October 07, 2014

Ecommerce Research Chart: How reputation affects success (and 5 ways to improve it)

SUMMARY: "Your reputation precedes you."

Nowhere is that saying more true than in ecommerce.

Use the data in this week's chart as justification to get the budget you need to help improve the reputation, and ultimately the success, of your ecommerce company.
by Daniel Burstein, Director of Editorial Content

For an ecommerce transaction, trust is essential.

While ecommerce has grown significantly, it still requires more confidence for a customer to purchase from an online retailer (where the value of the product and reliability of the store is conceptual) than a brick-and-mortar retailer (where customers can touch and feel a product and take it home instantly).

We wanted to test this theory and see how reputation affects overall ecommerce success. In this MarketingSherpa Ecommerce Benchmark Study survey, we asked:

Q. How does your company compare to your competitors in the following?

One of the elements we asked about was reputation.

We then correlated this data against the respondent's median weighted success score. The weighted success score was created by Dr. Diana Sindicich, Senior Manager, Data Sciences, MECLABS (parent company of MarketingSherpa). It includes factors such as financial metrics (e.g., year-over-year difference in annual and ecommerce revenue), and you can read more about these metrics on page nine of the Benchmark Study.

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Click here to see a printable version of this chart

We found that the better a company's reputation was, the more likely that company was to be successful.

For example, of the respondents who said they had a "better-than-average" reputation, 52% had a success score between six and nine and 25% had a success score above nine (the highest score of any respondent was 14). Only 2% of companies with a better-than-average reputation had a success score below three.

If you've been trying to gain the resources and approval to improve your company's reputation, you can use this chart as part of your justification for increasing your budget and bettering your customer service.

Not sure what you can do to improve your ecommerce site's reputation? Here are five ideas to get you started.

Idea #1: Better serve customers

This is the most important factor that affects your reputation because, without any previous interaction or a trusted recommendation, your customers literally have to guess what your reputation is and how well you will serve them. Here are a few articles with information to help you better serve your customers:

Marketing Intelligence: 3 ways to better serve your customers (and your bottom line)

Ecommerce Research Chart: Does customer responsiveness correlate with success?

Competitive Messaging: Tell your customers what you can't do

Idea #2: Encourage customer reviews

One of the ways customers learn about your site's reputation is through online reviews. You can get better online reviews by doing the first thing mentioned in Idea #1 — serving customers better.

But once you've done that, encourage customers to share their positive experiences through online review sites.

While there has been some backlash against online review sites by ecommerce marketers — for example, one respondent to the Benchmark Study survey complained of "review extortion" and was concerned because "we rely heavily on our reputation" — third-party websites aren't the only place customers can go to post online reviews.

Host open and honest online reviews on your own site about the products you sell. This transparency will increase trust and your company's reputation. Also, customers often mention the ecommerce site's service in these reviews in addition to the product's quality.

Adding Customer Reviews Increases Conversions — Dramatically

Social Media Marketing: Focus on consumer reviews increases Facebook fans 100% for Playtex Baby

Marketing Research Chart: Data on content difficulty reveals customer reviews may be overlooked by marketers

Idea #3: Make shipping a priority

This is really a subset of "better serve customers," but it is so important for ecommerce sites, it warrants its own section.

While brick-and-mortar stores invest in a physical customer experience — from the Apple Store's patented glass staircase to green spaces and gathering places in open-air malls — the main tangible interaction customers have with your service level is how well (and quickly) the products they order arrive.

One marketer demonstrated this focus on delivery in her Benchmark Study survey response: "Plants have, for many obvious reasons, been a historically difficult thing to ship, and this presents us with likely our greatest challenge: making sure our product arrives to the customer in the same great shape our reputation is locally known for."

Of course, cost of shipping is an ever-present, top-of mind customer concern. How clear and upfront you are about shipping costs and timing affects not only your reputation, but conversion as well.

E-commerce: Edible Arrangements' extends same-day service, uses countdown ad to lift same-day orders 8%

Shipping Charges — How to Use Shipping Charges as a Marketing Tactic

Adding Inexpensive Shipping Lifts Conversions, Lowers Costs: 5 Steps

Idea #4: Interact with and help your customers

Not all marketing can be automated, nor should it be. You cannot overlook the value of human connection in building reputation, especially since — unlike with brick-and-mortar stores — there is an inherent, dehumanizing barrier in ecommerce site interactions.

Some Benchmark Study survey respondents focused on building those relationships in person and then using marketing to accentuate what they've built (content marketing can be helpful in this area), like the marketer who replied that her greatest challenge was, "Building our reputation and trust." How did she overcome it? "We spent a lot of our budget on industry expos and used the publicity to enhance our reputation."

Others turned to the pseudo-personal relationship building that takes place on social media: "Online reputation was average, but we worked on social media for that a lot."

You can't overlook the power of true human connections through customer service. When one human is helping another, that relationship can solidify your brand's reputation.

Email Marketing: Expedia Cruise Ship Centers uses data-triggered human interaction to increase bookings 81%

Social Media Marketing Human Factor: Finding the right person for the job

Why Social Media is the New Customer Service Hotline

Idea #5: Facilitate word-of-mouth

Now that you have earned that better-than-average reputation, use it. It is an asset more valuable than any piece of technology that runs your site.

One Benchmark Study survey respondent even used their strong reputation to replace marketing: "We have retail customers and wholesale customers. We do not market to wholesalers, as our word-of-mouth reputation is enough."

How Patagonia Uses Word of Mouth Marketing (Instead of Traditional Campaigns): Seven Steps

Word-of-Mouth: Email tactics power referral program with 111% ROI

Social Media Marketing: How to optimize the customer experience to benefit from word-of-mouth advertising

Related Resources

MarketingSherpa Ecommerce Benchmark Study — Made possible by a research grant from Magento, an eBay company

Ecommerce Research Chart: ROI on marketing spend

Ecommerce Research Chart: Discover your unique ecommerce success score

Do You Know How to Take Advantage of Globalization with Your Marketing?

Customer-centric Marketing: SAP drives $100 million in revenue influence with customer webcasts

Red Bull Media House’s Advice for Successful Content Marketing

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