The focus of my presentation was on user-generated content (UGC), and how to measure social initiatives. As you are aware, Bazaarvoice provides social commerce solutions to a variety of organizations across many different industries. The hypothesis for engaging in social commerce is to get more visitors to the site, have them convert at a higher rate, spend more money, increase brand engagement, and return their products less frequently. But don’t stop there. It’s important to look beyond your hypothesis to determine the total impact of your assumptions (allowing you to both secure and defend your budget).

So where are the other areas of impact for UGC? Customer satisfaction is one. During his keynote at eTail in Phoenix last week, Larry Freed, President and CEO of Foresee Results, discussed the importance of measuring customer satisfaction. His hypothesis was that satisfaction drives conversion. This makes sense. Happy customers are more likely to buy your products. So how do you create a happy customer? By providing them the information they want, when they want it, and where they want it. According to Neilson Online, shoppers are demanding UGC as part of their shopping experience; 81 percent of online shoppers read online customer reviews over the holidays. If you give them the chance to read peer reviews, you have met their expectations. They will be happy. And, as Larry points out, if they are happy, they will be more likely to buy your products.

Let’s expand the hypothesis further. Are consumers in the store just as hungry for UGC as online shoppers? The answer is yes. The Web is a great mechanism for research and has a direct impact on in-store sales. According to BIGresearch, 92.5 percent of adults said they regularly or occasionally research products online before buying them in the store. Furthermore, eMarketer reports that for every $1 in online sales, the Internet influenced $3.45 of store sales.

So how do you marry the ease of research online and the demand for peer reviews with the comfort of purchasing in the store? Through mobile applications. Though in its infancy (according to ForeSee, only 29 percent of consumers have used their mobile device as part of their shopping experience), consumers are increasingly turning to their mobile phones to research products online while shopping in the store. ForeSee reports that 15 percent of surveyed shoppers used their mobile devices to go online to check product reviews. This is not insignificant, seeing that the number of smart phones is growing exponentially, and demand for UGC is over 80 percent. This is why Bazaarvoice recently launched MobileVoice; a solution that allows consumers to read peer reviews through their mobile devices.

But MobileVoice isn’t solely for the benefit of the consumer. As Joyce Hrinya, Senior Vice President of Marketing and Customer Service at Helzberg shared with me, Helzberg is excited to have their associates use MobileVoice in the store. The associate can share their expertise of a product and inject UGC from their mobile device to drive more sales for a better shopping experience, without the infrastructure costs associated with many POS terminals.

Helzberg is a great example of the proper way to continuously collect, measure, and analyze visitor behavioral data for the purpose of optimizing their business and their brand.

Although sales saw a sharp overall decline in 2008, traffic held. Right now, consumer spending is driving the economy, creating a hyper-competitive environment in which only the strong survive – an example of accelerated Darwinism.

“Cutting costs is kind of like a death march,” Freed said. “Price is important, but experience is just as important.” ForeSee asked customers an interactive question: How satisfied were they with holiday sales in 2008? The answers were mostly positive, rating between 7-9.

Measuring satisfaction is crucial because the consumer’s satisfaction drives conversion, as well as freedom of choice. ForeSee Results found that the old metrics are no longer relevant: Consumer satisfaction is everything when it comes to a company’s future success. Freed suggested an important equation:

Satisfaction = [What the customer expects] + [What the customer gets]

Highly satisfied customers were more likely to purchase online than offline.

Satisfaction is driven by a combination of content, functionality, merchandise, and price, according to ForeSee Results. eCommerce as a percentage of total retail sales has seen a significant uptrend, Freed said. According to a University of Michigan study, eRetail amongst buyers, at 82 percent, outperforms offline retail at 75.2 percent. During the holiday season, discounts improved customer satisfaction ratings. Some of the most successful companies in this area were Bazaarvoice clients QVC, Walmart, and L.L.Bean.

So how can businesses optimize customer satisfaction? “We will see more retail casualties,” Freed said. “Retailers are going to need [social media] in the future to stay competitive.” Online channels have more opportunities than offline: Ninety-two percent of consumers said that they had been influenced by user-generated product reviews, while 65 percent said their purchasing decisions were influenced by social media.

Mobile media usage in stores is low at 29 percent, but growing rapidly. While only 31 percent of consumers said they had used a mobile app for in-store shopping before, the results proved social media had a very high impact within the ranks of its users. Seventy-two percent used their mobile device to ask someone about a product, 40 percent to send a picture to someone, 24 percent to comparison shop, and 15 percent to look at product reviews

Most companies said that they did not have mobile apps for their retail companies, although 17 percent said “Yes” and 16 percent said they soon would.

“We are in the fight of our lives,” Freed said. “Now is the time to rise above the competition.” Satisfying customers is the key to victory. Will your company rank amongst the winners?

Points to Remember:

1. The consumer is in charge: Costs of switching vendors are low, the competition is high, and knowledge is power

2. Consumer expectations for the Web continue to rise when it comes to social media: Make sure your company doesn’t end up playing catch-up to its competition

3. Customers want free shipping, consumer reviews

4. Your most valuable acquisition sources: Consumer familiarity with your brand, campaign emails

5. Social media. Enough said.

6. Consumers will go where they’re satisfied

7. Satisfaction drives conversion, loyalty, and word of mouth

8. Measure what matters most – your customers. Satisfied consumers are an asset, while unsatisfied ones are a liability

9. You cannot manage what you can’t measure: “UGC is a must-have in today’s world”

10. Garbage in/garbage out: Measurements must be accurate, precise and reliable – Web analytics must be implemented properly

We’ve come up with the first set of ideas printed on these ribbons, many of them below. Now it’s your turn. Below you can vote or come up with a new idea. We will print new ribbons at an upcoming show…and if your idea or choice gets voted towards the top, we’ll have your ribbon waiting for you.

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