E-commerce: Roll Out the Red Carpet

Opening your site to customer involvement

June 2007 By Molly Joss

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The idea that word of mouth helps sell products and services isn’t new. Asking a neighbor, friend or colleague how they like their new car or new wireless service provider is standard party or office cooler conversation. But as the online environment enters a new phase of maturity in the consumer’s life (some call it Web 2.0 or even 3.0), marketers have learned that they can leverage this social connectivity to enhance their audience’s experience, glean consumer feedback and even boost sales.

Although customer reviews and comments have been appearing on some Web sites for as long as eight years, consumer-generated content still is not something every online merchant has incorporated into its Web strategy, says Ken Burke, CEO of MarketLive, an e-commerce software and consulting firm in Petaluma, Calif. One of the biggest reasons why merchants haven’t opened their sites to customer involvement is uncertainty about how to manage the flow of comments. James Belcher, senior analyst at eMarketer, a New York City market research and trend analysis firm that covers online marketing and e-commerce, characterizes this unease as wariness toward ceding control—or at least concern regarding how customer involvement might affect carefully honed marketing messages. Corporate apprehension may not be entirely misplaced, Belcher states, and he cautions merchants to “think it through before they throw the doors wide open.” The best results come from making customer interaction part of an overall marketing strategy. “Decide what you want to accomplish and what is possible and then start off on a test basis,” Belcher says.

Reviews and comments are the most common forms of customer involvement, but the gamut of methods includes polls, contests that invite participation, blogs, and even pictures and video. Garrick Schmitt, vice president of user experience at Seattle-based interactive marketing agency Avenue A|Razorfish, says the overall goal is to increase customer engagement and to foster a community that is passionate about your product or company. Methods that facilitate communication between companies and customers work better than one-way communication, he adds. One example of two-way communication is a company blog in which writers responds to reader comments.



Interaction Benefits

According to eMarketer research from late 2006, adult Internet users rank sites with customer-generated advertising as more customer-friendly, creative and innovative than sites that feature only professional advertising and corporate-driven messaging.

That’s great for traffic-building goals, but what about sales? If you want to give online shoppers more reasons to buy from your site, then customer-generated reviews and comments can help facilitate the process. A Janaury 2007 Forrester Research study titled “How Damaging Are Negative Customer Reviews?” indicates that 76 percent of shoppers use online reviews to guide purchasing decisions. Since shoppers pay attention to online reviews and comments, it makes sense for companies to allow interaction on their sites and to use reviews and comments in their marketing, explains Brett Hurt, CEO of Bazaarvoice, a company that hosts user-generated content. He reports that Burpee Seeds, a Bazaarvoice customer, saw clickthroughs rise 43 percent when it put customer-generated product reviews in its RSS feed. What’s more, keeping customers on your site as much as possible during their shopping process makes good business sense, he counsels. “Don’t ask them to go elsewhere” for product comparison information, he explains, since they might not make their way back to your site when following through with their purchase.

Even negative reviews—one of marketers’ biggest fears when it comes to online comments—can work in your favor. “Negative reviews are a gift,” says Hurt. They can help companies spot problems with new products quickly, he explains, like an early warning system. Burke points out that these comments also can lend credibility to all the reviews on a site, which makes sense intuitively. If every review for a product was a glowing testimonial, you would suspect the marketer either faked this feedback or only posted the favorable consumer comments. Plus, a few middle-of-the-road critiques can increase your comfort level with your purchase decision because you feel as though you did due diligence.

Although it can give some merchants higher sales and happier customers, a site open to dialogue or comments isn’t appropriate for every product and company selling online, Burke warns. For example, he says, a company that sells high-end or designer apparel wouldn’t necessarily benefit from comments and reviews because the products might appeal to people with eclectic tastes, who are not likely to follow the beat of anyone else’s drum.



Potential Pitfalls

Although General Motors (GM) characterized a 2006 interactive online marketing project for its Chevy Tahoe SUV a success, other companies might see it as an online customer-interaction exercise that went horribly wrong. The carmaker launched a Web contest that allowed people to use digital video clips and sound tracks it had produced to write their own text and create their own digital ads for the car. During a single weekend, hundreds of people used this digital content to create and publish on the Web ads that claimed GM and the Tahoe contribute to global warming. Other ads contained sexually explicit messages or profanity. Many of these ads still are on the Web. Of course, most of the 30,000 contest participants sang praises of the Tahoe in their ads, which convinced GM and Campbell-Ewald, the agency behind the Web contest, that the benefits of consumer interaction online can outweigh the negatives.

Thinking ahead and having procedures in place to catch problems before they arise are must-haves for merchants considering any type of online customer interaction. Software or human filters that block inappropriate, profane or untrue posts are mandatory defenses. Schmitt suggests software filters that function automatically, which work well when there’s the potential for heavy interactive traffic on a site; sites with lower traffic volumes can use staff to manage the filtering process.

Other useful controls include requiring site visitors to register before they post or allowing users to report posts that they don’t find helpful. Marketers also should consider authorizing appropriate personnel to respond to comments or blog posts. As long as responses from company representatives don’t come across as defensive, they actually can foster a feeling of authentic, two-way communication.



Communication Costs

You either can host the consumer-generated content on your own site and manage it internally, or you can opt to work with a company that provides these services. The former option works for large companies that want total control over their site content and have sufficient resources to keep up with the workload. Emily Albright-Miller, senior strategist at Resource Interactive, a Web site development firm based in Columbus, Ohio, says that when marketers find it cost-prohibitive to handle this process on their own, they can turn to partners to provide part or all of the functionality.

Bazaarvoice is an example of such a partner. The company hosts and manages customer-generated reviews and provides clients with reports and statistics on this site activity. Pricing for services is based on several factors, including the amount of communication traffic on a site, but he says the lowest packages range $2,000 to $4,000 a month.

Burke notes that some merchants use PowerReviews, an online review service that is free to retail and brand sites. PowerReviews is a start-up company in Millbrae, Calif., that plans to use posted reviews from its merchant customers’ sites to populate its own online offering, establishing itself as a single-stop site for product reviews. To generate revenue, PowerReviews will sell advertising on its site.

Burke says that the review and comment functionality of soliciting online consumer feedback comes built-in with many retail site design contracts today. “The technology is a commodity,” he says, and does not provide the analytics and insight that marketers need to optimize their online review features. If marketers do not have this expertise in-house, they will want to plan for such support when assessing their technology options.



Integration and Management Are Key

Allowing consumer interaction online can improve a company’s image and increase sales, but only if the interaction is a carefully managed part of the overall marketing strategy. Plan carefully and choose appropriate communication avenues. Allow for testing and adjustments, but don’t fear a total loss of control. Customers are talking about companies online, so companies might as well make themselves part of the dialogue.



Molly Joss is a freelance writer.

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