Customer Ratings

This research brief will answer the following questions:

1. What are customer ratings?
2. How can customer ratings impact your conversion rate?
3. Why should you view customer service as a marketing expense?
4. What are the best ways to increase your customer ratings?
   (11 key techniques)

1. What are customer ratings?

Customer ratings are a customer feedback mechanism used on many online shopping sites, such as Shopping.com (DealTime), BizRate, Yahoo! Shopping, Amazon.com, and eBay.

Consumers are given an opportunity to rate their shopping experience with an online store, generally after they have made a purchase with that store. These “votes” (usually one to five stars) are then tallied and averaged to determine the overall rating for the store. This rating is then shown alongside the store’s name or product information in order to help future customers make purchasing decisions.

Simply put: High customer ratings will encourage future sales while low customer ratings will have the opposite effect.

2. How can customer ratings impact your conversion rate?

To gauge the impact of customer ratings on a website, we measured the conversion rate before and after a new test site received a rating on Shopping.com (DealTime). The “before” numbers were generated with a rating of “no rating”, while the “after” numbers were generated after our test site had been given a five-star rating.

Here are the results 30 days before and after the ratings increase:

The impact of the ratings increase is even more obvious if we look at the 15 days before and after the increase:

It is clear from the tables above that the five-star rating had a significant impact on our test store’s conversion rate on Shopping.com.

3. Why should you view customer service as a marketing expense?

Keeping in mind the significant impact that customer ratings can have on conversion rate, we now ask you to make a simple shift in how you perceive customer service.

KEY POINT: If customer service can have a direct, causal impact on your conversion rate, then it should not be viewed as a basic cost of doing business, but should be considered part of your marketing expenses.

Customer service can be leveraged in multiple ways to create value for your online store:

1. As shown above, ratings will have a direct impact on the amount of sales you are able to make through comparison search engines and other sites. Customers will shop with more confidence if your ratings are high.
2. In addition, some comparison engines will rank your store higher in search results if it has higher ratings than its competitors. This can bring you more traffic from these engines (in addition to increasing conversion).
3. You can also incorporate your ratings onto your primary website as an additional third-party credibility indicator. For example, if your Yahoo! Store or Amazon ZShop has a five-star rating, you can include this rating on your primary website. Potential customers familiar with Amazon or Yahoo! Shopping will feel more comfortable shopping with a merchant who is a trusted associate of these brands.
4. Customer reviews and feedback can be used as testimonials, providing yet another credibility indicator. Customer ratings often provide customers a chance to leave a text review in addition to the numerical rating. These reviews are an excellent source of customer testimonials that can be incorporated into your site at strategic locations.

Through intelligent techniques like these, your customer service will not simply be a way to retain old customers, but will also become a means of acquiring new customers and of increasing average customer value.

4. What are the best ways to increase your customer ratings? (11 key techniques)

1. Focus on personal, top-notch service. Excellent customer service will pay large dividends for your business, in terms of repeat sales and recommendations, as well as customer ratings.
2. Include direct links in your shipping emails that include FedEx or UPS Tracking numbers. This is a key service feature that is more likely to receive a top rating.
3. Solicit feedback and ratings from individual customers. Craft a well-written email that politely asks for customer ratings.KEY POINT: If this email can be timed to be delivered on the same day or the day after the package is received, it will improve response rates and will be more likely to receive a good rating.
4. If you receive any negative ratings, respond immediately to the customer, either via email or through the comparison site. Many comparison sites allow “seller” comments (which should be used for EVERY negative comment) and “rebuttal” comments (for potential ratings fraud).If you see that a customer has given your store a poor or mediocre rating, you can contact them and try to address the issue which resulted in the unfavorable rating. If you can correct the problem, some sites (notably Yahoo! Stores) will allow a customer to replace his or her unfavorable rating with a more positive one.
5. Give your customers an incentive to provide a rating by offering a coupon or discount on their next order. It’s important to note that you are after honest responses; don’t use your incentives to solicit (only) positive feedback. You can also use this technique to generate repeat purchases.
6. Utilize surveys and other feedback methods to improve customer service. Stay engaged with your customers at multiple points in the customer cycle to stay in touch with their unique needs.Many comparison shopping sites have “exit pop-ups” to increase the number of ratings submitted. Some even allow you to run multiple pop-ups to rotate and test your most effective copy.
7. Focus particular attention on performing well on your first four to five customer ratings, since most sites require this many responses before they will give you an actual rating. Without a rating, many potential customers will be hesitant to make a purchase with you.
8. Don’t let your ratings slip. Once they do, you will be fighting an uphill battle to get them back into the four-to-five-star range. A disgruntled customer is much more likely to take the time to rate you than a satisfied customer. Only when you work hard to increase your ratings and serve your customers well will you receive a steady flow of positive reviews.
9. Review the ratings guides or FAQ’s on the individual ratings platforms (Yahoo!, Amazon, comparison search engines, eBay, etc.) to optimize how you interact with customers on each platform. We have listed many of these in the Literature Review, below.
10. Utilize as many ratings services as possible. These include comparison search engines, online stores like Yahoo! and Amazon, and auction sites like eBay. We have listed reports on many of these topics in the section of Notes, below.ResellerRatings.com is a popular and important third-party ratings service. Also, BBBOnline does not provide customer ratings per se, but it is another valuable third-party credibility indicator.
11. Consider implementing an e-CRM (customer relationship management) solution to streamline your customer service processes. We have included a number of e-CRM resources in the Literature Review, below.

By implementing the techniques above, your online store can benefit from the increased conversion rate that often accompanies improved customer ratings. In the process, you will also improve your overall customer service, which will have an additional positive impact on your business.

[*1] The primary cause of the traffic reduction was that the test occurred during one of the company’s two annual sales peaks. The ratings activation occurred on the late edge of the 2-3 week summer traffic/sales period and the “after” period was during the natural seasonal decline. Historically, conversion rate is consistent throughout the peaks. The click-cost was constant throughout the entire test period so the gross increase in orders translates to a significant reduction in Cost of Sales and a corresponding boost in ROI.

Related MEC Reports:

http://meclabs.com/cgi-bin/pl/pl.cgi?mam

Comparison Search Engines Tested:
http://meclabs.com/cgi-bin/pl/pl.cgi?mcs

DealTime Tested:
http://meclabs.com/cgi-bin/pl/pl.cgi?mdt

Yahoo! Store Changes Tested:
http://meclabs.com/cgi-bin/pl/pl.cgi?myc

eBay Basics:
http://meclabs.com/cgi-bin/pl/pl.cgi?meb

Landing Pages Tested:
http://meclabs.com/cgi-bin/pl/pl.cgi?mlp

Order Process Tested:
http://meclabs.com/cgi-bin/pl/pl.cgi?mdr

Order Recovery Tested:
http://meclabs.com/cgi-bin/pl/pl.cgi?mor

As part of our research on this topic, we have prepared a review of the best Internet resources on this topic.

Rating System

These sites were rated for usefulness and clarity, but alas, the rating is purely subjective.

* = Decent | ** = Good | *** = Excellent | **** = Indispensable

Improving Customer Ratings for Better Yahoo! Search Shopping Results ***
http://www.bock.com/newsletter43.html

Yahoo! Store – Customer Ratings **
http://meclabs.com/cgi-bin/pl/pl.cgi?sys

Shopping.com Merchant Program FAQ **
http://merchants.shopping.com/welcome_faq.html

BizRate Ratings Guide **
http://www.bizrate.com/ratings_guide/guide.html

About BizRate **
http://www.bizrate.com/content/about.html

eBay Basics – Feedback and Ratings **
http://pages.ebay.com/help/basics/f-feedback.html

Using Feedback to Get Ahead on eBay **
http://www.entrepreneur.com/article/0,4621,310711—–,00.html

Are You Listening to Me?: Communicate With Customers **
http://meclabs.com/cgi-bin/pl/pl.cgi?sca

Making Your Site Feedback Friendly **
http://meclabs.com/cgi-bin/pl/pl.cgi?scf

Differentiate Yourself with Customer Service
http://meclabs.com/cgi-bin/pl/pl.cgi?scc

Turning Customer Data into Critical-to-Satisfaction Data **
http://www.isixsigma.com/library/content/c040913a.asp

21 Secrets of eBay Power Sellers **
http://auctioninsights.com/21secrets.html

What is CRM? **
http://www.crmguru.com/content/features/sims01.html

CRM Guru Community **
http://www.crmguru.com/

Customer Feedback Solutions **
http://www.custfeedback.com/

CRM Today – eCRM **
http://www.crm2day.com/ecrm/

CRM: Optimizing Relationships with Data **
http://clickz.com/experts/em_mkt/em_mkt/article.php/824091

CRM: A Way of Thinking About Customers **
http://meclabs.com/cgi-bin/pl/pl.cgi?scr

Credits:

Editor — Flint McGlaughlin

Writer — Brian Alt

Contributor — Jimmy Ellis

HTML Designer — Cliff Rainer