How the consumer has become judge and jury
Interesting piece on how customer reviews online are shaping brand's reputations and influencing shopper behaviour. What the article doesn't mention is the emerging role of Key Influencers, and how effective campaigns can be built around them to create a positive reputation amongst their community of followers. This is what Neon did successfully for the launch of Sanyo Xacti's Waterproof camcorder! Check out www.xacti-passion.com
User-generated content has permeated every marketing channel, with customer reviews now the main form of interaction between high-income consumers and retailers, according to recent US research by Forrester.
Many consumers are using customer reviews to get their views heard by the brand and their peers. Reviews can have a direct impact on sales because they can help consumers make purchase decisions, while also providing insight that helps brands improve the product or service on offer.
This year, online retailer Ocado has launched a review section on its website, allowing customers to rate everything from washing powder to bananas, because “brand control is now in the hands of consumers”, according to Jon Rudoe, head of retail at Ocado.
“Ten years ago, 90% of what was said about your product or service was said by you and broadcast out to people,” he says. “Now, 90% of what is said about your product or service is said by your customers and is, to a certain extent, not controlled by you.”
Customer reviews are now routinely found on both branded and independent sites as well as on Twitter feeds. The positive reviews are being used on traditional marketing material such as promotional posters and in-store signage, demonstrating that a customer endorsement is now an important advertising tool.
Brands recognise that customer reviews and recommendations are one of the most important factors when deciding which brand to purchase, says Patti Freeman Evans, vice-president and research director at Forrester. Indeed, 54% of people in a European survey by Forrester claim that what others say about a brand directly effects what they put in their shopping basket.
Freeman Evans says: “Consumers highly value the opinion of their peers. Along with price and basic product information, product reviews are the next most important piece of information for consumers.”
The content in the reviews is often very relevant, she adds. “Consumers feel that the reviewer is a person who ‘is like me’. It’s the kind of thing that the seller can’t usually provide in a way that’s credible.”
Tanya Kelly, global marketing director at Direct Wines, parent company of Laithwaites, says the customer review section on Laithwaites’ website helps it highlight the most popular wines available to buy.
She says: “We’ve always taken account of customer reviews through the traditional direct mail method, but online is an ideal medium for us to be more proactive around because it’s more user-friendly.”
Kelly also uses Twitter to publicise all five-star reviews posted to the site. “Customers want to know what other customers are buying and what’s popular. By being able to put our five-star reviews on Twitter, we’ve got something useful and helpful to say to customers.”
Another benefit of customer reviews for online-only brands is that it adds value to the offer that currently can’t be replicated in bricks-and-mortar stores. Ocado’s Rudoe explains: “When we look at our [online] shop, we say we need to be as good, if not better, than the [bricks-and-mortar] supermarket in every dimension in which the customer engages with us.”
“In a supermarket, you walk to the shelf and wonder how good a product is. Short of finding a customer who is also putting that product in their basket and asking them that question, there’s no way of answering it. It’s pretty difficult to answer in the physical context. That’s an area where online has a big advantage because we can share that information.”
But not all reviews endorse the brand. Some US hoteliers are taking legal action against TripAdvisor, claiming that negative reviews on the site are damaging business (see below). Rudoe says the business recognises that not all reviews will be positive, so it has a system in place that is fair to the customer and the company.
Ocado waits for a second review before putting up a one-star review. “That’s just to protect us because if it’s one review of one product, you don’t know who has written that review and because you can’t necessarily trace it you start to worry whether it’s a competitor,” explains Rudoe.
Kelly at Direct Wines adds that the benefit of customer reviews outweigh the downsides. She says: “In the past we did worry about negative reviews, but we realised that it’s much better to know what people like and don’t like. If the wine is poor quality, there’s no question that it should be changed or replaced, but people’s tastes also differ. Some people just don’t like certain wines.”
Direct Wines has a trigger on its system, so that if a wine gets a rating under three stars, an adviser will contact the reviewer to identify whether it’s a quality issue or a taste issue. “People often become most loyal if you respond to their issue and turn around a problem for them,” adds Kelly.
Whatever the pitfalls of customer reviews, high street stores are looking at ways to offer them in store. New technologies such as QR codes, which are barcodes readable by enabled mobile phones, could be a way for stores to provide more data to customers, including reviews available at the point of sale.
In the US, big-name brands such as Sephora, Gap and Best Buy have been offering shoppers the opportunity to access customer reviews at the point of purchase via QR codes.
Brett Hurt, founder and chief executive of Bazaarvoice – which provides user-generated content features like ratings and reviews to retailer sites – says technological developments are bringing the online and offline worlds together.
He explains: “This brings a layer of on-demand information services to the real world that customers can instantly access through their smartphones when and where they want it. For example, pointing your handset at a street of restaurants and finding positive reviews and food images while on the move.”
It is not yet known how successful QR codes will be in driving sales because there’s not a lot of data to show how effective they are, cautions Freeman Evans at Forrester.
But it appears that facilitating customer reviews is becoming a chosen option for online and offline brands, as they strive to demonstrate that customers are now in control of their business.