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Today’s consumer is inundated with advertising. It’s so ubiquitous, it becomes ignored. What’s more, 75% of people don’t believe that companies tell the truth in advertisements, according to Yankelovich, a consumer research company.
So, who can speak for a brand and have a real impact?
Customers, in their own words.
Word of mouth was the “original” advertising, taking place in ancient markets, long before Madison Avenue took over. To find the best new products, early “consumers” would ask a neighbor or a trusted friend.
Today, as more consumers turn to the Internet to research and buy products, word of mouth takes its place as the best way to spread the word online. According to a 2007 global Nielsen survey, consumer recommendations are the most credible form of advertising, cited by 78% of the study’s respondents. In 2006, Time magazine named “You” the person of the year, as the magazine considers persons who contributed to the online conversation via Web 2.0 extremely influential. If anything, the influence of bloggers, “citizen journalists” – those “regular people” who contribute information and viewpoints to large news/media outlets via the Internet – and everyone who has a profile on a social network has increased since 2006. And there’s no end in sight.
User-generated content – defined as information generated not by a business or media outlet, but by a user of such online assets – drives Web 2.0. When businesses enable customers – or users – to write reviews, ask or answer questions from the community, or share experiences, they create conversations that become the most powerful form of marketing - word of mouth marketing.
Consumers use all types of tools when shopping or researching a product or considering a purchase. With a wide variety of retail outlets – from discounters to warehouse clubs to specialty stores – there is no such thing as a “one stop shop.” Add online outlets to the mix, and consumers can choose to spend their purchasing dollars almost anywhere.
What’s more, consumers don’t have to rely on a salesperson at a store to provide information. They can read about tests conducted by expert reviewers, get product specifics from the manufacturer, and get reviews and real-world experiences from consumers like them. The Internet makes this all possible, and yet many consumers ultimately walk into a store to make their actual purchase. Consider these statistics:
- 92.5% of adults said they regularly or occasionally research products online before buying them in a store (BIGresearch)
- 77% of online shoppers use reviews and ratings when purchasing (JupiterResearch, August 2006)
- 76% of online shoppers say that content is insufficient to complete research or purchase online (e-Tailing Group, January 2008)
- 72% abandon the site to go to a competitor or research further online (e-Tailing Group, January 2008)
With so much research and shopping taking place online, manufacturers must make their brands stand out. And while providing product information, technical specifications and “where to buy” information is important, it does not allow a specific brand – much less a specific product – to stand apart from others.
In today’s marketplace, reviews are not just something that is “nice to have”; shoppers have come to expect them. Most major retail sites allow customers to post and read reviews, and products that have more reviews, in general, sell better and are returned less often. For products to compete, they need as many reviews – positive or negative – as possible. Manufacturers who help generate user reviews will incrementally drive more sales on retailer sites.
As manufacturers strive to differentiate their brands among the shelves – and web pages – of retailers, user-generated content in the form of ratings and reviews can help brands rise above the noise of traditional advertising, and allow real users of their products to speak on their behalf. The key? Actively generate customer reviews, then populate retailer sites with as much user-generated content as possible.
In effect, user-generated content helps increase the overall attention and content a manufacturer’s product can get online. Using user-generated content to do this also means that a manufacturer is not required to pay for additional advertising space to the retailer. Studies show that more customer reviews translate to more sales. Marketing Experiments Journal tested product conversion with and without product ratings by customers. They found that conversion nearly doubled, going from .44% to 1.04%, after the same product displayed a five-star rating.
What’s more, a study conducted by seed retailer Burpee concluded that conversion rates are higher on products with less than perfect reviews (less than 5 stars) than those without reviews at all, indicating that the customer feels that the product has been properly vetted by other customers – also indicating that negative reviews aren’t such a terrible thing.
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