Take It From Someone Else

I belong to several message boards that focus on various aspects of advertising, marketing, and the Internet. Often, I’ll get fodder for this weekly column from these forums.

No one’s had much to say the past couple of weeks. Blame it on the holidays. Chat is at a minimum. It’s been conversational, void of industry-related jargon. iPods and wireless devices are being cited as the holiday gifts of choice. No one’s throwing around the usual abbreviations and buzzwords: CPM, CRM, B2B, B2C, m-commerce, IM, and the like.

The void is refreshing. Some days, I just can’t keep up with all the input from my colleagues in the industry. Who better to bring out the hot topics, sore spots, and humor in our industry than our peers? I belong to a target business audience and am heavily influenced by what others have to say.

In this vein, one marketing topic raised during the holiday lull is testimonials. How many times have you read an article because a colleague forwarded it to you? Eaten at a restaurant because a friend insisted you had to try it? Not to mention all those message boards I belong to — they’re packed with testimonials.

I asked several colleagues for examples of testimonials in marketing. Most couldn’t think of any. After a moment, they’d cite Amazon. Good ‘ole Amazon certainly was among the first to implement this marketing tactic online. User reviews are among its most popular features. Who buys a book or DVD without a little insight or a user review?

Even site links and affiliates have become a form of testimonial. Toys “R” Us is one example. Some consumer sites, such as Epinions.com, are driven by user reviews and opinions. Even blogs are often a form of testimonial marketing.

Want a fancy acronym for using testimonials in marketing? Hate to burst your bubble, but it’s plain old viral marketing.

A while back, Jupiter Research (a unit of ClickZ’s parent corporation) conducted research on e-tailers. The theme was keeping customers happy and coming back. It found most e-tailers ignore users’ needs, and many ignore client/customer referrals altogether.

We all want loyal customers. Jupiter found companies that take viral marketing and customer satisfaction into account when identifying loyal customers can reduce customer acquisition costs by 27 percent and increase average order sizes up to 60 percent. Yet, most don’t do it.

Jupiter found the overall problem was quite simple. Most companies define customer loyalty too narrowly or turn a blind eye toward customer behavior:

• 45 percent of online shoppers choose e-commerce Web sites based on word of mouth.
• Only 7 percent of companies implement tools allowing them to identify “viral influencers” via email pass-along rates (e.g., “forward to a friend”).
• 63 percent of businesses define loyal customer segments and the value they place on those relationships by customers’ spending habits and order values.
• Only 13 percent of companies use customer-satisfaction scores.

“Most companies are not tracking their customers’ behavior adequately enough to understand customer loyalty,” says Jupiter analyst David Daniels.

Research firm Taylor Nelson Sofres (TNS) found 98 percent of satisfied users would recommend a site to someone they know. Only 1 percent of dissatisfied users would do the same.

Simple data such as click-streaming allow us to determine the path a user takes on a given site. Don’t just read the data. Take a closer look at time spent in given areas. Try to determine a user’s chosen path. Did she skip entirely a content-related area you thought was critical? If so, why? Consider refer-a-friend links in your content or advertising. Promotional discounts work well in this case.

Surf some sites offering user testimonials and look at how many people post thoughts and opinions. Is this media your company should be a part of?

Bottom line? People will talk.