Network to Drive Revenue

Prepare your site for an explosion in online word-of-mouth sales

February 2006 By Ken Burke

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As positive a feature as product reviews are, in their simplest form they only support sales of the reviewed product. Amazon.com takes the product review paradigm further and adds some significant twists that introduce shoppers to new products. Each review includes a link to the reviewer’s other product reviews, and each review has its own “Add to Cart” button. This technique builds up a community of independent reviewers whose opinions will drive additional sales to Amazon and its partners as time passes.

Netflix (www.netflix.com), a pioneer in online DVD rental, goes further still and actively seeks to hook up individuals with similar tastes. Netflix “Friends” enables site users to create a list of other users with whom they can share comments about movies, ask for recommendations and reviews from others, as well as control who can access the information they post. Imagine the effect of hundreds and thousands of users all building connections with each other and promoting the product on their own. According to a January 2005 Internet Retailer article titled, “Where Everyone Becomes An Advertiser,” the Friends network has been growing by about 15 percent per day.

Some statistics from Europe reveal a good deal about the enthusiasm shown toward reviews of all kinds. According to the June/July 2005 edition of online newsletter Trendwatching.com (www.trendwatching.com/trends/twinsumer.htm), “Forrester Research found that in Europe, more than 50 percent of online consumer electronics buyers have checked product reviews from other customers, and that 30 percent of buyers have actually bought a product online based on someone else’s online rating. Fifteen percent have written a review themselves.”

Marketing Via Social Networking Sites

Web sites devoted to social networking are evolving to address the public’s thirst for product knowledge. The key is that they enable people with similar interests and values to find each other. Users actively seek out forums where their favorite topics are discussed. Many systems use collaborative filtering to match people with reviewers who have similar profiles, helping to ensure that each shopper reads reviews relevant to his interests.

Yub.com (www.yub.com), a property of Buy.com (www.buy.com), is a true marketing-oriented social networking site and an exciting prototype for this newest marketing channel. Its sole purpose is to gather consumers and get them talking about the products they buy, love and hate. And of course, it provides a convenient buy button.

Yub.com actually provides a monetary incentive for people to post their reviews. Any time a shopper buys something through a review, both the reviewer and the buyer get a coupon for a discount on future purchases. Coupons typically are for a discount between 2 percent to 5 percent. This directly drives sales to Buy.com partner stores, promotes customer loyalty and encourages further reviews.

Yub.com enables people to build their own online profiles, as do other social networking sites, with their basic demographic information. They can post news and comments about special products and deals they have discovered, driving others to buy and generating more discounts for themselves. Many users solicit product recommendations from others.

Though not true social networking sites, CNET Reviews (reviews.cnet.com) and Epinions.com (www.epinions.com) are morphing into such by adding tools that help users interact with each other. Their strength is in soliciting product reviews and organizing them online for easy browsing. Individual consumers can post reviews and, as with Amazon, the sites provide easy purchasing from the review page. Both sites provide reviewer profiles and enable other shoppers to comment on posted reviews.

Marketing sites like these show great value for niche marketers. They can reach people who actively search for information on niche products, introducing new buyers to niche specialists.

Prep for Success

In the long run, online social network marketing will affect virtually every online marketer. There was a time when BillyBob could tell a few friends about a great deal he got, but now his online alter-ego can tell millions. With this in mind, here are some tips to help you prepare for the inevitable influence of social network marketing.

* Scan shopping-oriented network sites. See what people talk about. See what they say about products related to yours. If your product categories show up on these sites, think about how you can capture these potential sales.

* Polish your product presentation. Make sure your product images are big and clear, and that the product page tells the whole story. Your product presentation and brand have to stand on their own, because someone coming directly to your product page from another site will not necessarily know anything else about your business.

* Find out what shoppers like and dislike about your products and services, through surveys and polls on your own site, and by looking for your products and company on networking sites. Act quickly to capitalize on the good and to remediate the bad.

* Build tools into your site that involve customers with your business, e.g., wishlists, tell-a-friend, customer comments, a star-based rating system, simple reviews.

* Consider an advanced review system, with profiles for reviewers and links to product detail pages.

* Build out your customer service section. Develop and post a comprehensive return policy, spell out your shipping terms and put a strict privacy policy in place. Concentrate on great customer service to avoid negative comments from the network.

* Join a few prominent marketing-oriented network sites as a partner to encourage visits and reviews from the network’s consumer members.

* If you’re a niche marketer, identify networking sites that tend to focus on areas related to your business.

A final word of caution: Reviewers can be ruthless. Poor customer service or product support are sure to generate a thumbs down from more than one reviewer. As these networking sites grow in popularity, merchants who do not measure up are sure to feel it.

Ken Burke is founder and CEO of MarketLive, an e-commerce technology and development company based in Petaluma, Calif. He can be reached at (707) 773-3434 or by e-mail at ken@mmlive.com.

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