Problem: You Can't Manage What You Don't Measure
In a world of product proliferation, how do consumers make the most informed decisions - and how do companies stay on top of the best ways to serve and market to their customers?

Online retailers must learn to harness an enormous breadth of new technology platforms that engage consumers, and make them work to their competitive advantage - with a measurable ROI.

Solution: ASP-based Social Commerce
BazaarVoice sits at the intersection of social media and sales generation, providing a social commerce platform that inherently relies on customer engagement to generate content in the form of ratings, reviews, stories and customer Q&As. This content, which BazaarVoice fully manages for its clients, is then used on customer websites, advertisements, in-store signage, circulars and even product "collars" to help consumers make more informed and rewarding purchasing decisions. Companies ultimately benefit through increased sales and customer satisfaction levels.

According to Hurt, "Customers talk to each other every day about the movies they love, the books they love, the products they love, and there have been many ways to try to get at that information, including focus groups. But what you're seeing online is a reflection of word of mouth, in a digitally archived format, which is incredibly powerful - it's testimonial-grade content without the taint of a testimonial."

Word of mouth isn't always flattering, but BazaarVoice has documented that even negative reviews drive higher in-session conversions than positive reviews because the consumer appreciates candor. Companies with high product return rates often find, after deploying BazaarVoice applications, that there is a direct correlation to low consumer ratings.

In addition to the technology infrastructure and expertise that encourages and digitally archives customer feedback, BazaarVoice also provides the moderation. Meta-tags are applied to the content to increase search engine optimization scores. Content is also monitored according the rules of engagement which prohibits fraudulent activity. This is accomplished primarily through a workforce of stay-at-home mothers - but what they miss in monitoring, brand advocates will catch.

According to Hurt, "The reason we've grown so fast is because this works. PETCO is a great example; they launched a top-rated products path on their website where you can get to the top-rated dog leash that's made out of nylon. The path didn't exist before and those that take it have conversion rates 50% higher than normal and spend over 60% more per order."

Named Vendor of the Year by PETCO; Marketing Innovator of 2006 by ClickZ, the largest online marketing community; and one of the top 100 start-ups in North America by Red Herring, BazaarVoice is, according to Hurt, on a tear. "In every category where word of mouth plays a role, that's a category where you'll see us - either today or very quickly," he says.

Q&A with Brett Hurt, CEO, BazaarVoice

Q: Clearly retailers like Wal-Mart or Amazon have some interest in having completely objective reviews. But when it's your own product or your own service, what do you do when the "one-stars" start rolling in?

A: We actually know that negative reviews drive a higher in-session conversion than positive reviews, because they hit people so hard to say, "Wow, OK. I now trust the positive content on this site." The chances of you leaving at that point are pretty unlikely. So go to Bank of America and look at their Bill Pay reviews. You can sort by most negative; you can sort by most positive. We also have the notion of featured reviews, which always appear at the top, and we hand-select those when we're reviewing this content. But it is very important to be transparent, and again, you have nothing to lose, because this content's going to be out there anyway. The content is going to exist, and the opportunity is to have it be much more voluminous in your site.

If you have serious issues with something, then you should expect some negative reviews. If a company is in a death spiral, we're probably not their best choice. But if they're a growing, healthy company, they have a lot of naturally occurring, positive word of mouth, and we're going to be a reflection of that.

Take Geico - they've got well over 2,000 reviews now, in a few weeks, with no promotion to get people to write it, and they get a 4.5 out of 5. Now, you know, you could say as a marketer, it should always be a 5 out of 5. But we don't live in that world, and everybody knows it, and it's OK. It's so powerful for Geico now, as compared to their competitors, because their competitors don't offer this. So if you are the person that shops that way for something, and you've ended up on a Geico page because of a search engine result that drove you to that content, your chance of converting at that point is really, really high, because you're in an environment now when you know that they're transparent, and you can trust them.

Q: What's your revenue model, pricing, packaging? Also, what about relevance? What about guerilla marking people who come onto the site, and they're really promoting something else, or competitors that come in and try trash you? How do you handle that?

A: The rules are posted upfront on what content we'll post and what won't. And we moderate based on those rules, which are client-configured. So when we do an engagement with a client, they say, "This is the type of content I'll allow, this is what I want.- Again, it can't be a rule that says, "Any one or two star, don't show it," because that's going to blow up in their face, and we don't want to be associated with that, and I wouldn't recommend that at all. We do catch fraudulent reviews all the time. It's a very small problem. It gets press when it is a problem, like the hoteliers have been kind of hammered on this recently. But it's less than .1% of all review volume. Because again, the brand advocates will overwhelm them. And the people that come in, where we do miss it that it's fraudulent, you'll actually see [other customers] respond to them, either if they're trying to be too negative or too positive. Like the 5-star reviews in our system, a lot of times they'll say, here's all the benefits, but I really wish it did x, y z; you're never going to see manufacturer write a review of their product and say, I wish it would do x, y or z.

As far as the pricing model, we are an ASP, we sign typically one- to three-year contracts with clients, and it's volume-based and product-based, so based on the amount of volume that we expect, and again, it is pretty formulaic at this point, we know how much volume we'll get for our business based on the number of metrics we get for them. And then the products they buy. So if they just start out with reviews that would be at one price - typical pricing for large brands is about $20-50,000 a month - because we know that they'll get content and a lot of traffic. And we're actually hosting this content on their sites as well, so we're incurring all the costs for that.

Q: You started your dialogue talking about dish soap. I was just curious as to whether that was a consortium of companies, or was it a specific company?

A: It was Procter and Gamble, dawn-dish.com, the site for Dawn dish soap. It's really interesting that you asked me about that, because Dawn now is rolling out a campaign in stores where around the collars of the dish soap are going to be summaries of the reviews, and, "Please go to dawn-dish.com to read and write reviews." And it's got phenomenal ratings, as you would expect, as that's been a very successful product. We also have five other Procter and Gamble brands that we're rolling out really aggressively across their category right now, they spend $8.4 billion on advertising a year, and this is a very high-leverage activity for them that could get integrated for that.