The maker of software for online retailers processed more than $1.6 billion in orders in the quarter.
E-mail marketing and customer reviews are powerful but different tools. When combined, they can pack quite a wallop.
Mountain climbers attempting to scale a sheer rock wall succeed or fail based in part on having the right equipment. And no advice on equipment choice resonates with a climber planning an ascent quite like the report of another climber who’s just done it.
So it’s little surprise that e-mail, already an effective marketing vehicle for retailer Mountain Gear, delivers even better results when it includes reviews of top-rated products by its customers. In a recent test, e-mail containing customer reviews produced 5%-8% higher click-through, 14%-17% higher conversion and 81%-85% higher average order value than e-mail without reviews promoting the same products. Mountain Gear uses the customer reviews platform of vendor PowerReviews.
If the marketing buzzword of two years ago was “searchandising”-the blending of online search and merchandising-then a one-word description of online marketing’s emerging mix of socializing and selling is probably just around the corner. Mountain Gear’s test and the similar experience of other retailers suggest that the use of customer reviews in e-mail marketing is likely to be part of a trend.
By putting reviews into e-mail messages, marketers leverage the trust consumers have in other consumers’ views. By a margin of 53% to 20%, shoppers prefer to see recommendations based on top ratings by other consumers than best sellers, according to a PowerReviews study with research firm The E-Tailing Group.
Economic turmoil may make the voice of the customer more effective, some experts say. “As softness in the economy forces consumers to more carefully consider their retail purchases, product research tools like customer ratings and reviews are becoming a critical step in the online shopping process,” says Forrester Research Inc. analyst Sucharita Mulpuru in a report on e-mail marketing.
And with budgets tight, marketers are likely to lean heavily on e-mail because it’s so cost-effective. Marketers reported paying an average $6.85 for every order received from e-mail marketing versus $19.32 for those from paid search, according to a survey of online retailers this year by Shop.org, the online arm of the National Retail Foundation, and Forrester Research.
‘Genuine and trustworthy’
Online retailers are in fact incorporating customer reviews in e-mail marketing in significant numbers, according to two of the vendors that provide customer review technology. About 20% of retail clients who’ve implemented PowerReviews on their site are using reviews in e-mail marketing, while more than half of Bazaarvoice clients feature top-rated products in e-mail campaigns
For Mountain Gear, passing on reviews fit well with its overall marketing strategy. “One of our values is to be genuine and trustworthy, and we decided that using the product reviews in e-mail was a great way to share the hands-on experience of customers with other customers potentially interested in the same products,” says Whitney Parsons, Internet marketing manager. With some 10,000 customer reviews collected since it launched reviews on its site in 2005, Mountain Gear has been leveraging reviews in its e-mail campaigns for just over a year.
Parsons estimates that just under half of the marketing e-mail sent by Mountain Gear now contains reviews, and says the company’s larger marketing strategy drives when reviews are used and which product reviews are included in e-mail campaigns. For retailers in general, some e-mail campaigns don’t lend themselves to incorporating reviews, such as when a retailer is introducing a new product that has not yet garnered reviews, or is promoting a contest.
Mountain Gear gets the reviews in an XML file from PowerReviews for inclusion in its e-mail messages. The reviews can also be sent to a retailer’s e-mail service provider. Bazaarvoice has a similar process and can automatically populate preformatted e-mail templates with top-rated products. However, e-retailers almost universally hand select the products and reviews to be included in e-mail messages, says Sam Decker, chief marketing officer of Bazaarvoice.
At Drugstore.com, e-mail messages containing “Five Star Reviews” of top-rated products are rotated in along with many other kinds of e-mail messages, says chief marketing officer David Lonczak, who did not provide an estimate of the percentage of e-mail campaigns that include reviews.
“Peer opinions can offer consumers more confidence in purchasing an item,” Lonczak says. “And very often customer reviews can give a point of view that is not listed in manufacturing sell copy-such as whether a product works for sensitive skin or has an additional facet or use.”
Drugstore.com sends certain reviews to particular customer segments. For example, the online retailer recently sent customers who had previously made skin-care purchases an e-mail promoting 30% off lotions, moisturizers and anti-aging products that had received five star ratings from customers. While he would not provide details, Lonczak says “it’s fair to say review e-mails perform well for us.”
A good read
Levenger Co., a web and catalog retailer of products for readers, launched reviews from Bazaarvoice on its site in 2005 and started using them very selectively in e-mails early last year. About 5% of its e-mail campaigns over the past year contained customer reviews, says Mario Cordon, vice president of direct marketing. “We only do this on some, because we use a mix of different kinds of e-mail campaigns, “ he says.
Including reviews in e-mail messages boosts open rates by about 1% and the conversion rate by slightly less, Cordon says. Consumer reviews are one element he credits along with other tactics, such as broader segmentation and better use of offers, with a double-digit increase in revenue from e-mail programs in 2008 over the previous year.
While customer reviews have proven to be a potent way to harness the growing consumer-to-consumer, social dimension of the web, experts say e-mail marketers must not go to this particular well too often. Savvy marketers will guard against overusing this powerful tool and thus provoking “reviews fatigue” among consumers.
And, while the experience of Mountain Gear, Levenger and Drugstore suggests that customer reviews can be an effective addition to a broader marketing program, they are not a silver bullet, Forrester’s Mulpuru says. “‘Positive reviews,” she says, “are a helpful, but not an assured, tactic to convert today’s skeptical and savvy online shopper.”