“What’s the best social media investment? Where we can really see a good ROI?”
The answer is easy. Getting companies to implement it is not. The most valuable and under-used social media strategy is embedding customer reviews in your Web site. Not blogs, Twitter, communities or tagging.
An eVoc Insights study found that 48% of consumers need to read reviews before making a purchase decision. Neilsen’s research has found that consumer recommendations are the most credible form of advertising among 78% of study participants.
What gives? Fear of having negative reviews on the company Web site. According to Sam Decker, CMO of BazaarVoice, companies have three options if they’re selling a bad product and are afraid of negative reviews:
- Without reviews, you keep selling the product and risk costly returns and low customer satisfaction
- With reviews, you can use the leading indicator of negative reviews and quickly remove this product from inventory to reduce returns and improve satisfaction
- Or, just allow the negative reviews to steer customers to a more satisfying purchase within the category. Let the best products win, and you will win.
“In cases 2 and 3 you remain a trusted editor of the best products; customers are happy; you maintain their loyalty, and avoid a return,” says Sam. For more on overcoming this obstacle, check out this classic article “Positives about Negative Product Reviews.”
Example: Consumer reviews on Panasonic.com
Good point, we often forget about reviews when we think of social media. Happy customers who write positive reviews are often the best sales people on your site.
Ratings and reviews are a great tool for retailers. BUT online ratings and reviews lie.
There are four key ways in which they can be dishonest, you can read about them here: ratings and reviews lie
I agree that reviews and ratings can be great, when trying to get customers to interact with a brand or product.
Great examples of the power of these are Ebay, Amazon & Apple’s iTunes store.
The reason they work for these companies, is that their ratings/reviews contain bad & good feedback – which is thus viewed as real and/or honest by site users.
As mentioned in this article, this is a vital component.
I would also suggest that some existing social media networks can act as review channels, as once again, the feedback is unmonitored and you have to have the fortitude to take what you get.
I agree review that ratings and reviews are useful. The comparison with Amazon and Apple may not be appropriate. I don’t think negative reviews on books hurt Amazon since people can choose other stuff.
However for companies that are selling their own branded products, it can be a challenge to find the right way to respond to negative reviews on their sites.
Great post! I couldn’t agree more.
“The product sells itself.” It’s a favorite line in the repertoire of many entrepreneurs. A product is so good, that customers talk it up to the extent their buzz generates more sales leads.
To this end, it surprises me just how few companies tap reviews as a marketing tactic to connect with customers. As social media gurus, Charlene Li and Josh Bernoff wrote in Groundswell, “…our survey show that 76 percent of customers use online reviews to help them make purchases…even though only 25 percent of ecommerce sites have ratings and reviews…”
Consumer pyschology both offline and online has always interested me. If you think to the basics of ‘marketing’ – word of mouth is one of the most powerful mediums (in both positive and negative contexts). Offline, we may turn to our trusted ‘influencers’;our friends, colleagues, family to offer advice when considering a purchase or service. And online the same ‘influencing’ factors exist. Research has identified that ‘testimonials’ and ‘case studies’ add ‘trust equity’ to a site. And now more than ever, when online businesses are more SEO savvy than ever – it’s not necessarily the best companies that get found. Customer reviews (provided they are transparent and provide both the positive and negative comments) are an effective way to draw in customers, build trust and encourage conversions. I’d like to see ‘search’ evolve to include such elements into ‘quality scores’ (think Ebay) – so that those that are performing well, providing great customer service are not only reliant upon customers to spread the word – but also search engines promote ‘quality’ service – too… A big call but hey… nothing’s impossible.