Smart Momma, a baby gear and gifts retailer, started tracking visitors to its site when it did a redesign in 2008 - which was also around the same time that it started using an online reputation management company, Ratepoint. According to owner Heather Burns, the site’s visitors increased threefold from June 2008 to June 2009. From December 2008 to December 2009, visitors increased by 16%. Revenues increased more than 100% from all of 2000 to all of 2009. There are a lot of factors that support those numbers, Burns tells MarketingVOX but the online reviews, she is convinced, are playing a big role. Burns, along with the legions of local businesses turning to such sites as Yelp, have recognized the role the internet plays in their business.
Furthermore they are recognizing that consumers don’t get their information from just one source - say, the internet Yellow Pages - as the latest statistics from BIA/Kelsey’s User View Wave VII, an ongoing consumer tracking study conducted with research partner ConStat, show. It found that, on average, consumers are using 7.9 different media sources when shopping for products or services in their local area, up from 6.5 sources in 2009 and 5.8 in 2008. Among the consumers surveyed, 90 percent use search engines, 48 percent use Internet Yellow Pages, 24 percent use vertical sites, and 42 percent use comparison shopping sites.
Challenges
However as reputation management becomes more popular, the problems associated with consumer-generated content such as reviews will proliferate, predicted Graeme Crossley, CEO of Brand Reputation (via Biz Report), who made his comments before the lawsuits were filed against Yelp. In a survey last year, Brand Reputation found that 84 percent of consumers said that, compared with one year ago, they were more likely to search the internet for reviews before making a purchase. "The rapid rise in social media has led to substantial increase in consumer generated content and any consumer, or former employee, is now an opinion former. Unfortunately for brand owners, a large amount of this content contains misleading information which damages the perception of the brand held by others," Crossley said. "Worse still, technology enables this misleading information to spread quickly and once in the public domain and it is a considerable challenge for brand owners to change these perceptions or to successfully communicate accurate information to balance the viewpoint."
Have a Plan
Not that Crossley is suggesting companies abandon these forums. Rather, he says, they need to have in place strategies to manage potential damage caused by negative conversations and reviews. "A customer that has a good experience will typically tell 3 to 5 people, but a customer who has a poor experience will tell more than 20," said Crossley. "When this trend occurs via the web, these numbers can rapidly multiply and could spell disaster for brands that don't have strategies in place to combat online negative chatter."
