Analysis

GUEST COMMENT A dynamic dialogue — the power of authentic online conversations

Jim Houlihan Bazaarvoice

Jim Houlihan Bazaarvoiceby Jim Houlihan

User generated content (UGC) is transforming the consumer landscape.  In the shape of ratings and reviews, UGC helps us to make better choices based on the opinions of people ‘just like us’ — from what electrical goods to buy to where we send our children to school. It is one of the most potent forces in social commerce, but the source of UGC’s power can be summed up in a single word: trust. Safeguard it and the potential benefits are huge, but neglect it and there’s a lot to lose.

Trust — in yourself
The idea that businesses need to earn consumer trust is as old as commerce itself, but it’s only in the past decade that the concept has transformed from soft aspiration to rock-hard necessity. The emergence of social media has opened up new channels for customer voices to be heard, and importantly, for brands to take part in these conversations.

Even 20 years ago, the consumer voice was largely drowned out by organisations that controlled advertising and mass media channels. Today, the picture has changed completely and forever. Individuals now post online reviews and content that is seen by millions in moments, with greater reach, resonance and impact than traditional advertising could ever dream of matching.

The simple fact of the matter is that customers today won’t buy based solely on the claims of brands. Instead, they look to—and trust—the opinions of other consumers.

To emphasise this point, research from Nielsen shows that 92% of global consumers in 2012 trust word-of-mouth recommendations, whilst 70% trust online consumer reviews more than any other form of advertising. Further, Edelman’s 2012 Trust Barometer underlines the fundamental shift in communications, both in terms of source and channel. In the past year alone credibility in ‘a person like yourself’ has leapt by 22% and trust in ‘multiple online sources’ and ‘social media’ has grown by 18% and 75% respectively.

Eyes on the prize
If you put these figures together with an estimated European e-commerce market that’s worth €246 billion a year, it’s clear that engaging in authentic conversations with customers through ratings and reviews is a prize worth fighting for. But we’re also seeing an increasing number of our clients adopting ratings and reviews for reasons that go beyond immediate bottom-line returns.

The internet generally, and social media specifically, has not only democratised communications but is now also democratising product and service offerings. A global computer manufacturer harnesses UGC to enhance its products, with one of its latest notebooks boasting 20 distinct improvements derived directly from online rating and review. A major French household electronics retailer leverages customer opinion to constantly update its products and services so that they meet rapidly changing needs. In the UK, a travel company is transforming its website into a mini social network, with content largely generated by users — helping it to deliver highly relevant holiday experiences. It’s commerce by the people for the people.

In a more traditional marketing environment, a company might have had to invest in market research to understand its customers, but UGC can deliver this insight in near real time and at significantly lower cost. Failing products and services that might once have lost a customer forever can now be fixed before trust is lost. It’s a value exchange where companies get better at what they do and customers gain a more personalised and responsive experience.

These companies understand that all authentic reviews, not just the good ones, have a value to a business. A good review tells you what you’re doing right, but a bad one tells you where resources should be focused to improve — and that’s business intelligence worth its weight in gold. In addition, the ‘warts and all’ approach builds trust, because most customers will soon become suspicious of websites that show only favourable reviews.

Three steps to authenticity
Despite the clear benefits, many organisations still make missteps that can erode consumer trust. Sometimes these failures are not directly within their control, such as where a third-party promotes or denigrates a product for financial gain. In other instances, though, there is intentional subversion of the medium, where reviews are massaged to give a more favourable impression or incentives offered to reviewers are hidden from consumers.

So what can an organisation do to protect their precious assets of meaningful customer engagement and customer trust? They have to stay alert and follow three steps to achieve authenticity:

Fraud and spam-free
By analysing the source of online reviews, filtering content, and incorporating tools such as predictive modelling, organisations can identify outliers that are likely to be inauthentic. This might be misguided employees faking good reviews of their own organisation, or competitors posting derogatory opinions from phantom customers.

Editorial independence
Organisations must resist the temptation to massage reviews because, as I’ve said, any authentic review is a good review. Moderation is an imperative to weed out anything that might be offensive or illegal, but customers should be allowed to post their own opinions in their own words, even if this includes spelling or grammatical errors.

Total transparency
Organisations must be up-front about any incentives offered to review authors, even if this is a low value discount voucher. If consumers suspect that the reviews they read are not freely given, trust will be lost along with the value of UGC.

Competitive necessity
User-generated content is constantly evolving so none of this is easy, but it is achievable. And, with so much at stake, it’s not something that should be left to chance. Luckily, regulation is catching up. Organisations such as AFNOR (Association Française de Normalisation) in Europe and WOMMA (Word of Mouth Marketing Organization) in the US are working with leading industry players to bring recognised standards and clarity.

It’s critically important that the rule book is written in concert with the social commerce industry; together we can set the authenticity benchmark and our experience can help to inform the standards that will bring transparency and trust. And most importantly, a unified approach will drive a consistent and authentic experience for consumers to engage in online conversations.

Jim Houlihan is director of authenticity at Bazaarvoice

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