Consumers Trust Online Reviews As Much As Personal Recommendations

The recent (2012) Search Engine Land’s Local Consumer Review Survey shows that since 2010, consumers are more likely to use the Internet to find local businesses, and they are doing it more often.  They are also just as likely to turn to the internet, and trust online reviews as they are to ask for personal recommendations about local businesses.

  • 85% of consumers surveyed have used the internet to find a local business in the past 12 months. This number is up from 79% in 2010.
  • The majority of consumers surveyed use online reviews to make spending decisions. 27% of consumers are regularly reading online reviews, while another 49% are occasional readers.
  • 65% of consumers (up from 58% in 2010) are reading between 2-10 reviews when researching local businesses.
  • 72% of consumers trust online reviews as they do to personal recommendations.
  • 58% of consumers trust a business which has positive online reviews (up from 55% in 2010)
  • 52% of consumers are more likely to use a local business if they have positive reviews
  • 28% of consumers cite location &/or price as main decision making factor (down from. 38% in 2010)

If you own a business, the statistics are clear, you need a strong online presence, you also need to monitor reviews and be proactive in following up with reviewers in a positive and constructive manner.

Reviews, even negative have always been opportunities to learn, to improve and create fans, do not ignore them, acknowledge reviewers, make things right if you can, pledge to improve, be transparent and truthful

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Car Dealership Reviews Affect Purchase Decision

Almost seven in 10 consumers said dealership reviews affected their purchase decision

Just like consumers in almost every other sector of ecommerce, car shoppers are doing their research online before heading out to make a purchase. According to an April 2012 poll by Digital Air Strike of US consumers who had purchased a car in the last six months, review sites were a widely used tool by car buyers during the research phase of their purchase process. In fact, 69% of consumers said review sites had an impact on the dealership they visited.

Half of respondents said reading reviews of dealerships had affirmed their choice of where to make a purchase, while about one-quarter said the reviews had no effect on them. But online feedback from other customers held an outsized influence on a small minority of car shoppers—14% said reviews were the sole reason they had decided to visit a dealership. And 5% decided to change the dealership they bought from after reading negative reviews online.

And when it came to actually buying, almost seven in 10 shoppers said reviews had aided them in their purchase decision. About four in 10 said the reviews helped them in a general sense, while three in 10 had decided to purchase from a particular dealer based on online feedback from other customers. Moreover, if a dealership had been completely absent from review sites, one in 10 respondents would have been less likely to purchase from them.

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Foursquare Lets Businesses Talk to Users

Foursquare will start letting businesses capitalize on the enthusiasm of customers who’ve checked in repeatedly by rolling out a way to message them, starting today.

Through the “local updates” tool, businesses can send their updates to a pool of users who will be picked by Foursquare’s algorithm based on the frequency and recency of their check-ins and the businesses they’ve “liked” (a feature Foursquare made available with its redesign last month).

It could give the nearly 1 million businesses that have claimed their listing on Foursquare a stronger incentive to be active on the platform, since they can place messages about specials and events for free in the activity streams of users who’ve likely already spent money in their stores and had enough of an affinity to want to broadcast their visit to friends.

“Now with local updates, it’s hopefully a tool that merchants engage with every day,” said Noah Weiss, the Foursquare product manager who oversees all merchant-facing tools, who noted that users will also have the ability to opt out of receiving updates from a business.

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Reinventing Customer Service Harnessing Social Media

Social media  leveled the playing field on which brands and consumers face off. Where  brands controlled the means of broadcast (through PR, advertising and news coverage), consumers now have a megaphone of their own in the form of social media to voice their opinion and force companies to rethink customer service

Social sharing and viral content means an angry mob has never been easier to assemble, and brands behaving badly can now find their reputation in tatters in a matter of hours. Just ask Addison Lee’s cyclist-bashing chairman John Griffin, who turned the company into a virtual punching bag for the denizens of Twitter and Facebook overnight. Griffin sparked anger by claiming the majority of cyclist road deaths in London are the result of inexperience on the part of the cyclist.

This is just one example from recent times when the consumer’s megaphone has become louder than that of the brand. Not only does social media amplify complaints, but with criticism out in the open it allows media outlets to offer coverage of the discourse, amplifying the criticism further How many news stories have you read which cite “Twitter outrage” or a “Facebook campaign”?

This reshuffling of power has forced many companies – both large and small – to rethink their customer service and marketing. Having suddenly had power wrested from them, many are now fighting back and employing some experimental and interesting methods to get back in the driving seat.

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Brands Ignore Negative Social Buzz at Their Peril

“In a world of social sites that allow consumers to post photos, videos and opinions about companies and brands, disparaging comments and other content detrimental to brands are bound to bubble up,” said a new eMarketer report “Dealing with Negative Buzz on Social Media.” “And that content can stay online forever.”

In February, American Express found that 46% of US internet users it surveyed had turned to companies’ social media sites to vent their frustrations about poor experiences.

“This buildup of negative buzz on social media can have a significant impact on brands because social media is more public and moves faster than customer complaints via traditional channels,” said eMarketer.

Top 5 Reasons US Internet Users Use Social Media for Customer Service, Feb 2012 (% of respondents)

Moreover, companies now have accounts and brand pages on so many different social networks that it is hard to keep up. “Having a plan in place for dealing specifically with negative buzz and then constantly monitoring, tracking and responding to comments on social media are two important ways to deal with negative situations on social media,” said eMarketer. But implementing these precautions requires integration between teams within a company, expanded thinking about what words and issues to track, and, in some cases, tasking outside companies and vendors to provide monitoring services.

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Forget Engagement, Consumers Want Simplicity

In a world where brands are constantly fighting for attention, many marketers are asking themselves a key question:  What is the best way to impact purchase decision and brand loyalty?

The IBM Institute for Business Value found that 60-65% of business leaders who believe that consumers follow their brands on social media sites because they want to be a part of a community. Only 25-30% of consumers agree. The top reason consumers follow a brand? To get discounts – not exactly ideal for a company’s bottom line.

On top of trying too hard to engage with consumers via social media, marketers are generally pushing out too much information, causing people to over-think purchase decisions and making them more likely to change their minds about a product, be less confident in their choice and less likely remain loyal to the brand.

So what should marketers do? Here at Corporate Executive Board, we surveyed more than 7,000 consumers and interviewed 200 marketing executives across consumer brands and industries to find out. The answer: Simplify the decision-making process, so much so that consumers actually think less about the decision. Marketers can do that in three easy ways by helping consumers:

  • Trust the information they receive
  • Learn effectively without distraction
  • Weigh options confidently

When used together, this approach is known as Decision Simplicity.

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Farmers Insurance Journey to Social Media ROI

Very informative presentation by Farmers Insurance Group’s Director of Social Media, Ryon Harms.  Ryon shares how they help their agent engage on social media, insure compliance and measuring social media ROI.

Ryon talks about how their Facebook engagement strategy is focused on their people instead of their product and gives examples of how their local agents are connecting daily with customers.

Take out from the presentation:

  1. Social media is about relationships, not product or services, relationships generate ROI
  2. The best social media ideas will probably come from the field
  3. Your employees are valuable resources in your social media programs, don’t cut them off social media, empower them
  4. Don’t write off social media as a business generator
  5. I regulated environments you need to have a system to monitor social media conversations, the same way you need to monitor websites and emails for compliance.

Almost half of online customers expect brands to provide customer service on Facebook

You can add customer service to the growing litany of shopping experiences affected by social media in general, Facebook in particular. Customers headed online to shop are bringing with them high expectations about the kind of customer service they’ll get once there, especially on social networks. In a Q4 2011 survey of worldwide online consumers, Oracle found that online users valued having a number of pathways to customer service support, including through social media, click-to-call services and instant messaging.

Given Facebook’s dominance of the social media landscape, it should surprise no one that 46% of those polled anticipated that companies would provide customer support through the social network. Expectations for Twitter were significantly lower; only 17% of respondents thought brands would provide support and information via Twitter accounts.

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Social Media Will Become #2 Customer Interaction Method in the Next 3 to 5 Years

A new IBM study of approximately 1,700 chief executive officers representing 64 countries and 18 industries shows that in the coming years, CEOs plan to shift from using email and phone as primary consumer communication vehicles to using social media to achieve better and closer connections with customers. Today, only 16% of CEOs are using social platforms to connect with their customers, but that percentage is predicted to grow to almost 60% within three to five years.

The 2012 Global CEO Study lists the current customer interaction method hierarchy as (1) face-to-face, (2) website, (3) channel partners, (4) call centers, (5) traditional media, (6) advisory groups and (7) social media. Within five years, however, the study predicts that social media will rise to the #2 spot, just behind face-to-face interactions, with traditional media moving to the bottom of the list.

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How are CEOs responding to the complexity of increasingly interconnected organizations, markets, societies and governments? Our key findings center on:

Study highlights

 

Haters Can Be Lovers

Rogers Communications‘ Vice President of Social Media, Keith McArthur, shares how they turned their harshest critics into brand ambassadors. Keith talks through the steps they took as a company to respond to negative feedback about their new product updates and shares three key takeaways from their experience.