As Brett posted earlier, this week we passed the 100 billion mark, meaning we have served over 100 billion impressions of social commerce content (questions & answers, reviews and stories).

So what does that mean to you, as a marketer?

1. It means that hundreds of millions of people worldwide have made better purchase decisions (including you).
2. It means that hundreds of retailers and manufacturers are getting “Customer Oxygen” into their company, transforming the way they do business.
3. It is evidence that markets truly are conversations (See chapter 4 of Cluetrain Manifesto and the meaning of "Bazaarvoice").
4. It means that this is just the beginning. The customer content “flywheel” is now turning at full speed and we will continue to innovate with our clients to keep up.
5. It means that if you haven’t started yet, you have less to fear from facilitating customer conversations than ever.
6. It means there is an ecosystem of relevant product and service conversations across the web, which can amplify the voice of your customer.
7. It means that you will see more search results come from product-related customer content.
8. It’s evidence that customers are more likely to read this type of content than other ‘community’ content that is not relevant to shopping.
9. It means that social commerce is a scalable marketing strategy, proven by over 750 brands.
10. It means that you now have a reason to champion the voice of your customer to senior executives.

This is an inflection point, and just one data point that pales in comparison to the transformation occurring inside our clients' businesses. Which, in the end, is making products and services better. Which makes me proud to bring the customer voice to market!

Improving your offering

The most obvious positive potential in negative reviews is the opportunity for your company to improve its products and services. Customer feedback helps companies discover weaknesses in their offering, and act on them to deliver a better customer experience.

Oriental Trading Company uses information gathered in negative reviews to work with manufacturers to improve hundreds of their toys and party supplies. This proactive quality management allows the company to discover and fix quality issues much earlier in the production process, saving the company the expense of excess inventory of faulty products after an item is introduced.

QVC uses negative reviews to take action on products and customer service and delivery issues, often by reaching out to directly customers. For example, when they recently discovered that a product had issues with quality and delivery, they contacted 900 customers with an offer to replace the product. They worked with the vendor to return the remaining product inventory and improve it. Internally, QVC executives hold monthly meetings to discuss all aspects of customer feedback to determine areas the company should emphasize and improve.

Building trust in your brand

The mere presence of negative feedback on your site builds transparency in your brand. Customers see that your online community hasn’t been white-washed with rose-tinted marketing speak. And taking this feedback a step further – listening to and acting on the opinions of dissatisfied customers – can build invaluable customer trust in your brand.

QVC took this step further to let customers know exactly what they do about poorly-reviewed products. In an online blog post by their Senior Vice President of Customer Service, Dan McDermott, the retailer detailed their process of low-rated product examination, improvement, and in some cases, elimination. Negative reviews are “how we learn and bring you products you want,” the email said.

Acting on negative feedback proves to your customers that you are listening – which is often all they really want. Ignoring your dissatisfied customers can be disastrous for your brand, especially with the presence of so many outlets for customers to voice their dissatisfaction. See the #amazonFAIL Twitter-storm fiasco as an extreme illustration of what can happen when your customers feel your brand isn’t listening.

If your customers have negative feedback, they will find a way to share it – whether you allow them to do so on your site or not. Plugging your ears and pretending you can’t hear it won’t make your customers’ dissatisfaction go away. Embrace negative feedback as an opportunity to improve your offering and build trust in your company, and you’ll find that “bad” reviews can be great for your brand.

If you're working for the pointy-haired boss, run away as fast as you can!

TurboTax is undoubtedly one of Bazaarvoice’s most innovative clients.  Not only do they do a fantastic job of acquiring user-generated content, they’re also constantly discovering new and creative ways to leverage the content they’ve collected.  They recently launched a national campaign promoting Ratings & Reviews in brick and mortar stores, using our new MobileVoice product.  This allows in-store shoppers to read reviews of TurboTax software on their cell phones.

Before the Super Bowl kicks off on Sunday, TurboTax is kicking off an amazing event of their own.  They’ve launched a groundbreaking interactive banner that uses review quotes and photos submitted by reviewers as part of a larger Super Bowl campaign.  This ad was front and center on Yahoo!'s home page until midnight last night, and you can see it archived here.  Take a look (be sure to click the “click here for full experience” link).  You have to see it to believe it!

 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…

Of course, if you aren't leveraging the power of customer contributiosn right now, this news comes a little too late for this holiday season. However, it's never too late. The impact of user generated content is the gift that keeps on giving throughout the entire year! Get started just after the holidays.

In general, the study found, millionaires value time as much as they value money – the biggest misconception people have about the wealthy is that they are idle. Instead, when they shop, they devour as much information as they can to make the best purchasing decision so they don’t waste time on the “wrong” products.

Their lack of time means they usually use the Internet. High-end stores spend a lot of money to create a great in-store experience, but 94% of the millionaires polled said they made a luxury purchase online in the past six months, and 56% of them actually prefer shopping online to shopping in a store.

They also rely strongly on the Internet when deciding what to buy: those polled said the Internet is the leading influence, with 82% of respondents saying they use it. Word-of-mouth comes in second, with 78%, and magazines next, at 68%.

Millionaires read online reviews: just over 90% of millionaires say they always or often read other customers' reviews online, in their quest for the “real” story about products. Compare this higher stat to Jupiter and Forrester studies which report just over 70% of average consumers seek reviews before buying.

In short, millionaires shop and compare for several of traits while shopping, so it’s critical that luxury retailers include as much product information as possible online. Customer-generated reviews and Q&A enhance this, and is trusted among the very wealthy.

This research is especially interesting as we hear from more and more luxury brands who are initially reticent about sharing customer reviews online. We have helped several luxury retailers go live with reviews and seen their customers enthusiastically rave about their quality products, helps underscore the importance of customer input – no matter what type of customer you’re trying to attract.

This year we conducted similar research with Keller Fay in the UK. We found – believe it or not – similar results! We conducted a post-review intercept survey across several Bazaarvoice retail clients and found that Brits are driven by altruism when they write product reviews. We surveyed almost 3,800 Brits who wrote reviews on online e-commerce sites, and 94% of them said it was important to write reviews to help other consumers make good purchase decisions.

And their altruism doesn’t end with consumers; 82% of those surveyed said they wrote reviews to help companies make better decisions about the products they offer.

Also, most UK reviews are positive – 86% of UK reviewers said they left positive feedback online, and 11% said their comments were equally split between positive and negative. This reflects what we continue to find in the ratings J-Curve, which we discovered in 2006.

> See the press release here

> Download the full study results here