Online reviews can increase business revenues by 40%

Online reviews can increase business revenues by 40%

Posted by Peter Mulhmann 19-Mar-14 17:17

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It’s no surprise that online reviews are having a significant impact on customer service, and ultimately the bottom line for businesses. The British Retail Consortium (BRC) said December 2013 was a record-breaking month for online shopping, with close to one in five of all non-food purchases made online. The report also found a 19.2 per cent growth in internet purchases compared with the same month in 2012, the fastest increase in four years.

As Nielsen’s Global Trust in Advertising report demonstrated, opinions posted by consumers online (both good and bad) are the most trusted form of advertising today. But how do we quantify this impact and better understand its value to the growing ecommerce economy?

At Trustpilot we wanted to investigate this further, so we partnered with renowned Cambridge University mathematician William Hartston, to develop a formula to calculate the economic impact of online reviews on UK businesses (see notes below). This was supplemented by a survey of over 2,000 UK consumers.

According to the formula, which takes into account the number of positive and negative reviews received by the average UK business, online reviews can increase business revenues by up to 40 per cent – a significant figure.

The consumer research also revealed some interesting insights into online shopping behaviour. A key finding is that 77 per cent of UK consumers using the internet will look towards online reviews before making their purchasing decision. British consumers are leaving their shopping fate in the hands of online reviewers, with 62 per cent claiming they’re more likely to do business with a company after reading a positive review and one in five spending at least 10 per cent more with that same company.

In contrast, the survey reveals that almost all British consumers (89 per cent) are influenced by negative reviews, with 78 per cent claiming it could deter them from making a purchase altogether. For those businesses looking to cash in from the growth in ecommerce, it takes on average just 3-4 online negative reviews before consumers (38 per cent) stop purchasing from a brand.

Retailers hesitant to find out what their customers will say should be not put off however, as the survey reiterated that it’s equally important for a company to respond to criticism - 15 per cent say they are actually more likely to do business with a company after reading a response to a negative review that was resolved.

We find that many retailers are reluctant to ask for reviews as they’re worried about what their customers might say, but the reality is that most serve a raft of satisfied customers. People accept that brands aren’t perfect, so negative reviews are to be expected – the acid test is how you handle them. To find out more about how to turn negative reviews into customers, check this post out.

These results are a sure sign that the old days of broadcasting engineered marketing messages at consumers doesn’t work. Today’s consumers believe in their fellow buyers and have the power – because of social media – to make or break a business. Our research highlights the significant impact that online reviews are having on purchasing decisions, and ultimately to the British economy, showing that customer service has to be an absolute priority for any business.

The fact that two in five have never written an online review, yet 77 per cent say online reviews help them make a purchasing decision shows that we need to encourage more people to share in their experiences, whether good or bad.

Consumers today have such a powerful voice to influence others online, so businesses need to encourage a two way conversation with their customers or they will be left behind. When a purchase decision comes down to a company with no reviews versus one with hundreds of people praising the customer service, it’s clear who will win – and this is a model that will only become more and more prevalent in the future.

Notes:

The survey was conducted in partnership with CensusWide of 2,000 adults throughout the UK who have made Internet purchases in the past year.

William Hartston has developed the online review formula:

V = 7.9 (.62P -.17N²+ .15R)

This gives V, which is the predicted percentage increase in revenue due to online reviews in terms of:

P = number of positive reviews

N = number of negative reviews

R = Number of satisfactorily resolved negative reviews

WHAT, WHEN, AND HOW TO SHARE ON SOCIAL MEDIA

WHEN IS THE BEST TIME OF DAY TO SHARE THAT HILARIOUS VIDEO TO YOUR FACEBOOK FRIENDS, OR RETWEET AN INSPIRING ARTICLE FOR YOUR FOLLOWERS? EVERY SOCIAL OUTLET HAS ITS OWN SHARING ECOSYSTEM. HERE'S WHAT WORKS FOR HIGH-IMPACT SHARES.

BY COURTNEY SEITER

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The currency of social media is the share.

We all want to be the go-to person with the latest news, the most intriguing viral content, or the best hidden gems followers wouldn’t have found otherwise.

Some people just have a knack for finding and crafting the perfect share. The rest of us have to work a little harder. Really, great social media sharing is a skill. And like all other skills, it requires a little strategy and a lot of practice to perfect.

While this post can’t help you with the practice, it can provide some strategy. Here’s a roadmap to quality social media sharing, including what to share, when to share it and how.

WHAT TO SHARE

Every day, all of us are inundated with lots of stuff--stuff to read and watch and see and think about. Probably too much stuff, honestly.

The average American consumes 34 gigabytes of content and 100,000 words of information in a single day.

That means the biggest challenge of great sharing is to make sure your stuff is better than all that other stuff. Want to know if it is? Ask yourself these four simple questions.

1. Would your network thank you for it?
According to Ann Handley, Head of Content at MarketingProfs and author of Content Rules, this is a good place to start. Is the content so useful that your audience would thank you?

Beyond that, would your audience’s audience thank you? We’ve written before about the power of thinking beyond your audience to the next level of connectivity--it’s a great method for attracting a broad, engaged audience.

2. Does it make you say “Holy smokes”?
But “useful” is only one of the triggers that signals great content to share. It can also be so funny, so ridiculous, so rage-inducing that you simply must pass it on. What we’re looking for here is the “holy smokes” reaction, which Jason Falls explains.

You want your audience to think, “‘Holy smokes,’ this message is: incredible, sad, awesome, beautiful, intelligent, informative or some other declarative response. Ideally, they will think, “Holy smokes, I have to share that with my friends,” he explains.

3. Does it pass the Facebook test?
Think about how people in your audience share and what patterns you’ve observed to determine whether the content you’re considering will get traction.

Buzzfeed Chief Revenue Officer Andy Wiedlin says he urges the clients that Buzzfeed works with to produce sponsored content to think about how the content will play in the confines of Facebook.

“People share things that make them look clever and cool. They are building their own personal brands,” Wiedlin said. “We spend a lot less time thinking how to target and a lot more thinking what people are sharing.”

If you could see see it (and would want to) in your own Facebook feed, you’re on the right track.

4. Would you email it to a friend?
This important question comes from Buffer’s Leo Widrich, who uses it as a guiding principle for our own blog. He explains:

“It’s an extremely simple proposition. Yet, it has changed my writing completely. If I put myself into a reader’s head going through a post and seeing whether someone will say “Oh, this is interesting, John will really like this”, then I go ahead and publish it. … I will iterate, find more research, get more examples, until I can truly imagine this happening.”

WHEN TO SHARE

Now that you have a good feeling for what type of content to look out for, what’s the best day and time to share to each social network?

If you use Buffer, you’ve already got a jump on the answers for Twitter, thanks to Buffer’s partnerships with Tweriod and Followerwonk to help you find your optimal times.

Test your data
But anyone can determine their best times for a social network with a little experimenting. Study things like when the largest percentage of your audience is online--Facebook, for example, shows you this information for brand pages in your Facebook Insights under the “Posts” section.

You can also try posting the same content at different times of the day, at least an hour or so apart, and paying close attention to how many clicks each version gets. This postexplains that experiment in greater detail, as well as a few more methods for finding your best times to post.

There’s also some conventional wisdom that we can use as a guide, though your experience may differ based on your particular industry and content.

For Facebook, focus on the end of the week
For Facebook, engagement rates tend to rise as the week goes on. They’re 18% higher on Thursdays and Fridays according to a BuddyMedia study.

Another study found that engagement was 32% higher on weekends.

Most studies indicate that the afternoon (experiment with the window between 1 and 4 p.m.) is the best time to post.

For Twitter, try off-peak times
On Twitter, swim against the stream to make your posts stand out by trying off-peak times--like weekends, when click-through rates tend to be highest.

As for timing, considering the rhythm of the day for your audience--times like lunch or before and after a meeting are when folks are likely to be taking a quick peek at Twitter, so try timing posts for the lunchtime period and for time just before or after the hour to take advantage of the post-meeting crowd.

For Google+, late morning weekdays
The Google+ crowd hits the site hardest on weekdays before noon.

You can also try the free tool Timing+, which analyzes your Google+ posts to see which times garner the best engagement.

For Pinterest, it’s all about Saturdays
The crafters, cooks and shoppers of Pinterest are busiest on the site late at night and on the weekends--particularly Saturday mornings, according to bit.ly.

For LinkedIn, before or after work
LinkedIn is all about work, so it makes sense that the best times to post here are weekdays, in the time just before or after work for the majority of your audience.

HOW TO SHARE

Now we’ve got both our holy smokes, audience-will-thank-us content and the best information available about how to time it, all that remains is to share our great finds the right way. That means showing it off in the best light, creating a consistent style and attributing when we can.

Be consistent with post structure
Humans are creatures of habit, and we like to know what to expect. Help your content’s chances for success by creating a consistent style--i.e. if you pull a quote to share, always add quotation marks.

Research by Dan Zarrella reveals two more items worth being consistent with when it comes to Twitter: link placement and tweet length.

A link about 1/4 of the way through proved best for click-throughs.

And between 120 and 130 characters was the sweet spot for optimum tweet length.

Uncover the gem
Maybe it’s a great photo. It might be a staggering statistic. Or perhaps it’s the perfect quote. Whatever gives you that a-ha moment when you read a share-worthy piece of content is the element to emphasize when you share.

“I read every story looking for the nugget, the gem that will make most people interested in the piece,” says Callie Schweitzer, director of digital innovation at TIME. “It’s the best quote or the best turn of phrase that will draw people in. And I’ve seen great responses like: ‘Wow, I’d never read this but that really brought me in.’”

On Twitter, in-line images are a great opportunity to add another “hook” to your share. On Facebook, don’t forget you can edit multiple fields to take advantage of your quote, stat or other “gem.”

Develop a “type”
We’ve written previously about understanding your posts’ general types, which may include things like:

• Links
• Images
• Quotes
• Retweets
• Questions or comments

You might like to share pictures most of the time, or your own questions and comments to encourage discussion. Whatever works for you, make it your staple type and the identify a few supporting types to back it up. Once you’ve built your staple, you’ll be able to focus in and become known specifically for that type of content.

Give credit to creators
When you can, give credit to both the content’s creator and the site where it originated, a la “by @LeoWid via @buffer.” You might have to trace back a few steps to find the content’s originator, but it’s worth it to give credit where credit is due.

It’s also nice to give a hat tip, or “HT,” to the person or pathway by which you found the content.

Here’s how Austin Kleon, author of the upcoming Show Your Work!, sums up attribution in one chart.

Not only is giving credit the right thing to do, it’s also a small gesture that can help build a bigger relationship in the future with the creators of the content you love.

A Glimpse Into the Landscape of Social Sharing [Infographic]

by Patrick Salyer

January 9, 2014 at 4:00 PM

124
inShare   

As we showed in Gigya’s Social Login data from the third quarter of 2013, a number of social media websites have made strong plays to become the identity provider of record for consumers on the web. And while Facebook is still the dominant one, Google+, Twitter, and LinkedIn are making strides in the area.

In measuring social sharing -- shares from websites and applications to social networks -- however, Gigya’s data shows the rapid growth of another player: Pinterest.

The photo-sharing network, with over 70 million active users, has truly become a top sharing destination and made huge strides in industry verticals like ecommerce, where it has actually surpassed Facebook as the most shared network.

Facebook isn’t the only network that Pinterest has made gains on either. In North America, consumers actually shared to Pinterest more than Twitter during Q3 (29% compared to 24%, respectively).

While once derided as a niche network for bridal registries and home decoration ideas, Pinterest has become a mainstream sharing destination for a wide variety of visual content -- everything from recipes, to fashion, to sports photos, to lesson plans for teachers.

Notably, Pinterest has also taken some interesting steps to boost sharing from other websites and applications, most recently releasing APIs to allow users to more easily post content to the network and allowing users to embed Pinterest content in other sites in hopes of increasingoverall engagement with the photo-sharing site.

Below, you'll find even more data from Q3 of last year, which measures shares to different social networks from the hundreds of thousands of sites and apps that leverage our Connected Consumer Management Suite: