CompUSA turns product reviews into customer insight

Using a hosted application, the computer retailer is using reviews to increase loyalty and improve its site.

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While e-commerce heavyweights like Amazon.com and eBay have pioneered the use of customer reviews that not only provide unbiased product information to site visitors but valuable information to the company as well, not everyone has the same resources to put into such an effort.

Even Dallas-based CompUSA Inc., with more than 240 retail stores, turned to outside help in getting its online customer review program up and running.

"We wanted this type of functionality for quite a while," said Steve Fernandez, analytics and business development manager for the company. "It's always been a challenge of how to staff it and establish ROI with reading and policing the entries. The outsourced model was very appealing to us."

Last October, CompUSA launched an application from Bazaarvoice, an Austin, Texas-based company formed nine months ago by Brett Hurt, one-time CEO of Web analytics vendor Coremetrics. Bazaarvoice hosts the application, provides a team of readers to check the reviews to ensure they follow established guidelines and offers actionable analysis on the content. Plus, the online reviews improve search engine performance, Hurt said. @18012

CompUSA has seen some impressive early results. Customers who came to CompUSA after finding a review on AOL, Google, MSN and Yahoo! had a 50% higher conversion rate and spent an average of 20% more per order than the typical CompUSA visitor.

"Reviews are critical [to online success]," said Bryan Eisenberg, co-founder of Future Now, a New York-based e-commerce consultancy. "Most sites do a pretty poor job of giving enough information to the customer to make a purchase. Less and less people are trusting organizations for their product information -- the BS levels are a little higher."

CompUSA launched the application fairly quickly and bug-free, Fernandez said. Visitors to the site are asked to provide some information about themselves and follow certain guidelines, such as don't make reviews time sensitive or provide information that won't apply to all online users. A complaint that "the salesman in the store was rude to me," isn't helpful to others, Fernandez noted.

"It can be a negative review certainly, but we don't want a belligerent review for the sake of being mean and nasty," he added. "We value customer's opinion especially when it's negative."

Accentuate the negative?

Bazaarvoice provides a community manager for its customers to help identify trends in reviews. CompUSA has been able to take some of the reviews to its suppliers to convince them to change product specifications or update the photos they include. One customer suggested that CompUSA retail stores provide a memory device with a common image for people to use when evaluating printers. That is under consideration, Fernandez said.

Other Bazaarvoice customers are using the reviews in their outbound marketing. Petco Animal Supplies Inc., the San Diego-based pet supply store chain, highlights some of the top-reviewed products in its e-mail marketing, said Sam Decker, vice president of marketing and products for Bazaarvoice. Petco also feeds some of the negative reviews to its customer support staff to follow up.

Bazaarvoice also offers functionality to segment customers and align people with similar buyers. For example, Golfsmith, the third of Bazaarvoice's initial clients, asks reviewers to share their gender, level of play, how often they play golf and where.

Many of their clients and prospective clients are initially fearful of negative reviews, Hurt, Bazaarvoice's CEO, said. Yet, the results have shown more positive reviews than negative and help customers polarize their decisions. "They're truly letting customers sell the product for them," Hurt said.

"For a product that just launched I'm extremely impressed," Eisenberg said. "Tying it into the analysis, that's the key. Beforehand [reviews] weren't anything actionable. You can see with the search engine results that all those pieces are showing up because of the careful consideration in creating this."

Reviews by the numbers

CompUSA's reports are mainly numerical so far, showing figures like the number of reviews and conversions, but Fernandez is looking forward to deeper analysis. The conversion rate is one of the real benefits of community reviews, according to Bazaarvoice. Users who contribute reviews visit a site nine times more often than average users, remain twice as loyal and buy twice as often, according to a Jupiter Media study from 2002.

Pricing for Bazaarvoice's application and service starts at $2,000 per month on a relatively small site and scales with page views and order volume. However, it is usually less than hiring one person to create and check reviews internally, Hurt said.

For now, it is homegrown applications that are Bazaarvoice's biggest competitor, but Eisenberg and Bazaarvoice itself predict there will soon be others offering similar services.

"There's really something powerful to this," Eisenberg said. "It's cheaper to get customers to generate media than it is to do it yourself."

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