Developers, Jeff Shoemaker, on our US Retail team sent me a link to something he knew I'd love.  He knows I'm a gadget guy and truly enjoy the insane cutting edge technology that gets released daily.  He knew I read Engadget, Joystiq, Dvice, Uncrate, XBOX360 Fanboy, PS3 Fanboy, and a few others religiously.  He knew I'd spend some hard earned cash on things that others might find to be a bit much.  So he knew I'd love a new product from Denon, the AKDL1 Dedicated Link Cable. 

What is it?  For a cable you'd expect $500 to get you something amazing.  This is a five foot long Ethernet cable.  Generally available for free from your IT guy or maybe $2 on numerous sites.  Now your true audiophile friends will weigh in here and say "$500 for a cable isn't that much, I spent $14,000 on bi-wiring my one ton Kharma Exquisites."  Oxygen-free copper and multi-layer wrapping is just the beginning – Wikipedia says that exotic materials like silver and "long crystal" or high-purity copper will get the best possible frequency response.  Right.  Of course that same article will go on to say that digital signals get an even hotter debate because of the "its on or off" argument around digital signals.  Yes, the Wikipedia article also says that SP/DIF signals transmit just the same over a coat hanger as they do ultra-high end cables.  Wild.

So I went to check out the 238 reviews on Amazon per the link that Jeff sent me.  With reviews titled "It Gets Me Closer To The Lord" and "Schroedingers Catbox" I knew I was in for a treat.  Some of my favorite excerpts:

• "A caution to people buying these: if you do not follow the "directional markings" on the cables, your music will play backwards. Please check that before mentioning it in your reviews."
• "I couldn't fit the dang thing in my computer. After about two hours of mulling it over I finally was able to figure out that this thing could be rotated 180 degrees and fit into the slot like a dream. I tried some cruddy $10 dollar Ethernet cord from Radio Shack, and even the 'click' upon inserting it into the slot sounded better."
• "At last! The quandary regarding the Copenhagen interpretation of quantum mechanics being applied to everyday objects is resolved. On behalf of the human race, I say "thank you, Denon".  To achieve said results, simply both purchase and not purchase the cable. It should also be noted that reading this review it will influence the outcome."
• "I'd note that "there is a sucker born every minute" but clearly Denon knows this. IMO their target customer would buy a Ferrari to use the door latch as a bottle opener."
• "There are holes in my ears where the hearing-stuff used to be, but it doesn't matter. Thanks to Denon, my aural drive has been completely satiated and I can live out the rest of my years in silent remembrance of the true dedication of these (I have twelve) link cables."

Clearly the internet snarkiness is getting the best of this product.  Why?  Because people aren't buying that an ethernet cable needs to cost $500.  Audiophiles will absolutely spend insane amounts on their true love.  Just like golfers will spend $500 on a new driver, every year, and driving enthusiasts will spend $100,000 on a car they love, and hardcore PC gamers will spend $1,000 on the latest video card.  But when they smell something that is just insane, they'll comment on it.  Bigtime.

What's the opportunity for Denon here?  They could respond to the community with the reasoning behind their pricing for that cable.  There are guaranteed some specs here that caused their marketing department to price a cable at that end of the spectrum.  They could also change the pricing on the product based on market feedback – and earn some customer loyalty points when it comes to future product consideration.  No matter what, the reviewers spoke passionately about what they think of this product.  I'm off to try that Ferrari bottle opener