barcamp talk: growing a business with online reviews

Growing A Business With Online Reviews

Filling In The Gaps

1.Online reviews2.???3.Profit

What this presentation covers

Number of years each channel took to reach a market audience of 50 million?

Radio: 38

Television: 13

Internet: 4

Souce: http://www.un.org/cyberschoolbus/briefing/technology/tech.pdf

87% of Australians have purchased something over the Internet. 53% of Australians made a purchase in the last month

Source: ACNielsen Global Online Shopping Habits Study

Source: Consumer survey, JC Williams Group, 2006

91% of survey respondents cited consumer content as the #1 aid to a buying decision

The crowd is building a new channel to drive their buying decisions

Customers can get advice from each other directly

For many businesses, your actions speak louder than your advertising

department

What Determines Reviews?

• Audience • Market• Product

Audience Factors

1.Education level (Selling to experts or businesses)

2.Enthusiasm (Customer word-of-mouth)

Market Factors

1.Long tail or emerging markets (Limited exposure from traditional media)

2.Commoditisation (Ease of comparison)3.Low barriers to entry4.Customer lock-in5.Market maturity (Ability to innovate)6.Lack of incumbents (Brand experience)

Product Factors

1.Product is sold in volume / Service is repeatable (Reviews are reliable)

2.Expense3.Upfront pricing4.Ongoing expenses5.Complementary products6.Information assymetry (Buyers know

more than sellers)

Hints For Small Business

Most Word Of Mouth Is Positive

80% of product ratings on the Bazaarvoice review site are 4 or 5 stars out of 5.

Source: “J Curve,” Bazaarvoice and Keller Fay

Small businesses usually don't have economies of scale, or well-established brands.  Differentiated on service? Good word of mouth is a cheap way to grow.

Online reviews magnify word of mouth... 10x, 100x, even 1000x

How Do You Encourage Reviews?

Got a store? Add a point of sale reminder

 Track how your customers find you:

Referrer logsCustomer surveys

Take Direct Action

• Contribute to an independent wiki page• Add customer testimonials and case

studies to your site• Track blog mentions and embed them as

an RSS feed• Start you own company blog 

How Do Reviews Fit Into Existing Channels?

Channel Independent Expert Comes To You

Based On Customer Experience

Direct Advertising

Indirect Advertising

Professional Reviews

Amateur Reviews

Crowdsourcing Is Powerful

Reviews from fellow consumers have greater influence than those by professionals.  

Source: comScore/The Kelsey Group, October 2007

What Makes A Good Customer Reference?

• Customers who are the most similar to you

• Case studies from impressive customers are not as valuable as case studies from happy, but typical customers

The internet lets your customers unionise against you

But they don't strike, they just go your competitors.

Future Of Review Sites?

• Hybrid of professional reviews and moderation atop amateur content?

• May not be entirely advertising supported. Can use referral fees or negotiate pooled funding from businesses

• Niche review sites run by enthusiasts will always have a place

Existing media voices and brands may extend their websites to provide online reviews of their own products, eg David

Jones, Vogue or Microsoft

Example Australian Review Sites

Review Space Site

General Reviews Yabble

Restaurants Eatability

Teachers Rate My Teacher

ISPs Whirlpool

Web Hosting Hosting Jury

Wikis Wiki Matrix

Employers Revyr

 Discussion Time

Presented in Sydney, AU on 15 Nov 08 by David SoulOriginally posted on david-soul.com