Do Customer Reviews Increase B2B eCommerce Revenue?
Image credit - Reevoo
Our recent blogs about industrial suppliers using Amazon Business, Amazon; Friend, Foe or Frenemy to Industrial Suppliers and 2 Industrial Suppliers Share Advice on Using Amazon, threw up the recommendation to ensure industrial suppliers use online customer reviews and customer ratings to differentiate their products from competitors - "Customer reviews really can make or break your success when selling on Amazon". Also, some leading industrial suppliers already use online customer reviews, for example the W.W.Grainger and MSC Industrial websites both invite customer reviews. For those two reasons we're following up with this blog to share the latest research on customer reviews and ratings.
Why Have Customer Reviews Become Important in eCommerce?
The reason is simple – they work! If you’ve purchased much via eCommerce recently you’ve probably been asked, even pestered, to write or video reviews and give ratings on your purchases. What works in B2C eCommerce usually transitions to B2B eCommerce and so it is with 'customer reviews and customer ratings'. As you likely know from personal experience they work very effectively in B2C - think of Yelp, TripAdvisor, Angie’s List, Amazon - and many studies have shown that displaying online reviews increases eCommerce revenue.
How Much Do Customer Reviews Increase Revenue?
One study found that customers are 63% more likely to buy from sites that display customer reviews. Reevoo (graphic above) found that displaying product reviews increased online sales by an average of 18%. This 2017 study by the Spiegel Research Center reports that displaying online reviews can increase conversion rates by up to 270%. Their summary: “We found that online reviews have a significant and quantifiable impact on purchase decisions – but the degree of that impact depends on a number of factors, such as star ratings, the nature of the review content, the number of reviews, the price of the item, and the source of the review.”
As you can see, the percentages span a wide range and it's unpredictable for a particular company without enough comparable data. What we do know is that the presence of ratings and reviews, presented well, can have a significant positive impact on your eCommerce revenue.
As we've previously discussed B2B eCommerce is a far bigger revenue opportunity than B2C so it's not surprising that big B2C eCommerce players (such as Alibaba and Amazon) have entered B2B too and that has accelerated the trend of B2B websites becoming more like B2C websites. B2B is bigger partly because B2B pricing is often significantly higher than B2C pricing and it turns out that customer review importance and usage goes up with the price!
Are Customer Reviews As Important in B2B as B2C eCommerce?
The answer is YES. B2B customer reviews are a product research priority for 49% of buyers according to this 2018 B2B Buying Disconnect research by TrustRadius into B2B purchases of technology products. Product demos remain the #1 information source for B2B customers, but user reviews moved up to #2 this year (vs. #5 last year). TrustRadius says, “Buyers are still interested in what analyst[s] have to say, but ultimately they want to hear from people like themselves. Their peers and others users are more relatable and provide a trusted view into what it is like to actually use these complex technology products”. TrustRadius also reports that, “B2B buyers want feedback, but they are also open to sharing feedback to help their peers. 84% said they would be willing to share their perspective with other buyers. Overall, 22% of buyers have written a review, 14% have served as a reference, 11% have provided a testimonial and 9% have participated in a case study.”
Why Do Customer Reviews and Customer Ratings Work?
As discussed here today’s buying process is often 70% over before buyers even talk to your salespeople. Buyers do their own research online. Assuming they find your website and product detail pages, those pages need to elicit trust in your product and brand. What could be better for achieving that than customer feedback from people in similar roles or similar needs? Isn’t that the best differentiation from competitors? You can’t change their buying process but you can make it more effective for them and at the same time make it more likely your part will be selected.
Look at it from the buyers’ point of view:
- Word of mouth – remains the most potent form of marketing – even modern SEO and social media marketing can’t match the persuasiveness of a person sharing their opinion and personal experience. Reviewers are usually unknown to readers but if authentic are accepted word-of-mouth proxies for acquaintances, friends and family.
- Customer Experience – Your success is dependent on your customer’s success. Most B2B product pages focus on features and functionality, price and availability. Even if they have testimonials and case studies they often put them on other pages! The addition of ratings and customer reviews gives buyers insight to your overall user experience. They can see the success ratings of your customers and you get affirmation that your parts and ordering process are delivering value or need attention.
- Minimizing risk – the higher the cost or the commitment to the part (if it will be built into their product) the more they will want to know from others that they will be getting exactly what they need. Ratings and customer reviews can provide authentic third party validation that saves buyers time – buyers can see if problems have surfaced and how they were dealt with, the more helpful you can be the more likely your product will be chosen by new prospects or retained by current customers.
- Transparency builds trust – intuitively we might assume a bad review will drive customers away but this isn’t always the case. This research has found that “68 percent of consumers trust reviews more when they see both good and bad scores, while 30 percent suspect censorship or faked reviews when they don’t see anything negative at all..” Many negative reviews will likely hurt a business, one or two can actually confirm your transparency to buyers.
Here are our recommendations for B2B Industrial suppliers (manufacturers and distributors):
- Collect and publish authentic B2B customer reviews and ratings. These are now important and expected pieces of information for buyers and suppliers that choose not to publish ratings and reviews risk losing customers to sites that do. Get started by requesting reviews from customers - the TrustRadius research says 84% of those surveyed would provide reviews - but few B2B companies are asking. After a buyer has purchased your products, allow them time to evaluate how well it is working for them and then send a request for a review so you can gather feedback to help improve your products. Start with higher value products then products with lower than 5 reviews till all products have at least 5 reviews. Encourage customers to write detailed reviews. Longer reviews are more useful and influential for customers and SEO so gently nudge customers to write longer reviews for example by having a minimum word count, and adding extra fields to capture more information. See Reevoo’s methodology for collecting reviews and see their success metric in their chart below, especially for Manufacturing and Automotive. Ensure your reviews aren’t out-of-date, for example, applicable to a previous version of the product and keep obtaining new ones.
- Don’t waste prospects time with fake or shallow reviews – only use 100% authentic and unbiased reviews or risk damaging your brand! This 2017 study shows 79% of surveyed consumers say they’ve spotted a fake review in the past year though 84% concede they can’t always recognize a fake review. Therefore prioritize reviews from “verified buyers” over anonymous ones and let users create the order in which reviews are presented (look at Amazon’s ‘was this review useful’ query).
- Respond quickly and openly to negative reviews. Including negative reviews may seem counter intuitive, but up to a point they can have a positive impact by establishing credibility and authenticity. Prove transparency, take it as a challenge to so satisfy the customer that they later adjust their review or rating. At minimum, transparently demonstrate your brands commitment to customer satisfaction.
- Reward reviewers. Don’t pay for reviews because that would undermine authenticity and transparency but do incentivize, for example, with entry into a prize draw or a discount coupon. Recognize that a motivator for reviewers can be building their own social capital or professional reputation as a knowledgeable source of information. For example, a Journal of Consumer Behavior study says, "the individual's need to belong and the level of self-disclosure increase their probability of engaging in positive [word of mouth] behavior...[this] fostered a desire to talk to others about a preferred brand.
- Give B2B buyers all the info they need on each product in one place – on each of your part detail pages - part descriptions, pictures, CAD models, CAD drawings, customer ratings, customer reviews, how-to videos, links to case studies, testimonials, everything in one place for ease of access!
At CDS we review and share all available research, like these reports, as we continue to develop our industrial marketing technologies and services to help B2B industrial suppliers succeed with online marketing and eCommerce. As always, please share your comments below or, if you'd like our opinion on your B2B eCommerce plans, please call us or click either button below: