The introduction of the online customer review system on Amazon.com more than seven years ago marked the ascension of the consumer as purchase influencer. This trend has continued, with social media and Web 2.0 tools enabling more buyers to speak out and be heard.
Today it can be argued that a consumer-initiated recommendation for a product or service has perhaps even greater impact on influencing sales than a professional review. To this end, a recent survey by consumer feedback network Bizrate revealed 59 percent of users consider customer reviews to be more valuable than those from experts.
The rise of the consumer as purchase influencer is further reinforced by a JupiterResearch study in which 77 percent of online shoppers indicated that they rely on consumer-initiated reviews and ratings. Consumers who used to look to Oprah’s Book Club or the New York Times‘ Best Sellers List are now able, with a few mouse clicks, to tap into the wisdom of the crowd made up of consumers who are “just like them” to inform their purchasing decisions.
Reaching Consumers Online
A simple Web engine search for “consumer reviews” returned more than 1.5 million results, with Web sites like PissedConsumer.com, Buzzillions.com and My3Cents.com at the top of listings on the first page. This proliferation of online sites dedicated to consumer feedback, discussion forums and blogs offers consumers easy access to information on a company’s products. These Web sites also present a ready platform for consumers to express their pleasure — or displeasure — with a company’s product or service, which can in turn affect public perceptions and, by extension, its corporate reputation.
The reality is that conversations about a company’s product and brand are taking place online regardless of the company’s participation. That being said, here are a few ways in which brand marketers can participate:
- Tap into consumer-initiated reviews and content for consumer insights.
- Leverage existing social networks to build relationships with key audiences.
- Develop an online user community to create an interactive dialog with existing customers and cultivate brand advocates.
Monitor, Listen and Engage
At the most rudimentary level, brand marketers first need to understand their brand/product perceptions and reputation among consumers and other purchase influencers such as bloggers, journalists and industry experts. This can be achieved through systematic monitoring of relevant online discussion forums, blogs, Web sites and newsgroups. This exercise not only helps marketers formulate an unfiltered view of their brand and product’s reputation, but also can serve as an early warning system for brand or product issues.
Information captured from the monitoring phase can also identify key influencers and allies as well as powerful venues in which to apply marketing communications resources.
For example, expert reviews are critical to sales in the highly competitive consumer electronics segment, but smaller manufacturers may not have the budget or distribution channel to garner a product review from well-known publications. However, they can even the playing field by identifying and cultivating relationships with non-traditional influencers such as bloggers relatively inexpensively.
To illustrate this point, a feature on critically acclaimed technology blogs such as TechCrunch, PaidContent.org or GigaOm can be just as effective (and sometimes even more so) in raising the buzz factor and profile for a technology start-up as a feature in a mainstream media outlet like The Wall Street Journal or BusinessWeek.
Also, by actively participating in consumer discussion forums and social communities that are discussing their product, brand marketers can gain insights into the user experience and purchasing motivations while also correcting any misperceptions that may exist about their product. Although somewhat time-intensive, this level of responsiveness has the substantial benefit of building trust between consumers and brand, which in turn takes the marketer one step closer to transforming consumers into brand advocates. For instance, a Carlson Marketing survey reported that 85 percent of consumers will recommend a company with which they have a trusted relationship.
Building Consumer Ties
A February 2007 BusinessWeek article entitled “The Latest Research Trend: Customers Behind the Wheel” chronicled the evolution of the “collaboration generation.” The article put forth the view that consumers, especially those who have grown up in the Internet era, are more likely to want to participate in the product creation process. A study sponsored by BusinessWeek for the article revealed that more than two-thirds of young people in the United States and Canada who were surveyed indicated that they were eager to help businesses design products and services.
It is vital for brand marketers to harness this trend by building closer ties with existing customers through a variety of social media tools. A corporate blog on the existing corporate Web site that invites participation by consumers can be an effective first step toward initiating a two-way communication channel.
Technology stalwarts such as Microsoft, Cisco Systems and Intel all offer online communities for technical users to converge and discuss feature releases and contribute ideas to the respective product roadmaps. The latest entrant to this arena is Dell. Its IdeaStorm community launched in February of this year and offers a slightly different take on the user community concept. With features that are similar to those found on the Web 2.0 news aggregator Digg, users can log in to share new product and feature ideas and vote on those contributed by their peers. This use of consumer feedback in product strategies not only fuels innovation; it also engenders customer loyalty and a sense of ownership. Additionally, through its sponsored community, a brand can be alerted to product issues almost immediately, which in turn allow it to calibrate an appropriate response swiftly.
Such multi-lateral communication among consumers, and between consumers and the brand within brand-sponsored communities, go a long way toward building customer loyalty. According to Bain & Co., for every 1 percent increase in customer loyalty, there is a 10 percent reduction in costs. Furthermore, research studies from Accenture indicate that customer loyalty accounts for 38 percent of margin and 40 percent of revenue growth.
Corporations that possess a genuine desire to communicate with and listen to their customers benefit from positive word-of-mouth and goodwill that can translate into top- and bottom-line gains. As part of this, brands that rise to the challenges and opportunities presented by the social media revolution and take a proactive stance will reap rewards over those who are still fighting it.
Bob Cramer is cofounder, CEO and chairman of social media solutions provider ThePort Network. He is also cofounder and chairman of A.D.A.M.Jacqui Chew is a social media strategist at ThePort Network.
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