By adaptive - December 2nd, 2011
Ratings and reviews have always played an essential role in the buying decision, even more so within the social space. However, do reviews have a commercial component, and can corporations actually...
Ratings and reviews have always played an essential role in the buying decision, even more so within the social space. However, do reviews have a commercial component, and can corporations actually measure their value?
Social shopping – effectively relying on other people’s views and experiences – is something that has been brewing for a long time. Amazon started putting reviews on its websites internationally years ago and its sales are impressive.
One caveat worth mentioning before even thinking about incorporating reviews in your site, or overhauling your existing review network, is that there appear to be very few metrics that can definitively demonstrate the value of a review on a site. Nobody we spoke to for this article could think of a good thing to say about taking peer reviews off a site because nobody can know what the sales would have been like in their absence.
When social feedback proves business metrics wrong
Let’s start with an anecdote. A few years ago QVC was selling an ice cream maker. This appeared to be flying off the shelves and the company thought it must be excellent as there were no product returns. It was poised to re-order stock when the results from Twitter and other peer reviews came into its agency, which fed the findings back immediately.
It became clear very quickly that the ice cream maker was in actual fact a very poor product that didn’t work, but which was so cheap, customers couldn’t be bothered to return it. They just went onto the social media and moaned after throwing the machine away. The criticism about why a reputable company would stock such a thing had already started. By paying attention to the reviews the company was able to avoid a costly reorder of a product they have falsely believed to be a bestseller, but that all the standard business metrics would have shown the product was a rousing success.
Reviews and recommendations
It’s worth stressing that reviews are only one element of brand interaction – as with all social media they aren’t a business panacea. Geoff Parker, client services director at Click Consult, points to examples in which reviews can be counterintuitive to the general perception of a brand: “There is a strong relationship between the size of the company, strength of brand, the quality of the customer service, and in turn the quality of the reviews,” he says. “For example, Ikea are a global company with a very strong brand identity, but there are some very negative reviews made online about their company.” He points to review site Reviewcentre by way of evidence and it’s true, there is hostile comment – likewise he points to Tesco reviews on the same network which are equally negative. “These reviews won’t mean I will stop shopping at Tesco,” he comments.
So if that sort of coverage doesn’t persuade people not to shop in the reviewed premises, what’s the point? Jay Hallberg is VP of marketing at Spiceworks, an agency in the US which runs campaigns for hundreds of IT clients, which include Cisco, HP and other big names as well as smaller start-ups. “About four years ago we were running ads in an application and people didn’t care for it, so they wanted to vent about it. In that interaction we realized users didn’t have the capability to rate ads, and we thought this could be useful information to have beyond the click-through rate.” This ability to take ratings back to the ad agencies and their clients put the viewer at the centre of social media – click-throughs were one thing but if an ad was getting two stars then presumably it could be working harder. ”People have changed advertisements as a result – ever since then we’ve shared that data with the advertisers.”
This means cultural change. “People moved from having conversations without data to being better informed. There was a little digestion period but we’ve been able to counsel more and more with agencies and brands on what works best – we’ve turned into a trusted advisor.” Generally he finds the smaller the agency the more likely they are to take the input – which offers further opportunities for smaller businesses to move their brands on quickly.
Many agencies and other social media stakeholders agree. Anton Gething, director of mobile agency nToklo, set up business-to-business review content for retailers specifically so that personalized and relevant integration could take place. “Reviews are becoming more and more important,” he says. It’s a move away from the relationship someone would traditionally have had with a brand. “That would traditionally have been a one-to-one relationship and it’s evolving to become more interactive and more useful – things like reviews, comparisons, and sites like Kelkoo – there are a number of value adds that come into a virtual relationship.”
Crucially, he says, users have become increasingly comfortable with these changes and it’s altered the view of the traditional purchase funnel, he says, in which there is a willingness, consideration, opinion, preference and purchase. “Now the landscape of the virtual relationship needs to provide this decision making real estate, and reviews, recommendations and the confidence they add have become a major part of it.”
Don’t expect definitive business metrics just yet. You’ll never prove how much you would have sold without reviews and recommendations on your site. Certainly at the rollout of social media at Charles Schwab banking it appeared that referrals drove 40% of new business, and the success of review-based businesses like Kaboodle.com and ThisNext.com suggest that the review tab is going to remain a vital part of social business.
But then it has been since Amazon started publishing reviews and making recommendations based on profiling the reviewers and their peers – and that was in the last century. Intangible purchases like holidays have also come under the review awning – there are people who won’t actually go on holiday until they’ve checked reviews on Tripadvisor.
Facebook’s removal of the review tab looks increasingly curious as a result of all of this. The company may know something the rest of us don’t. For the moment, the smart money is on keeping reviews lively and watching them drive business to any business that uses them.
For more best practice and insight on how to use social media to drive sales, then have a look at the Corporate Social Commerce Summit, taking place in Boston on April 16-17. More details at www.usefulsocialmedia.com/socialcommerce