How user-generated content boosts customer satisfaction

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By: Wise Marketer Staff |

Posted on August 10, 2007

Online retailers are increasingly tapping into user-generated content (UGC) as a way of increasing both sales and customer satisfaction, according to a study by Bazaarvoice and online research publisher e-Consultancy.

The survey found that more than half of all online sellers (51%) consider UGC as either "extremely important" or "very important" to their company strategy over the coming year. And web site content improvement is also a key part of digital marketing investment for online sellers, with 76% saying that this was a high priority.

The power of consumer reviews
Customer ratings and reviews are being used by 28% of online sellers, with more than half (52%) saying that they were considering the use of this feature on their web site.

Social commerce, the report explains, is all about giving both existing and potential customers the means to interact with each other and to make better buying decisions. This is a phenomenon of the digital age that e-retailers can tap into for their own benefit.

The most widely perceived benefit of ratings and reviews among online sellers is "an improvement in site conversion rates", which was viewed as a major benefit by 79% of respondents.

More loyal customers
Improved customer retention and loyalty (73%), as well as better search engine optimisation (59%), were also viewed as major benefits of UGC. The majority of respondents (97%) said that, as consumers, they had found such ratings and reviews online either "extremely helpful" or "very helpful".

According to Sam Decker, chief marketing officer for Bazaarvoice, "The fact that more than half of retailers believe the customer voice to be integral to their sales and customer service strategy shows that ratings and reviews will have a big part to play in the growth of online retail. We expect that the reliance on reviews will grow as more retailers adopt this feature."

A very good year
The survey also noted that the environment for online sellers over the past 12 months has been a very positive one, with half of online sellers (50%) saying they expect growth of 20% or more during the coming year.

Linus Gregoriadis, e-Consultancy's head of research, commented: "Our research shows that it's a very healthy environment for e-commerce, but increased competition in the marketplace means that companies need to work harder to maintain strong growth. Tapping into social commerce could be a great way of gaining a competitive advantage - for example through ratings and reviews. But apart from the early adopters, this is something a large proportion of online retailers are only just starting to think seriously about."

Other findings
Online sellers were asked to rank their top priorities for investment as either high, medium or low priority. Those areas cited as high priority included:

  1. Web site content improvement (76%);
  2. Natural search/SEO (71%);
  3. E-mail marketing (54%);
  4. Paid search (45%);
  5. Web cart/checkout improvements (39%).

More than half (56%) of online sellers said that their overall conversion rate had increased during the past year, compared to only 9% who said it had decreased. In terms of web site traffic, 77% said their level of web site traffic had increased, compared to 5% who had observed a decrease over the same time period.

Most importantly, 42% of online sellers said that their average order value increased over the past year, compared to only 6% for whom it had decreased.

The report, entitled 'Social Commerce Report 2007', was based on a survey of over 800 online marketers including 360 online sellers, mostly in the retail, travel, financial services, and publishing sectors. The full report has been made available for purchase (US$179) from the e-Consultancy web site - click here.

For additional information:
·  Visit e-Consultancy at
·  Visit Bazaarvoice at