Don’t Fear the Reviewer

Does the idea of allowing your customers to rate your products on your website make you uneasy? If so, it’s time to reverse your thinking: don’t fear the reviews; fear what their absence is costing you. Here are four reasons why encouraging your customers to post product ratings will not only strengthen their allegiance to you but also help you capture more sales:

Break through the trust barrier

As we established previously in our article on the culture of the Web, the Internet collective harbors an inherent mistrust toward all corporate entities, and unfortunately for you, retailers are no exception to that rule. On the other hand, peer validation is everything. No matter what you do or what you sell, if people love it and vouch for you, you’ll be strongly positioned for success. In the absence of this corroboration, you face a significant burden of proof to overcome the natural skepticism of the collective. What does this mean for you? You can spend hours meticulously crafting eloquent descriptions for each and every product you sell, but they will never carry the weight of a review that one of your customers spends five minutes to dash off. Reviews demonstrate that you stand behind your products and you have nothing to hide.Fair? Perhaps not. True? Absolutely. It’s all about trust. However, when it comes to trust, you actually get extra credit for the very fact that you do empower your customers to publish their feedback on your site. For new visitors who may not be familiar with your brand or your reputation, these reviews are a badge of transparency that demonstrate that you stand behind your products and you have nothing to hide.

Tip the scales in your favor

Online shopping is a fact of life in today’s world. However, as commonplace as the act of buying on the Web has become, there is always still a lingering hint of uncertainty that resides with customers because they cannot see, hold and judge an item for themselves before committing to the purchase and paying the associated shipping costs. This effect is multiplied for certain types of merchandise like clothing and shoes. I may know that I generally wear a size 11 running shoe, but when deciding between different brands and styles, how can I tell whether my chosen shoe will run true to size, offer the level of cushioning I desire and be comfortable for a five-mile jog? The last thing you want in this situation is for me to give up and go to a bricks-and-mortar store where I can try before I buy, even if it means paying a bit more for that luxury. This is where customer reviews can save the sale by providing the reassurance I need to feel confident that the particular shoe I have selected will meet my expectations.

Turn your customers into salespeople

Returning once again to the qualities that define the culture of the Web, one of the fundamental characteristics of the Internet collective is their compulsive need to share. As a result, when someone buys something that they love, it’s practically second nature for them to talk up their purchase on sites like Facebook and Twitter. This tendency is all the greater when they can boast about a particularly unique find or an especially good bargain, as they seek the approbation of those in their social networks. It’s the virtual equivalent of taking a girlfriend along on a shopping excursion and having her ooh and ah in approval over your selections. Why not give your customers a soapbox to exercise their habitual need to share on your own site, where their opinions can help persuade other shoppers to purchase the same product when it is right there in front of them, just one click away from landing in their cart? One of the most effective customer review systems we’ve encountered is on gap.com. Not only does Gap allow customers to provide thorough evaluations of each item in their own words, but each product can be rated on several different criteria, including overall sizing, fit through the arms, chest and shoulders as well as the type of occasion for which the item is best suited (i.e. work, going out, etc.). If the prevailing sentiment among reviewers indicates that a shirt runs small or tends to shrink in the wash, I know right away to order a size larger than usual, and I can feel certain that I won’t regret this decision when my order arrives at my doorstep. Furthermore, let’s say I’m a little iffy on whether or not to buy a pair of pants based on how they look in the photographs. Rave reviews from those who have already purchased and worn the same item can provide the tipping point that will persuade me to add them to my cart. Detailed and informative reviews give shoppers the confidence boost they need to complete the transaction.As these examples demonstrate, not only will detailed and informative reviews give shoppers the confidence boost they need to complete the transaction, they can also provide enticement to splurge on additional unplanned items. As a result, chances are good that you will yield a greater number of conversions as well as an increase in the total amount of each sale.

Do your own market research

Your customers buy products from you. Inevitably, those customers have opinions about their purchases. If only you could benefit from knowing what their opinions might be. It just so happens that you can, and you don’t have to spend a boatload of cash on a consumer research study to do it. When you invite your customers to post their reviews of your products on your site, you not only open a direct line of communication, but you also send a clear message that you care about what they have to say. Open a direct line of communication with your customers.Better yet, because it is up to the customer to take the initiative to provide their feedback and they can do so with relative anonymity, you can be confident that you are receiving their honest and unfiltered opinion – much more so than if you tried to solicit a response face-to-face or with a formal survey. Although these reviews do not represent a statistically accurate sampling of all your customers, they can be instrumental in revealing insights that can be invaluable in helping you shape your product offering to better meet their needs. Even when you’ve done your homework and made your best effort to provide a great selection of high-quality products that align with your customers’ interests and concerns, there’s nothing like the candid reassurance of those customers to let you know that your instincts were right. You might even find an unexpectedly strong preference for a certain type of item over another, in which case you can consider expanding your offerings in that category. But wait! What if the feedback you receive is negative? You should be equally appreciative of the opportunity this creates to go back to the drawing board and figure out better ways to give the people what they want. Maybe the response is “I like this, but I really wish it had more of that.” Without reviews, this sentiment might never have come to light, and your customers might have just silently drifted away, leaving you wondering where they went and why. Or perhaps your reviews alert you to a problem that emerges when a product is used over a prolonged period of time or in a particular set of real-world conditions. Even the best quality control efforts can’t forecast and circumvent every potential pitfall, but armed with this knowledge, you can take proactive measures to address the issue and make it right.

Open the door to greater success

If you’ve made the investment in creating a smart, user-friendly e-commerce store, why not seize the opportunity to yield the most from that investment by adding functionality that can multiply your sales? If you’re not sure where to begin, let Fame Foundry’s expert web development team help you develop a customer feedback module that is custom-tailored to fit your brand, your product line and – most importantly – your customers.

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Dos and Don'ts for a Successful Groupon Promotion

Do: Be aware that it’s not for everyone, and it may not be right for you.

With a subscriber base that has surpassed 85 million and shows no signs of slowing, the allure of Groupon is hard to resist. The basic premise seems fail-proof: create a discount offer that’s broadcast to thousands of potential new customers, sit back and watch the dollars roll in.

However, every business model is unique, and there are many variables that determine how well your company can respond to a sudden, short-term influx of traffic or a temporary drop in profit margin.

Running a promotion is particularly risky for companies in Groupon’s bread-and-butter categories like salons, spas and restaurants, where the frequency of offers dilutes their perceived value.

If your business falls into one of these categories, you must carefully weigh the chances of being able to convert first-timers into regular customers versus the likelihood that they’ll simply wait for the next Groupon to come along. If the odds don’t stack up in your favor, you may find that the sacrifices you must make to execute the promotion won’t ultimately deliver a long-term pay-off in the strength and size of your customer pool.

Don’t: Expect Groupon to boost your bottom line.

At least not right away. While there’s no upfront cost to run a promotion, Groupon requires you to discount your products or services by at least 50 percent, and they then typically take a cut of 50 percent of the final selling price, leaving you with only 25 percent of your normal revenue. While you’ll undoubtedly see a major bump in traffic, your margins on that traffic will be slim, if they exist at all.

Playing the Groupon game is less about building profit and more about gaining mass exposure.

Do: Crunch the numbers.

When deciding whether or not Groupon a good fit, you must weigh the ROI of your promotion according to the same metrics as you would any other marketing tactic.

Examine every scenario to determine what your promotion will ultimately cost. What if 100 people jump on your deal? What if it’s more like 1,000 or 10,000? Can the potential benefits justify that level of investment? Or would your money be better spent elsewhere, such as a pay-per-click advertising campaign?

Do: Be strategic in your offer.

If you do decide that Groupon is a good fit for your business, make sure to structure your promotion so that it’s a win for you and your new customers.

Be creative and find a way to build an offer that minimizes the losses you must absorb and maximizes your ability to fulfill a short-term spike in demand. Focus on the products or services where your overhead is lowest and your profit margin is highest.

For example, let’s say you’re a personal trainer. If you offer a Groupon discount on your consultation services, you’re limiting the number of hours you have available to clients who are willing to pay your regular rate. However, let’s say you’re a personal trainer who also sells subscriptions to an online video coaching series. You can absorb an almost unlimited amount of cut-rate subscriptions without compromising your primary revenue stream.

Or, let’s say you run a beachside bed and breakfast. Executing your promotion in the off-season is a great way to reel in new visitors. If your doors are open, your operating expenses are fixed. In terms of defraying those costs, it’s better to be filled to capacity at 25 percent of your standard rate than to have only one or two guests at full price.

Don’t: Be afraid to negotiate.

A lesser-known secret of playing the Groupon game is that you can negotiate. When it comes to shaping your promotion, nothing is written in stone.

You can score a more favorable split on the take than 50/50. You can also cap how many discounts are available, which is a good way to safeguard your bottom line and make sure you don’t end up with more business than you can reasonably handle.

Groupon’s entire business model revolves around presenting great deals that people want to buy, so if you’ve got a good one, make them play ball. If they won’t agree to terms that work for you, either try another daily deals site, or pursue a different marketing strategy entirely. No amount of exposure is worth an arrangement that could potentially sink your business.

Do: Pay attention to the fine print.

Terms and restrictions can make or break your deal. Use the fine print to make sure your offer is one that your business can sustain.

Set an expiration date. Cite whether the offer includes tax and gratuity. Specify whether customers need to make an appointment or reservation in advance to use their Groupon. Determine which products or locations the Groupon applies to. Define whether the Groupon can be used in conjunction with other offers or specials. Limit how many offers can be used per customer and per visit.

Just be careful not to make the terms so restrictive that the promotion loses all value to your potential customers, or your Groupon will be a flop.

Do: Put your best foot forward.

When your Groupon lands in the inboxes of subscribers in your area, you’ll inevitably have an influx of potential new customers checking out your website, your Facebook page and your Twitter feed to find out more about you.

Make sure that your website is up to date and that it showcases the products or services being featured in your promotion in such a way that makes the decision to buy an easy one.

Make sure as well that your Facebook and Twitter streams are primed with interesting content and lively dialogue to boost your chances of scoring a like or a follow from these new visitors.

If you don’t have these critical elements in place before your Groupon hits, you won’t be making the most of the opportunity you have to be in front of hundreds or thousands of people who are in the market for what you have to offer.

Do: Understand that these are Groupon’s customers, not yours.

Due to privacy laws, Groupon cannot share the email addresses or personal information of those who have bought into your deal. So while you’ve gotten great exposure to these potential new customers, you have no built-in way to make a repeat appearance in their inbox.

Make sure that when these shoppers visit your website or come into your store, they have the opportunity (and incentive) to join your mailing list. If you don’t already have a list, now is the time to start building one.

Do: Bring your A-game.

The true value of a Groupon promotion isn’t getting a tidal wave of people through your doors. It’s the opportunity to convert those one-time deal-seekers into loyal customers and fans.

In order to do that, you must wow them. They may come in looking for a bargain, but if what they find is exceptional quality, value and customer service that go above and beyond their expectations, they’ll not only be more likely to come back and pay full price but also to spread the word about you as well.

Do: Make sure everyone’s on the same page.

One sure-fire way to guarantee that your Groupon customer will never come back is to make the process of redeeming their offer a hassle.

Hold special meetings or training sessions if necessary to make sure that everyone who’s on the front lines of your business understands the terms of the offer and how to handle any questions or complaints.

This is also a good opportunity to review your customer service standards and reinforce your expectations to ensure that everyone is prepared to do whatever’s necessary to convert, convert, convert.

Don’t: Alienate your loyal customers.

You know the old saying about new friends and old friends – one is silver and the other is gold. The same applies to customers.

In your efforts to bring new customers in the door, be mindful not to alienate those who’ve been happily paying full price all along.

If you’re going to Groupon, it’s an opportune time to simultaneously execute a customer appreciation promotion to reward these customers for their loyalty and show them that their business is always valued.

Don’t: Mistake Groupon for a marketing plan.

Let’s say you run your first Groupon promotion.Groupon is no substitute for a sustainable, long-term business growth plan. You get a huge response, so you stock up and staff up to meet the demand. The wave comes; the wave goes. Suddenly you’ve got a bunch of employees standing around staring at each other and more inventory than you know what to do with.

While running another promotion seems like the obvious solution to this problem, it’s no substitute for a sustainable, long-term, diversified growth and marketing plan.

You must realize that creating one Groupon offer after another will train old and new customers alike to expect never to pay full price and will ultimately devalue your products and services. You’ll end up caught in a cycle of dependency on discount shoppers and razor-thin margins that will make it next to impossible to ever actually grow your business. And isn’t that the point of running a Groupon to begin with?

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