Tag Archives: loyalty

Why Online Reviews Haven’t Totally Replaced Word of Mouth (yet)

First recorded word of mouth reco:

Caveman Danook: “Good rock”

Caveman Gok: “Need rock like Danook rock”

danook-larson

Direct, personal, effective.  The best type of recommendation.

Fast forward a few millennia – – millions of shopping decisions are routinely made based on star ratings or online reviews – from total strangers.

In other words, online reviews are often less credible sources than Caveman Gok had.

amazon5-star

While technology has provided lots of review resources (e.g. Yelp, Glassdoor, Amazon Stars), it has not yet figured out how to protect the integrity of these reviews – – thus making them not totally dependable.

And consumers are increasingly realizing this.

At the end of the day, a personal reco from someone you know may still be your best bet.

Consider these news stories from just the last few weeks:

Joanna Stern – WSJ
Is it Really Five Stars – How to Spot Fake Amazon 5-Star Reviews

I visited a Facebook group called “Amazon Reviews” and was promised a full refund on a $44 Amazon purchase of a pet fountain if I did the following on the mega-retailer’s site:
1.
Write a positive review. 2. Post my photos of the product. 3. Rate it five stars.
Not only is this ethically problematic, it is also against Amazon and Facebook user policies.”

There are 4 types of reviews mentioned in the article:
1. Legit reviews – you bought it, you review it, good or bad.
2. Vine reviews – incentivized reviews for prolific reviewers. Objectivity not guaranteed.
3. Incentivized reviews (like the pet fountain above). Objectivity clearly suspect.
4. Fake reviews – often from Asian click farms. Totally bogus – often products reviewed are not even remotely what is listed.
Not exactly encouraging.

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Rolfe Winkler and Andrea Fuller – WSJ
How Companies Secretly Boost Their Glassdoor Ratings

To allegedly combat the bias for negative reviews on sites like Glassdoor, some companies are apparently gently encouraging (and in some cases providing incentives) for employees to leave positive reviews.

Last summer, employees of Guaranteed Rate Inc. posted a stream of negative reviews about the mortgage broker on Glassdoor, a company-ratings website.
“An American sweatshop,” read a one-star review in June. “Worst company I ever worked for,” read another in July. The company’s rating on Glassdoor, which is determined by employee feedback, fell to 2.6 stars out of 5.
– Concerned that negative reviews could hurt recruiting, Guaranteed Rate CEO Victor Ciardelli instructed his team to enlist employees likely to post positive reviews, said a person familiar with his instructions. In September and October these employees flooded Glassdoor with hundreds of five-star ratings. The company rating now sits at 4.1.”

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One study estimates that while 88% of consumers put their trust in online reviews, at least 20% of them are in reality fake (the reviews, not the consumers).

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As time goes on, consumers will judge online reviews with an increasing dose of skepticism, until AI figures out a way to effectively and convincingly screen out reviews that are just not legit.  It’s complicated (see example from the Boston Globe).

reviews-big

So what can a marketer do to encourage the most credible endorsements of their products —  enthusiastic, personal word of mouth recommendations?

chewy

Here are 3 examples, 2 of which involve reaching out and delighting the customer such that they take some sort of action that could influence others:

  • Chewy.com. Over the Holidays we received a mystery package that it turns out was sent by Chewy.com, and included an ink-on-canvas portrait of our dog, and a very enthusiastic hand-written card that said “Surprise!  We hope you and your furbaby enjoy the portrait.  Remember we’re open 24/7.  Call us anytime, we’d love to hear from you!”  So cool.
    –  Yes, this cost $, but they got it back in multiples from the number of people we told about it or who saw our social media posts.  (Not to mention the fact that we’re just a little more likely to continue buying from them ourselves.)yeti
  • YETI.  To become an object of their affection, we merely had to go to the trouble of registering online for a gift we received – – a thermo mug, not one of their over-the-top coolers.
    Shortly thereafter we received a thank you card with several YETI stickers, some of which of course will end up in a visible place, thereby providing a passive reinforcement of the brand to others.
  • Nextdoor.  A bit different from the ‘delight’ category is the true word-of-mouth category, represented by the neighborhood network Nextdoor, which is an avenue for sponsored ads in addition to personal recommendations.  The credibility factor is high.nextdoor
    There are lots of other ways to engender a personal relationship and loyalty well beyond what stars on a review can do.
  • Customer Support that has a personal touch and continuity – so the customer feels a connection with the help desk person (chat, email or phone)
  • Personalized customer outreach (email or snail mail) not asking for anything, just staying in touch and inviting the recipient to provide any feedback they may have.
  • (Making great products and backing them up doesn’t hurt, either).

Random acts of kindness may be seen as an incremental cost, but the personal connection can not only encourage current customers to be loyal, it can encourage them to tell others about their great experience.  And that’s the name of the game.

Just keep in mind: WWDD?

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A Non-Techie’s Guide to the Internet Commerce Trade Show (IRCE)

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This year was the 10th anniversary of the Internet Retailer Conference and Exhibition (IRCE) and my first year of attendance.

IRCE logo

Trying to neatly summarize this sort of confab without a experience as an e-commerce operator is sort of like assuming you can translate Portuguese based on having watched the World Cup.  The show was large, chaotic and alien – sort of like walking into 100 Star Wars bars simultaneously.

So while I have decent e-retailing experience, I will not attempt to make sense of all of this.

But I do have some observations.

E-Commerce is based on a few simple objectives, not too different from the marketing funnel used for any other product marketing, but with different terminology:
– gain the right customers’ attention  (‘engagement’, ‘click thru’, ‘open rate’)
– encourage purchase (‘conversion’)
– efficiently delivering (‘fulfillment’, ‘final mile’)
– establish a relationship (‘customer experience’)
– encourage repeat purchase (‘loyalty’, ‘retention’)
– encourage WOM, referrals (‘evangelism’)
– etc.

Simple, no?  I mean, we all shop online, how difficult could it be?

Well, let’s illustrate some of the complexities using a typical grocery store as the template.  Imagine running this store.

This is a store where:
the store itself serves the entire world — yet it needs to be built to serve the right volume of customers profitably
– finding the store requires a guide — yet the description that will lead to your store changes every 6 months
– your most loyal customers can be lost if a competitor offers to carry the groceries to the car for free
one of your big vendors (i.e. ISP) can have a bad day and you are unable to open, with no control
competitors can pop up virtually next door – instantly – and go away just as fast
– about 4 in 10 customers fill up their carts and then exit the store, leaving the cart in the aisle
a person with bad intent could lock the doors of your store –  from thousands of miles away
your loyal shoppers are barraged with promotional messages from stores right next door – and around the world
your competitors’ customers don’t necessarily live nearby – – but you still have to find them
– some of your competitors sell products to an enormous store that’s in every market, and which sells them cheaper (hint: starts with an ‘A’)
– and all of this is changing at light speed — Yikes!

On the other hand, all is not lost.  Imagine if your store could:
remind customers when important events are, and even suggest items to buy for the occasion
– send customers totally personalized communications, including catalogs – – as often as you want, for almost nothing
make recommendations to your customers about what they might love, based on what they’ve already bought
– send customers not just promotions, but at the exact time that you know they typically buy, and the deals that they respond to
enable your customers to tell all their friends about your great store – – instantly, when they’re most excited
follow up every single purchase to make sure everything is ok
dress your store up for the holidays or another event – – instantly
change what your store offers based on what your customers are buying elsewhere
enable customers to order merely by touching the picture in the ad

This is the magic of e-tailing.  The ability to reach and influence is remarkable, and the rules are constantly changing.

Here are a few companies whose products looked interesting:

Ship 2 My ID – – from their website: “Ship2MyID is a social commerce enabler that will allow users to buy items online and send them to others without needing to know the receiver’s physical address. Both the sender and the receiver’s physical addresses are kept hidden from each other, and the receiver has to accept the shipment, ensuring security.”  Got it?  You give them your email or social media ID, they help someone ship something to you without their knowing your address.  yes, me too.

ShipToMyID

 

OrderGroove – encourages all-important loyalty by enabling subscription ordering (i.e. they figure out when you run out of vitamins, diapers, dog treats, whatever, and facilitate having the manufacturer send to you.)

Ordergroove

Bitpay – Still don’t understand bitcoins?  Doesn’t matter.  With these guys, your store can still accept them.

From their site:  “Instant conversion, no transaction fee, and bank deposits in US Dollars, Euros, GBP, CAD and more. We take the bitcoin exchange rate risk, your customers get the best rate on the market, and you get a payment you can count on, every time.”

Sounds pretty low-risk to me.

Bitpay

FeedVisor – Algorithmic Repricing for Amazon Sellers!   I will admit – – not 100% sure what these guys do.  Maybe not even 50%. There was a crowd of intimidating techies crowded around the booth so I just gave them wide berth and moved on.

Algorithmic Repricing

 

The IRCE show is one trade event that is actually worth attending every year, because you know that in a year everything will be completely different.

 

Top 10 NRA Show Observations (Part 1)

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Once again, I’ve taken one for the team and walked the floor at the National Restaurant Association show (yes, that NRA; sorry Mr. Nugent).

NRA

Show Floor – 2014 NRA – McCormick Place

In addition to things I reported on last year, there are some exciting new offerings.

Because there’s so much cool stuff, I’ve separated my Top 10 list into #6-10 (today’s post) and Top 5 (coming soon).  So here we go.

[NOTE:  as always, all links and photos are live: click on them to learn more]

Observation 10.  Tea!  Tea!  More Tea!  – as you may recall, tea was originally introduced at the 3000 B.C. NRA show (held outdoors in Wrigley Field).

The news this year is that every time you turned around you bumped into another tea purveyor trying to look old and mystical and yet hip at the same time. (sort of like Cher? Keith Richards?)  Dozens of them. Perhaps it’s an echo effect from Starbucks’s Teavana venture.  Or maybe they’ve been there all along and I’m just noticing.  At any rate, hot or cold, flavored or straight, Oprah’s Chai Latte or not, prepare to be offered tea more and more often.

DavidsonTea

 

 

Observation 9.  Greater Sales through Big Data.    Have you heard this term before:  ‘big data’?  Of course you have.  Not to be confused with ‘Satisfying Customers through Big Data‘ (more on that later).  The restaurant business is increasingly swimming in POS data, and LOTS of companies are trying to use it to help restaurants pry every last dollar from your wallet.

Essentially it comes down to driving traffic, increasing loyalty, up-selling, and above all, getting you to buy more high-margin beverages.  You out there, experimenting with different restaurants and learning about different food cultures?  Well, STOP IT!  Do you want to be just average, or do you want to be LOYAL?  Yes, a restaurant-centric, not consumer-centric way of looking at things.

Screen Shot 2014-05-20 at 9.56.30 PM

One loyalty company called Paytronix allows operators to send geofenced messages (it is what it sounds like), lets them pay for food with their phones, and more.  Just when we thought our ability to actually communicate with each other couldn’t get any worse, there are now even more distractions available.

Paytronix also models guest behavior to project potential high-value customers and nurture them. Which of course sounds familiar, since the casinos have been doing it for years.  Except you will never be comped drinks and a hotel room in a restaurant.

Observation 8.  Responsible/Local Sourcing – Whether it’s produce, protein or grains, where food comes from is increasingly getting attention.  However, it’s one thing to say it, quite another to do it on a meaningful scale.  As Chipotle found out recently when they faced a shortage of ‘responsibly raised beef’, reducing your supply options means the margin for error shrinks as well.

HydroponicsScreen Shot 2014-05-22 at 5.10.14 PM

 

Observation 7.  Mobile to help back office.  Could there be a less sexy title?  Doubtful.  The point here is rather than ‘mobile’ being a buzzword but not really ready for primetime, Mobile is starting to be leveraged in a way totally relevant to the frenetic nature of hospitality.

One startup, Partender, has developed a mobile app to get real-time inventory updates for the bar area.  In the bar business, making money is a lot about tightly controlling inventory to keep service levels high, while making as much cash available for the important stuff: hiring trick bartenders like Tom Cruise.

Seriously, I saw this app at work and it is slick, intuitive, and totally appropriate for the use.  When inventory is sitting on the shelves, it’s hard to input with a fixed desktop or laptop.  Mobile is increasingly adding real value where it makes sense..

Screen Shot 2014-05-22 at 5.15.48 PM

Observation 6.  Plant-Based Dinnerware – compostable products have been around a while; this year there were more products that were plant-based.  Specifically, companies like World Centric and Vegware offer tableware, utensils, napkins, hot/cold cups, to-go packages and more made from things like sugar cane, wheat straw, and corn.  As volume increases, costs will come down and you’ll see more of this approach.

energy-savings

…But wait – – Now you can also get utensils that you can not only eat with, but that you can EAT.  Foodie Spoon offers a selection of different serving shapes (spoons, cones, shapes) that you can put stuff on, and then eat the whole thing.  Think of a mini-me taco.

FoodieSpoon
So next time you’re at a party and a waiter offers you an elegant canapé on a spoon, amaze your friends and chomp the whole thing down.  (But maybe check first.)

THAT’S IT FOR OBSERVATIONS 6-10.   COMING SOON:  THE TOP 5, which promises to be even more exciting.

In the meantime, a few bonus experiences from the show:

Silpat Girl

Silpat Girl

Espresso Cheese!

Espresso Cheese!

Stay tuned!