June 26, 2019 by Rahul Chadha
One of the constant challenges eCommerce sites face is how to draw new customers while keeping a lid on expenses. It’s the reason that eCommerce VPs keep such a close eye on their customer acquisition costs (CACs)—a key metric for any online store.
Some new data suggests there’s a surprisingly low-tech way for online retailers to drive new shoppers to their sites. It’s also pretty old school. It’s word-of-mouth (WOM) marketing.
Word of Mouth Beats Search for Discoverability
A new poll from Yes Marketing reveals that a fair number of digital shoppers use their offline personal networks to learn about unfamiliar retailers.
In fact, Yes Marketing found that 45% of online shoppers discovered a new retailer through a recommendation from a friend or family member.1 That was nearly three times the number of shoppers who had stumbled across a new retailer through a Google search.
But retailers should also tread carefully regarding word-of-mouth. Unsurprisingly, a bad reputation can have a harmful effect on your bottom line. Yes Marketing reported that nearly 70% of shoppers were swayed to avoid a retailer after seeing a negative review from family, friends, or news media.
Of course, drumming up some good word-of-mouth around your online store is easier said than done. You need to deliver quality products at a good price, offer a superior user experience, and provide shoppers with top-notch customer service—no small feat.
One way to improve your word-of-mouth marketing? Yes Marketing suggests giving your existing customers a reason to share their satisfaction by providing them with an incentive. That could consist of an exclusive offer, or a discount for those who recruit a new customer on your behalf.
Get Your Digital WOM On
eCommerce sites can also improve their word-of-mouth marketing with some digital strategies. Ratings and reviews, for example, can serve the same purpose as a personal recommendation. And while they might not provide all the benefits as a recommendation from a friend or family member, ratings and reviews perform a key task: providing shoppers with the social proof they need to overcome their hesitation about a purchase.
Yes Marketing noted that almost 20% of online shoppers were influenced by reviews or customer testimonials when considering making a purchase from a new site. And more than a third of shoppers said getting enough product information from a new retailer would help them to build trust.
When done correctly, Customer-Generated Content (CGC) can address those shopper needs.
Yes Marketing also suggested using content from product reviews and other testimonials in advertising campaigns.
It makes perfect sense. Your most satisfied customers are handing you some of the best ad copy you could ever come up with. Take advantage of it.
TurnTo Can Help
It’s helpful to think of your product reviews, customer testimonials and other CGC as a form of digital word-of-mouth marketing.
CGC can help retailers flesh out their product detail pages with information not normally found in a product description, such as fit or durability.
Sometimes those details are all that’s needed to push someone browsing your site into making a purchase.
TurnTo’s products are designed to collect more Customer-Generated Content like Ratings & Reviews and Visual Reviews so shoppers have a surplus of information at their fingertips. And research shows that the more reviews you have, the better.
Want to learn about the latest eCommerce insights on a regular basis?
1 The Retail Shopper’s Journey to Loyalty; Yes Marketing, June 2019
August 7, 2009 by George Eberstadt
Highlights from the report: Spending on U.S. word-of-mouth (WoM) marketing increased 14.2% to $1.54 billion in 2008, as brands recognized the need to get involved in consumer and business conversations and allocate resources to WoM.
Spending increased at a compound annual growth rate (CAGR) of 37.6% from 2003 to 2008. Spending on WoM content and services increased 13.0% to $1.26 billion in 2008, as major marketers integrated WoM into the media mix and shifted to specialized WoM firms that help drive long-term campaigns.
Spending rose at a 37.3% CAGR of 37.3% from 2003 to 2008. Spending on WoM ancillary products increased 19.7% to $286 million in 2008, due to growing demand for return-on-investment (ROI) data and the impact of WoM campaigns on consumer purchasing behavior. Growth can also be attributed to the increasing sophistication of WoM tools that are being used to monitor online and offline conversations. Spending grew at a CAGR of 39.1% from 2003 to 2008.
Total spending on WoM marketing is expected to increase 10.2% to $1.70 billion in 2009 and grow at a CAGR of 14.5% during the 2008-2013 period, reaching $3.04 billion as more brands include WoM in their media mix and ROI metrics improve.
July 1, 2009 by George Eberstadt
Discgear.com just announced some dramatic success with customer reviews — 74% increase in conversions within 5 months. Congrats to them and to their review system provider, PowerReviews.
But I couldn’t help noticing this quote from Michael Brown, their IT Director: “User-generated comments and reviews are second only to word-of-mouth as a purchase driver for web users.” So, by all means, invest in a customer reviews system.
But don’t forget your word-of-mouth system, too!
June 22, 2009 by George Eberstadt
Word-of-mouth has a radically greater impact on purchase behavior when it comes from friends than from strangers (like bloggers), according to a Mintel survey of buying behavior, just cited in eMarketer,
eMarketer says: “While bloggers may bring buzz to a product, converting the buzz to sales is another matter.”
“It’s interesting to find that as much time as we spend online, we still prefer a personal recommendation from someone we know and trust,” said Chris Haack of Mintel.
Here’s their data:
February 3, 2009 by George Eberstadt
Here’s the TurnTo presentation from the OnMedia conference today. This talk focuses on the whole idea of “Trusted References”. The TurnTo part goes from roughly minute 1 to minute 10. (I’m hoping the conference will provide a version of this without the side-bar. I’ll upgrade if we get one…)
January 23, 2009 by George Eberstadt
I just got back from the Social Networking Conference in Miami. Here’s the presentation I gave, titled “Ecommerce Meets Social Networks: A Different Approach to Driving Online Referrals”. The usual caveats about slides-without-accompanying-commentary apply.
December 12, 2008 by George Eberstadt
A couple recent studies by BIGresearch that look at purchase influence factors across all media – traditional and online – shed further light on the importance of the personal advice network. As a pair, they paint an interesting picture: person-to-person product recommendations are the #1 influence factor on buyers (at least for a number of product categories), and they are the preferred way for recommenders to deliver their advice.
One study, conducted for the Retail Advertising and Marketing Association, shows that word-of-mouth is the top influence channel for electronics (44.4%) and apparel purchases (34.3%). In electronics, product reviews came in second (36.8%) and retail advertising inserts came in third (29.2%). In apparel, retail advertising inserts came in second (33.3%) and in-store promotions came in third (30.4%).
The other, reprinted in eMarketer, shows that across all age groups, the primary means through which people communicate product recommendations are the traditional ones – face-to-face, email, and phone – with blogs and communities far behind. What’s significant here is that the leaders are primarily point-to-point channels, not mass communications channels, highlighting that people with advice to offer prefer to deliver it directly to the person who needs it. (OK, people could be email blasting their product recommendations to their friends, but I suspect the dominant mode here is more targeted.)