An online brand community (OBC) is an important platform for firms to differentiate and increase their competitive advantage. It allows companies to strengthen relationships with customers and involve them in brand co-creation (Tsai, 2012). Calkins et al describes community, alongside content and commerce, as “the 3Cs” that are fundamental to online retailing (Calkins et al, 2000). In recent years, OBCs have acquired considerable importance within brands’ communication strategies and managing relationships with their customers (Lopez, 2017).

Watch here: Why Online Communities are Better than Social Media Sites

Features of Effective Online Communities 

User Profiles

The consumer’s experience with an online brand community is the result of interactions with both other members and the community itself (Nambisan, 2011). Users may feel a lot more connected, if they have an online profile that they feel best represents them, to recognise and relate to other members online. For example, beauty retailer Sephora requires users to fill out profile where members indicate skin, hair and eye colour, that allows them to match other “beauty matches” to seek more relevant advice for beauty products. For other retailers, user information can be critical to gaining a further understanding of the user profile.

Photo Galleries to host User Generated Content

UGC brings an audience together and creates a true sense of a community. Effective examples include the UGC content that Debenhams rolled out across all brand pages, where customers can upload photos of their new looks to be featured and connect with the online community. Customers browsing the content can buy the product from the Instagram post. An effective online community could house this UGC in one place, to make it easy for other users to see all content uploaded.

Product Reviews and Discussion Forums

Whilst shopping online, users can be unwilling to make a transaction due to uncertainty in their online environment and decision making. McWilliam emphasises that trust, by definition, mitigates uncertainty and is the central construct that sustains both interpersonal and economic relationships (McWilliam, 2000). It is the contribution that eWOM makes to the building and maintenance of trust in an online environment that makes eWOM so important. Whilst product reviews are critical on product display pages, users should be able to explore and discuss this further in the retailers online community space. Product reviews on product pages do not allow the user to ask specific questions but live chats and discussion forums let the consumers take free reign, and develop meaningful relationships.

“Users who contribute product reviews or post messages on online communities visit sites more than nine times as often as non‐users do, remain twice as loyal and buy almost twice as often”

(Brown, 2002).

Why are OBCs Important for the Company?

Online brand communities provide increasing returns to the firms at several levels:

1.) They Acquire Rich Data

Online communities acquire member-generated data on products offered by the firm as well as opinions and comparisons on competitors that sell similar products (Lopez, 2017). This is valuable for the business as they will receive first hand insight into what their customers are thinking and valuable consumer feedback. If the users are required to sign up to “become a member”, the company will retain valuable personal information which can give them more insight into their demographic, and can further use this information to personalise and segment their marketing practise.

2.) Community Relationships will, in turn, develop Loyalty 

If done right, OBSs will build genuine relationships between customers who can recognise and relate to each other based on shared interests. Frequent returns to the site to visit the community will develop brand loyalty and a deeper sense of loyalty to the community.

3.) Generates Sales and a Return on Investment

An online community will generate generous ROI for the company from brand loyalty, customer satisfaction and trust in the brand, from their “fellow consumers”. An analysis by McKinsey revealed that community members account for one‐third of all users, but generate two‐thirds of all online sales (Brown, 2002).

How can their effectiveness be measured?

Research by Preece outlines the attributes of online communities that can be measured for marketing managers to gauge and monitor how successful their community initiatives are (Preece, 2002).

Purpose: This refers to the involvement levels of members within the community. In turn, this indicates how well the online community services its purpose for the consumer. Indicators to the depth of interaction include;

• Number of total posts
• Number of posts, per user
• Total time spent per user on the community, and time per social function
• Bounce Rate
• Conversion Rates – Orders directed from community to a purchase
• Reciprocity – Number and quality of comments and responding posts to other users.

People: This determinant refers to the number of members within the online community. This can be easily tracked and measures, and the company can set themselves goals and targets. New members can be acquired by promotion and an online customer journey that directs them to the community landing page. The “people” aspect, also refers to the various types of members based on their level of participation as well as personal characteristics, that can be closely measured to gain a better understanding of the companies customer profile.

Policy: It is also important to implement policies to deter harmful behaviour, and generate trust among members. In order to boost trust, brands sponsoring a community need to properly manage the community’s mission and its policies, as well as the effects of relations between its members (Lopez, 2017).

Risks

Cost – The cost will largely be in the initial implementation and promotion of the online community. If the business has the scale and scope of e-commerce operations, this should not be a hugely costly task, and the subsequent costs will be small.

Functionality – Not all firms will have the scale and resource to be able to implement this. They must have the right user experience to support it. A clunky user experience, could actually have a negative effect. Research into the importance of seamless user experiences by Retail week indicates that, “25% of disruptive retailers offer seamless shopping experiences across all channels, compared with only 13% of non-disruptors” (Retail Week, 2018).

Commercial Risk – An OBC’s purpose satisfies customers on their search for information, social relationships and creating a personal identity linked to the brand (Lopez, 2017). The inclusion of commercial actions could be negatively perceived by customers. Research by Lopez indicates that brand community experience will be less positive if “consumers see the company is using the community for commercial purposes, rather than as a forum for conversations and relationships” (Lopez, 2017).

References

Brown, J., Broderick, A.J. and Lee, N. (2007), “Word‐of‐mouth communication within online communities”, Journal of Interactive Marketing, Vol. 21 No. 3, pp. 2‐20

Calkins, J.D., Farello, M.J. and Shi, C.S. (2000), “From retailing to e‐tailing”, The McKinsey Quarterly, No. 1, available at: www.mckinseyquarterly.com.

Martinez-Lopez, F., Anaya-Sanchez, R., Molinillo, S., Aguilar-Illescas, R. & Esteban-Millat, I. 2017, “Consumer engagement in an online brand community”, ELECTRONIC COMMERCE RESEARCH AND APPLICATIONS, vol. 23, pp. 24-37.

McWilliam, G. (2000), “Building stronger brands through online communities”, Sloan Management Review, Spring, pp. 43‐54.

Nambisan, P. & Watt, J.H. 2011, “Managing customer experiences in online product communities”, Journal of Business Research, vol. 64, no. 8, pp. 889-895.

Preece, J. (2001), “Sociability and usability in online communities: determining and measuring success”, Behaviour & Information Technology, Vol. 20 No. 5, pp. 347‐56.

Retail Week . (2018). How-to guide: Standing out with rich media.Available: https://www.retail-week.com/analysis/how-to-guide-standing-out-with-rich-media/7028655.article. Last accessed 4th April 2018.

Tsai, H., Huang, H. & Chiu, Y. 2012, “Brand community participation in Taiwan: Examining the roles of individual-, group-, and relationship-level antecedents”, Journal of Business Research, vol. 65, no. 5, pp. 676-684.

This blog will discuss the importance of product reviews for online retailers and how these can be used the most effectively to increase customer conversion rates. Product reviews allow a community of consumers to discuss and feedback on a product, and meet Chaffey’s description of “community participation”, under his second channel of “Online PR” (Chaffey, 2015).

Uncertainty in the online environment can make many consumers reluctant to engage in online transactions, due to the ambiguity inherent in virtual situations as opposed to face-to-face interactions (Racherla, 2012). McKnight emphasises that trust, by definition, mitigates such constraints and is the central construct that sustains both interpersonal and economic relationships (McKnight, 2001). The underpinning assumption in trust literature is that humans have a fundamental need to reduce uncertainty, and eWOM in the form of product reviews contribute to the building and maintenance of trust in an online environment.

Product review systems have become one of the most popular information sources for modern consumers (Racherla, 2012). Perhaps this is because they have a higher credibility, empathy and relevance to customers than marketers, as authors are “fellow consumers” (Bickart and Schindler, 2001). Findings from research conducted on my placement year, indicate the vital importance of  online retailers using product reviews on product pages to increase customer conversion rates.

Table 1 Impact of Reviews on Product Pages March 2017

Source: Information compiled by Student from Online Trading Team.

Customers converted at a significantly higher rate on the products that had product reviews, compared to those that didn’t. Research by Bickart and Schindler indicates that negative reviews have a greater impact on experience goods (goods that need to be tried such as make up and skincare) whereas positive reviews have a greater impact on search goods (features can be objectively evaluated from available information) such as a piece of hardware (Bickart and Schindler, 2001). Other reports also indicate that negative reviews can be valuable too, as they help increase consumer trust in the opinions that they read (Charlton, 2015). However, the ratio of positive to negative reviews is critical to the consumer’s decision making process. Research has found that if the consumer reads between one and three bad online reviews, this would be enough to deter the majority (67%) of shoppers from purchasing a product or service (Charlton, 2015).

Source: Econsultancy, 2015

As well as improving conversions and customer experience, product reviews also have considerable SEO benefits as they provide fresh, new content for search engines (Charlton, 2015). The information is differentiated from the standard manufacturer product description, which increases the chance of them appearing higher up the SERP. If the reviews are formatted correctly, the star ranking can stand out and attract customers to increase click through rates. For example, see below the star ranking that John Lewis have implemented, which stands out amongst its competition. Research suggests that these attributes can achieve a 10-20% increase in click through rates (Charlton, 2015).

Once product reviews have been implemented, how can they be used effectively?

1.) Quantity

A difficulty with implementing product reviews can simply be encouraging enough customers to write a review in the first place. Third party providers such as Bazaar Voice and Reevoo are a guaranteed method of getting enough authenticated reviews from customers (Charlton, 2015). Other competitions and incentives can be used to entice customers to leave a review. For example, Debenhams ran a competition in March 2017 offering customers who left a review the chance to win a fragrance. The amount of reviews posted for the period increased by 200%.

Retailers can also send the customer an email post-purchase. The timing of the email must be considered to allow enough time for the customer to have tried the product but soon enough that it is still fresh in their mind. Marks and Spencer have used Bazaar Voice reviews functionally in post-purchase emails which has seen an increase in customer feedback of more than 400% (Charlton, 2015). An example below is a post-purchase email from online fashion retailer MISSGUIDED, who similarly use the BazaarVoice service.

Source: MISSGUIDED email sent to customer on 23/11/2017

2.) Format

Depending on the product, appropriate attributes should be assigned to the product for the customer to rate making it easy for customers to scan for what they are looking for (Li et al, 2008). For example, on a product page for a MAC lipstick, Debenhams divide the attributes to Quality, Value and Style. However, this could be deemed quite generic for a lipstick product where other factors such as pigment, finish and long wearing factors may be more accurate to make a purchase decision. An example of a retailer with a more sophisticated reviewing system is Sephora, see below.

Source: Debenhams.com

See Product Page here for reference, and other product reviews: https://tinyurl.com/y8qpxgj9

3.) Relevance

Sephora have adopted a sophisticated review tool, that allows beauty shoppers to see the reviews from other consumers that are their “Beauty Match” by identifying similar eye colour, hair colour, skin tone and skin type. This allows the product reviews to be a lot more tailored and relevant to the individual customer and will aid them to make a more informed purchasing decision.

Source: Sephora.com

See Product Page here for reference, and other product reviews: https://tinyurl.com/y6wmmy9b

References         

Bickart, B., & Schindler, R. M. (2001). Internet forums as influential sources of consumer information. Journal of interactive marketing, 15(3), 31-40.

Chaffey, D. & Ellis-Chadwick, F. 2015, Digital marketing, Sixth edn, Pearson, Upper Saddle River.

Charlton, G. (2015). Econsultancy. Available: https://econsultancy.com/blog/9366-ecommerce-consumer-reviews-why-you-need-them-and-how-to-use-them. Last accessed 6th Jan 2017.

Li, X. & Hitt, L.M. 2008, “Self-Selection and Information Role of Online Product Reviews”, Information Systems Research, vol. 19, no. 4, pp. 456-474

McKnight DH. 2001. What Trust Means in E-Commerce Customer Relationships: An Interdisciplinary Conceptual Typology. International Journal of Electronic Commerce 6(2): 35–59.

Racherla, P., Mandviwalla, M. & Connolly, D.J. 2012, “Factors affecting consumers’ trust in online product reviews: Consumer trust in online product reviews”, Journal of Consumer Behaviour, vol. 11, no. 2, pp. 94-104.

“Argos utilised Brandwatch Analytics to understand the public’s perception of their new digital concept”.

This case study offers insight into the digital marketing techniques used by Argos to gain social insights into what their customers are saying about their 53 digital stores.

Location

Argos segmented data by using categories based on location data and other criteria such as the names of streets and shopping centres, to create a set of rules. These rules automatically performed actions on mentions from customers tweets, so every time Argos was mentioned in a tweet it would be filtered into its pre-set category. This allows Argos to gain valuable feedback and know which store is performing best, and praise particular members of staff. An example of this is a customer tweeting about the service they received at the Clapham Junction store.

“@Argos_Online thank you so much

for listening!!! I shall definitely be coming

into the store. #greatcustomerservice

#onehappybunny”

This tweet was filtered into the “Clapham Junction” category, so managers could feedback to the store and reward employees.

Demographic

Using the demographic functionality that Brandwatch offered, Argos could identify who was talking and discovered that men and women appreciated different aspects of the digital stores. The data found that men showed a higher level of positivity to the new technical features of the stores for example the instalment of the Ipads, and women on the other hand appreciated the new approach to customer service and how this improved their in store experience.

Feedback

The insight from Brandwatch also found that customers missed some of the old elements of the store, such as the catalogues. Argos has responded to this feedback and has given the stores catalogues to keep behind the desk, for those customers who miss the familiarity.

“We are planning future digital store roll-outs and we’ll be using Brandwatch Analytics to track every step of the way”

James Finch, Customer and Digital, Insights Manager. Argos

Related Articles

Brandwatch claim that 96% of customers consider their services a worthwhile investment. (Brandwatch, 2017).

Read here their 9 Social Media Data Analysis Steps for Marketing Intelligence.

9 Social Media Data Analysis Steps for Marketing Intelligence 

What we can learn

• Social insights offer valuable information and data for a company, and gives them a clearer and more accurate sense of who their customers are
•  Companies can make informed decisions and implement changes based on feedback

References

Brandwatch. (2017). Services. Available: https://www.brandwatch.com/customer-success/. Last accessed 10th October 2017.