Insight: The importance of customer reviews to loyalty

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By: RickFerguson |

Posted on August 15, 2017

Marketers have long understood the power of crowd-sourced reviews – they’ve become so important that entire online businesses such as TripAdvisor, TrustPilot and Yelp have arisen to profit from their power, and shopper reviews have become an essential component of most online brand sites from Amazon on down. Research shows the continuing and growing importance of online reviews in both acquisition and customer loyalty. How can loyalty marketers leverage customer reviews to reward and recognize best customers? Let’s look at the best practices.

By Rick Ferguson

The Huffington Post recently compiled a bevy of stats about the power of online reviews; here’s a taste (all text courtesy of HuffPo):

·       A Brightlocal Local Consumer Review Survey found that 84 percent of consumers trust online reviews as much as a personal recommendation.
·       A Sapient Nitro survey revealed that third-party reviews are the top factor driving large online purchases.
·       76 percent of top consumer brands reviewed by research firm L2 feature user reviews on their website and product pages to drive purchases.
·       The number of brands including reviews on their website has increased by over 70 percent since 2014. Of all major site features, “user reviews” has seen the most dramatic growth.
·       A recent holiday shopping study from Vibes found that only 33 percent of in store-mobile searches were to compare the price of the product; while over 65 percent were searches for reviews or for more information about the product.

Okay, so we know that consumer reviews have become mission-critical to customer acquisition. We may also assume that customers who leave positive reviews, particularly unprompted, are likely loyal customers. What impact does the ability to contribute reviews have on a customers’ loyalty to a brand? The key connection is that loyal customers tend to leave more product reviews, and those reviews are becoming ever more critical to successful online commerce. Money quote from HuffPo:

“Authentic, genuine reviews boost business’ bottom lines. They drive improved search rankings, capture more customers, and result in more revenue. As a business strategy, incorporating reviews into product offerings or as part of your approach to customer service earns repeat, loyal customers, with higher LTV and greater return on their customer acquisition investment.”

To sum up: product reviews are great; you should encourage them; encouraging them will drive acquisition; leveraging them in product design and customer service will facilitate customer loyalty. The obvious way to encourage more product reviews is to reward your customers for posting them, and many brands do just that – Zappos, to name one example, rewards customers with Zappos Rewards points for writing product reviews. While g points for reviews may seem like an easy install into your loyalty program, there are a few watchouts. Here are three key best practices to consider when incorporating product reviews into your loyalty strategy:

1.     Don’t be too generous. Subscription beauty product purveyor Birchbox suffered some PR and social media blowback last year when they reduced to five per month the number of product reviews for which subscribers could earn reward points. By rewarding subscribers with 10 points per product review that could then be redeemed for $10 off product purchases for every 100 points, Birchbox found some subscribers racking up serious discount dollars every month by posting less-than-helpful product reviews. The company was forced to dial back the offer, which raised subscriber ire.

2.     Be transparent. The biggest rookie mistake a brand can make is usually driven by someone in the C-suite who can’t stomach the idea of facilitating negative product reviews. It’s one thing to be Amazon and allow negative reviews; those reviews help Amazon ferret out unworthy products and provide a real service to customers. For manufacturers, the idea is more challenging – why would you allow your customers to bash your own products online? Practicing complete transparency, however, can drive real loyalty as your customers understand that their feedback, both positive and negative, is important to you.

3.     Close the feedback loop. If you reward customers for product reviews, the most essential next step is to demonstrate that you’re listening. Thank members for positive reviews, demonstrate action for negative ones, and incorporate customer feedback both in your communications and in your product development. Customers who understand that their opinions matter to you will become loyal customers indeed.

4.     Create stars. Data analysis may reveal that your most consistent product reviews are also among your most valuable customers. Recognize them by giving them more sway: you can create a “starred” tier of reviewers, for example, who always appear at the top of the review list; you might even gather them into a special group and offer them the chance to connect with your product designers through virtual or physical events. Lego, for example, has even hired some of their most loyal brick-heads as model designers.

Product reviews are an essential component of digital marketing. By practicing transparency, rewarding and recognizing top reviewers, and closing the feedback loop, you can leverage the power of reviews to drive acquisition, retention, and brand loyalty. It’s a surefire way to ensure that you earn your own five-star review from senior management.

Rick Ferguson is Editor in Chief of the Wise Marketer Group.