January 21st, 2009 by Michael Osborne Chief Revenue Officer
Net Present Value (NPV) calculations are common in financial circles, but something I discuss with prospects all the time is how investments on their sites and in their customer communities can also follow this concept. The longer you wait, the more you’ll miss out on. Let’s take a look at the time value of reviews…
Assume a few things:
- You’ve got $10m in online sales annually.
- 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.
- You’ve got a conversion rate per session of 3% – meaning 3% of each session actually buys something.
- You’ve got an average order value of $100.
- You’re processing 100,000 orders per year, or on average 8,333 per month. Let’s smooth out the holiday spikes for now.
- 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:
- Reviews can raise conversion by 20% to 30%. Let’s assume 20%, so your new conversion rate would be 3.6% instead of 3%.
- Reviews can reduce returns by 10% to 20%. Let’s assume 10%, so your new return rate would be 18% instead of 20%.
- 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.
- For now, we’ll ignore the other benefits of having user generated content on your site.
Now to the benefits…
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September 24th, 2008 by Sam Decker Chief Marketing Officer
We didn’t invent the term “Social Commerce.” but we certainly have driven the visibility and clarified the meaning of the term over the past couple years. Unlike other “social” terms, the point of social commerce (and our company) is driving participation between your customers (social) in ways that drives real operational results (commerce). I wrote an article about the meaning of social commerce placed in eConsultancy and iMedia over a year ago.
So it’s natural that we are fanatic about measuring the real impact (in terms of P&L) of our solutions. In fact, we have over 40 case studies, and have published 21 of them (so far) to our web site. Many more are coming related to the impact of Ask & Answer, Stories, and international deployments of our social commerce solutions.
While these case studies are listed on our site, many have asked for them and may not have seen them. So, I thought you may find it useful to see the list here. We also have PDFs of these case studies if you’d like them. Just email info (at) bazaarvoice.com, or you can download them directly from the site. Also, check out our white papers and research.
- Customer reviews drive 196% increase in paid search revenue for Office Depot
- Reviews help Cars.com drive “intent to buy”
- Huge French retailer, Mistergooddeal, drives 40% conversion increase
- User-generated content drives sales for Zales
- Ratings & Reviews drive conversions for UK retailer
- Ratings and reviews increase time on site
- Reviews significantly reduce return rates
- Paradox of choice
- Customer review content in email marketing drives sales
- SearchVoice Reviews quickly increases natural search traffic
- SearchVoice Reviews drives organic customer acquisition
- Use Net Promoters scores to identify solid influencers
- Photo reviews drive conversion, enhance customer experience
- “Sort by Rating” option drives conversion for Golfsmith
- “Customer Favorite” categories drives sales
- Social navigation drives sales at PETCO.com
- Omniture/Bazaarvoice help major online retailer uncover results
- The Answer Den drives orders, traffic, and sales results for PETCO.com
- Ask & Answer attracts new users, increases conversion
- Ask & Answer™ decreases product-related support costs
- philosophy drives new site traffic with Mother’s Day campaign using Bazaarvoice Stories
Net Present Value (NPV) calculations are common in financial circles, but something I discuss with prospects all the time is how investments on their sites and in their customer communities can also follow this concept. The longer you wait, the more you’ll miss out on. Let’s take a look at the time value of reviews…
