You Should Know What Happens Before A Customer Call

customer call

Before a customer call, they have used a path your business carefully constructed to get them there, all those digital breadcrumbs have a purpose and can create quick but meaningful conversations. It’s vital to not waste the resources you placed to manifest a potential sale.

Their context matters

The digital context for each visitor is the culmination of their online journey, it includes all their digital interactions up to the point of contact with a company – clicks, searches, Google Ad words, etc.

In this case, contact means the second they call. When that connection is made, it’s vital for the agent on the other side of the call to understand the path taken by this customer to get to them. You can do this by understanding your customer’s digital context.

Today’s caller/browser/internet ninja simply wants an automated, easy experience because that is what they are used to.

Users are just more agile and they expect companies to follow suit especially when the cost is high. Complex purchases require potential customers to heavily research a product’s intricacies. For example, over 95% of automotive buyers do their information gathering online before they visit a brick and mortar dealership.

Taking advantage of all these digital micro-moments leading up to that coveted face to face meeting can create an easy experience both online and offline. What a pleasant surprise that would be for a customer when they find out you’re already an expert on what they want.

Know the acquisition source

Acquisition source is the touchpoint someone comes from when they enter your brand realm, a lead could arrive from organic search, PPC, direct traffic, referral website or a print advertisement and use an array of devices to reach out.

It’s really important to know this information because it can help stakeholders save a lot of money. By measuring multi-channel traffic, it’s easier to know where to invest the most and the least.

It’s not all about the chatbot

Despite the multiple predictions, chatbots are not replacing human agents – yet. They are useful, but more for uncomplicated questions, quick notifications and routing callers to the right agent.

According to a study by PWC, “75% of global customers “want to interact with a real person more as technology improves”.

Before a call, it’s easy to turn off a customer if the chatbot is a dominant factor. Bridging human interaction seamlessly is where a chatbot can be useful but the emphasis [and money] should be on improving the skill set and knowledge of an agent before pumping funds into AI services that step further away from human connection.

Via: PWC, Think with Google.

What Customer Data Can Do For Dealerships

data

The dealership is the final stop on the purchase journey for an automotive customer but the experience usually begins in a third-party environment. Most customers aren’t willing to endure the long purchase process dealerships offer on the ground. A study by Cox Automotive found that dealerships scored a 46% satisfaction rate for how long the final purchase process takes.

“Despite billions spent by OEMs (brands) and dealers on modern showrooms, slick mobile apps, and armies of social media managers, the human element —the last mile of the customer experience—is keeping consumers away from dealerships and crippling the auto industry,” writes Lior Arussy, CEO of Strativity Group for Dealer Marketing Magazine.

Aligning the human workforce with the digital experience comes down to how the scores of customer data streaming in and out of dealership management systems are utilised and how ready sales teams are to use this to their advantage.
Dealerships have a lot on their plate, often one dealer is managing multiple car brands, leads can get lost in the ruckus. At times customers walk in unannounced and dealerships are ill-equipped to meet expectations.

Therefore the human element can be improved by auto brands both acknowledging the needs of an empowered customer and equipping their teams to handle multiple interactions. It’s not just about gut instinct and talent anymore, data is there to be used and the dealerships that fail to modernise will fall behind.

This is where a data-driven (pardon the pun) approach comes in handy. Here are a few ways to apply customer data to improve the dealership experience.

Collect data!

Gauging a potential buyer’s digital context is the first step to a more complete understanding. How did they get there? Was it a dealership group landing page, a PPC ad via Google or a banner ad on a news centre like the Guardian website. Round up the context with the product itself, i.e., the car make and features. When all this data is collected, the context is complete. Customers that call or arrive from online forums are the easiest to track with the right technology, walk-ins can also be recorded into the CRM using registration forms or geofencing.

Profile and segment

After data is organised into profiles, it can be segmented and prioritised. Say one particular caller is interested in a luxury model, they would be placed in a higher value segment due to their increased CPA (cost per acquisition). Prioritising these callers based on aspects such as; location and car brand helps dealerships utilise their time and expertise better, in addition to improving customer experience and pick up rates. This kind of process is important for dealerships that sell more than one car brand because callers are assigned to a specific salesperson who has extensive knowledge of a particular model.

Dealerships Solution

Finally, data doesn’t have to be scary

For dealerships who are wary of the huge undertaking that comes with overhauling a legacy system, there is a silver lining. Integrations! These are useful because they are able to pass incoming data into an existing DMS (dealership management system) and make the process of change less jarring for auto brands and their vendors.

Via: Dealer Marketing Magazine 

Phone Calls: How To Close This Gap In Lead Management

girl on phone

Phone calls are arguably the black hole in lead management. Why? Because calls are now the highest converting lead source for most businesses, yet a large number of companies are still putting funding into digital advertising without an idea of how these investments are bringing in leads. According to Gartnerout of 14 categories of marketing activity, 65% of marketing leaders surveyed told us they plan to increase their spending on digital advertising.”

The fact remains, customers will close a sale when they are ready, not when the company is ready to sell to them. When they do call, that interaction is more likely to result in a sales lead than relying on web marketing alone.

It’s not that the marketing isn’t working, it is…phone numbers are being dialled and click to calls are initiated as a result of marketing efforts. Proving the ROI of this ad spend is where many brands are at an impasse. The ability to accurately measure campaigns is the goal of most marketing teams and yet the hole is there, how do you measure offline interactions and manage the leads that come from them, especially phone calls?

Understand who the lead is going to

When multi-locational brands like those in the automotive sector send qualified leads to their vendors, the expectation is that follow up is immediate. Not always, it can be difficult for brands to trace the customer journey when they leave the brand website. Using workflows can set up a lead nurturing protocol for vendors so that calls are not missed and brands have full visibility of every step.

Call data is gold, use it

Seriously. Stream call data into software that can meld into an existing system. It’s easier than it seems. With this data, build digital profiles for customers to create personalised experiences for every caller and help sales teams understand exactly who they are selling to – resulting in higher conversion rates.

Infosys found that 59% of shoppers who have experienced personalisation believe it has a noticeable influence on purchasing. Despite the stats, there is a startling lack of investment in personalisation technology, according to Pure 360 via econsultancy, “38 per cent of companies are not undertaking any personalisation.”


Calling customers aren’t going away anytime soon and despite the advances in communication technology, large purchases still need the cushioning of a good conversation. Technology is accenting this process with features that make it beneficial for both ends of the line. Fill the gap by paying attention to who’s calling.

Via: Gartner, Pure 360.

5 Common Mistakes Made When Updating Call Centres

call centre mistakes

In customer-facing businesses, when a prospect decides to call, it’s usually because they are looking for help and an informed voice on the other end. Call centres that can meet these requirements need the software that can keep up with modern expectations. Some companies outsource their call centres, while others are moving towards communication technology that keeps everything in-house. But when updating call centres with new systems, what are major mistakes to look out for?

1.Too hard to implement

Revamping an existing platform that has worked for decades can be harrowing, but sticking with legacy systems can also push a company’s customer service back in time. Finding a middle ground where the new software is easy to learn and makes change seamless is the goal, don’t look for the hottest package on the market and expect miracles. It could all end in tears.

Starting with integrative software is a great way to inch into new territory for brands and their call centre teams. Find programs that act as middlemen – streaming call data into existing CRM systems.

2. Doesn’t remove data silos

The bane of most modern call centres is too many data silos. The latent and real-time caller data that streams into call centres have significant value but it needs to used and not stored for a rainy day. According to My Customer via SAS, “only 23% of companies — less than 1 in 4 — are able to generate real-time insights with customer data.”

The technology is out there with routing, profiling and prioritising capabilities that paints an entire picture of data impact on ROI and company development. Use it.

3. Thinking more IVR means better customer service

Nope. In no way does adding more IVR to a call queue make it better. Customers don’t want to wait to speak to a service representative for ages, it’s a guaranteed way to lose prospects. “At the beginning of a customer service experience, 90 per cent of our respondents want to speak to a live agent,” says The Conversation.

4. No remote option

Modern contact centre software gives agents the opportunity to work remotely. This is helpful when considering the impact of the global community on business development, our borders are definitely blurring. If needed, using agents from all corners of the globe remotely under the umbrella of a unified system can improve personalisation by breaking language barriers. Don’t send a non-English speaking customer to an English speaking agent. Route calls to the right agents wherever they are.

5. Not using the right metrics

Focusing on how every agent is managing a call isn’t always the best use of data. There are multiple signifiers of how to better the call experience. Luckily platforms offer dashboards that reveal the intricate elements of call. Metrics like call through rate, call duration and missed calls can point to more than just a lack of good customer handling, rather how the brand can improve the entire customer journey through better marketing, targeting, and nurturing.

Improving training for agents is always good, but optimising the caller journey can also make an agent’s job a lot easier and more fruitful.

Need more help?

Via: The Conversation, My Customer.

7 Ways To Have An Impactful Conversation With Your Consumers

These days, consumers arrive from an array of digital channels during the path-to-purchase journey, but more often than not there is a moment when human interaction is necessary, especially when something goes toes up or for larger purchases such as real estate or a car.

According to Google, “47% of those they surveyed described feeling “frustrated or annoyed” or “more likely to explore other brands” when a call wasn’t picked up. The advent of click-to-call is causing an influx of call volumes, a whopping 70% of prospects hit the call CTA.

Once the button is pressed and an offline interaction begins, the quality of conversation or rate of pick up can make or break a conversion, which is why we have a few suggestions for transforming your communication strategy that will guide your callers to the final stage of their journey and beyond.

1. Follow up

Following up is not chasing or harassment, its courtesy and can improve upsell potential. A post-conversation chat should be filled with a knowledge of the customer (based on their history) and also questions that can help gauge a greater understanding of what they want in their own words.

2. Speed up decision making

Automated workflows can speed up how a caller lands on the right agent based on their context. If a specific answer is required, understanding a prospects movements on a brand website can give the agent a headstart to finding a solution before they even answer the call.

3. Remove friction

Take away the multiple delays associated with IVR systems, no one likes friction in CX especially when the purchase is of high value. Remove pain points for callers by cascading or sending them through a quicker route to the conversation they really need to have.

4. Know the trends

Analyse, analyse, analyse. Conversations with consumers these days come with a ton of context behind them as the research phase almost always starts with a browsing history. Tracking every key measure from these touchpoints can be a useful way to understand the bigger consumer picture and make conversations less about interrogation and more about connection.

5. Understand their data

Knowing every granular detail of where/how/why a consumer has arrived at your doorstep is vital. In some cases, a PPC (pay-per-click) caller is more of a priority than someone who didn’t visit a higher value page or is just casually browsing.

6. Bring them back

B2C industries like automotive and travel know that a missed call is a missed opportunity, especially when considering their high-profit margins. If a consumer’s call isn’t acknowledged it can be detrimental to both company reputation and the bottom line. For mobile workforces, a simple solution is using just that, their mobile.

Missed call notifications in email or SMS form have a knack for dropping call abandonment rates by nearly 80% while ensuring sales teams value callers and proactively pursue them. Sending a callback request SMS to a missed consumer is always favourable on their end if a call isn’t picked up, data from Software Advice shows that 63 per cent” of consumers surveyed preferred callback.

7. Be a human!

This brings us to the last and final point of any consumer-facing conversation, be a human being! Personalisation is the bread and butter of CX lately, we may think we want to speak to robots but the need for just the right amount of empathy is currently outweighing the convenience of chatbots.

A happy medium is the best bet in this scenario, use technology to make the process of getting to the human help easier, now that’s impactful.

Via: Google, Software Advice

Our AB Tasty Integration: Get More Insights Into Your Call Data

If a better understanding of your core audience is the goal, then testing all possible options to make a website user-friendly and improve conversions is a great first step to take. Leading conversion rate platform AB Tasty is very good at helping marketers shape their strategy for driving revenue using A/B testing. The platform is one of many integrations offered by Freespee and is especially useful when it comes to lead generation and stellar insights from the call data we collect.

Here’s why we love our AB Tasty integration:

It uses a thorough testing process

Freespee’s A/B Tasty integration offers variations of a brand’s website or landing page, allowing marketers to focus on the one that encourages consumers to connect with their company the most. Pretty simple and effective.
The technology does this by creating a campaign via the Freespee Dashboard. Say a brand has discovered that a vital contact number on their landing page isn’t quite catching the eye of a user base. With the AB Tasty integration, tests are initiated with the contact number in different positions and other (bolder) formats.

Tracking ability

Specific data (AB Tasty tracking information and call time) is collected from each version of the page and both numbers are associated with this information during the test campaign. So, when a call is made from the website using a Freespee dynamic number, this call data is sent straight into the comforting arms of AB Tasty for analysis.

Detailed and easy to read results

AB Tasty keeps a record of these calls or conversions and plugs it into a thorough report showing the differences between the original and first variation using markers such as; conversions, conversion rate, improvements, reliability and actions. Voila, now it’s easier to gauge what website or landing page setup can turn users into leads!

One more awesome feature

While our relationship with AB Tasty focuses mainly on call data, the platform also offers a wide array of features we think are pretty cool, one we’re especially excited about is heat mapping.

Heat mapping

According to AB Tasty, Heatmaps are “visual representations of attention, engagement and interactions generated by your visitors as they navigate through your site.” They also look very impressive. Warm colours show the most used portions of the site while cooler colours highlight the parts that may need more attention. Actual optics of customer interaction is an immediate and strong measurement tool.

 


 

Freespee has many integrations to choose from that make working with third-party tools seamless. AB Tasty is one we wanted to spotlight in particular for its ability to increase not only lead conversions but personalisation – a major trend in CX this year. Personalisation is about paying close attention to the needs of a consumer base and adapting services accordingly. Through AB Tasty’s organised optimisation and testing, it’s easier for brands to figure out exactly what works best and create a system custom built for the benefit of their website visitors.

Check out our integrations page and more documentation on AB Tasty here.

How Workflows Improve The Consumer Experience

“Whatever we do must be in accord with human nature. We cannot drive people; we must direct their development,” – Henry Gantt.

The idea of workflows has been around for decades and presently pops up everywhere in commerce. Henry Gantt, an American mechanical engineer and pioneer of the “Gantt Chart” was possibly the first to spark the idea of a project management schedule during the industrial revolution – which has since become a workflow.

Overall, the Gantt Chart was about increasing efficiency and that aim has transferred to how the consumer experience is managed today within multiple business models.

Workflows are about automating the business process using technology for peak performance and easy communication between brand and buyer.

In a heavily populated digital ecosystem consumer service is more programmed than ever and sometimes these automated interactions do little to maintain loyalty with a consumer base. Human beings are the sum total of their experiences and that notion should transfer to how they exist online as well.

A notable complaint of many callers is being trapped in the IVR abyss and then being shuffled around from department to department like a pack of cards with very little empathy in place. Well placed workflows have a knack for making sure no conversation is lost in the din of call centres and chat queues.

How do they do this?

Granular data

Anyone on the internet is just a blob of data there to be captured, harsh but true. Forming that mass of binary into something useful (and compliant) is now the job of brands more than ever.

Workflows that include granular targeting can help boost efficiency and make callers feel a sense of personalisation even if they’re merely one of many. Granular targeting uses granular data which is malleable and highly useful information that, “can be aggregated and disaggregated to meet the needs of different situations,” says Technopedia.

Considering the fact that millions are at stake for every ad campaign, building a strategy based on specific consumer details derived from granular data can help make every penny count and put brands on the right side of a gamble. This is good if a company needs, “to prove a theory,” according to Hawke Media. A theory as simple as, “this is what our audience needs.”

It’s all down to the elements of what motivates or defines a caller/buyer/consumer. There are multiple reasons why someone is reaching out to a company and workflows including call routing take these things into account when managing a pool in call centres, dealerships or any consumer-facing business. Call routing workflows prioritise inbound calls based on factors such as geolocation, pages visited, phone number and device. Intelligent call routing can enhance the consumer experience by segmenting this data into profiles that take them to those answers they need.

Automation

Another way workflows add to a positive consumer experience is by using automation like notifications. One person will often reach out to a company via an arsenal of mobile technology, i.e., tablet, smartphone, laptop – in this day and age they’re used to speedy searches and easy satisfaction. Luckily, workflows can be triggered into different actions like sending an automated feedback email after a call or SMS reminders to agents if a call is missed. “Workflows make it easy to keep track of these important changes, so you know which of your leads are warmest, and can act on that information immediately,” says Hubspot.

Beyond the fact that actionable workflows aid in efficiency behind the scenes, they really help with consumer engagement too – once used holistically of course. A holistic approach points to custom building a digital interaction that acknowledges the needs of the receiver. Great CX has a basis in consistency and automated workflows are nothing if not dependable. With consistency comes trust and eventually, loyalty. “Trust-building and engagement are what notifications are all about. And it’s why thinking about notifications should be a key part of any CX plan,” notes Brent Sleeper for Marketing Land.

The human touch

Automation, notifications and granular details. Now that we’ve covered the technical intricacies of why workflows should be in every businesses’ toolkit, its time to consider what Gantt mentioned – keeping in line with human nature. Despite hiding behind numerous modes of communication thanks to advances in technology, human beings still need to feel that personal touch. The buzzword of the moment in consumer service seems to be AI thanks to Alexa, Google Home, Siri and other voice-activated robot assistants on the market. However, developers are still struggling with embedding empathy into their systems and this can be problematic, especially in consumer-facing industries, where dropped calls and lost leads are becoming more frequent.

“We’re now surrounded by hyper-connected smart devices that are autonomous, conversational, and relational, but they’re completely devoid of any ability to tell how annoyed or happy or depressed we are. And that’s a problem,” says Rana. We’re further away from excluding humans completely than we realise. We may be biased, but workflows should be considered a happy medium while we wait for those robot agents with emotional intelligence to take over.

Until then,  they will connect a human agent and a human consumer quickly and proactively by considering the technical context of how and why they got there. It’s this symbiosis that works, for now. “There’s going to be a learning curve with automated customer service, and everyone will get on the bandwagon in their own good time. Don’t force it, and introduce any big changes slowly. Your customers will thank you for the “toe dip” approach rather than being pushed into the deep end,” preaches Salesforce.

Workflows are a toe dip we can definitely live with.

Via: Salesforce Blog, Marketing Land, Hubspot, Hawke Media, Technopedia, The British Library. 

Do We Really Want To Talk To Robots: Event Round Up

Freespee’s event; “Do we really want to talk to robots?” was a resounding success. An array of topics were covered by industry experts and GDPR fears were quelled. All in all, an evening of progress.

We started off with office preparations and photographs of the staff amongst the din. Prosecco was poured, and canapes were munched. Guests streamed in and socialised with Freespee team members in our open-plan space.
Eventually, we took our seats to begin the enlightening panel discussion featuring our CEO Anne de Kerchhove, Gumtree/eBay’s Head of Motors Vik Barodia and Freespee co-founder and Chief Strategy Officer Carl Holmquist. The chat focused on AI, trust and the future impact of technology on brand and consumer relationships. Vik also brought up the future of MaaS (mechanics as a service), the gig economy and more.

The first quarter of the conversation covered AI. “It will become less an ‘I need something; therefore, I need to transact,” to a fully immersive experience that says, ‘hey have you thought about this?” and ‘we know what you want,’” said Vik.

He visualised a scenario where artificial intelligence is fully integrated into everyday goings-on.

“I’m amazed by what could one day be real life,” said Vik.

Presently, Barodia defines success in his industry not as predicting what a consumer wants before they want it, but by the building of trust.

“The reason that eBay is so successful is that it enhances the level of trust. eBay was one of the first businesses to introduce ratings. Ratings drive trust and probably the single biggest element of any transaction is trust. We see it on eBay and Gumtree all the time. Buyers are willing to pay more from a trusted seller. Influence comes from trust,” Vik stated.

Speaking of trust, during the Q&A portion, audience members brought up the word on everyone’s lips; GDPR.

One question explored how a post-GDPR world could stifle creativity when justification is now needed for every piece of data captured by marketers.
“I do think we’ll have a period of cleansing, but much of that pre-GDPR data wasn’t based on real relationships, replied Anne de Kerckhove. “We’re going to rebuild on true and trustworthy data and relationships. It’s a painful period, but once the data is clean, we’ll be able to renew our creativity.”

Renewal of creativity in this ever-changing world is something everyone can get onboard with.

“We are not that far away from big names in the digital space disappearing because they have failed to recognise what is happening in the online space, it’s completely cyclical,” Vik added.

Photographs: Howard Sayer 

Want To Recover 81% Of Lost Sales Opportunities? We Know How.

There is a giant misconception about calls and customer service. As millennial expectations seep into the commerce environment, more and more brands are relinquishing voice data in favour of clicks, shares, and views.

In fact, “61% of mobile searchers state that click to call is most important in the purchase phase of the shopping process,” states a study by Google. Customers want to talk on the phone.

With this awareness, giants like Facebook are utilising call data more with click-to-call ads on their platforms to push offline sales.
But we know what you’re thinking; what if those calls are missed? Isn’t it more comfortable to rely solely on channels like email which are automated to answer customers?

Nope. New technology has been developed to ensure that missing a call never happens again and allows businesses to lean a bit more on the value of an old friend, the telephone.

Abandonment recovery (AR)

Any customer-facing enterprise knows that communication is vital – especially in a world where most of society is firmly attached to mobile phones – missing a call is akin to losing a chunk of potential revenue. According to Freespee data, 40% of customers abandon during the first 60 seconds of a call. Worse yet, if they aren’t called back within three to four weeks, a potential buyer will never use the service again. That should never happen, particularly in the automotive sphere where margins are high and time is limited. This is where a tool like abandonment recovery comes in.

The benefits of abandonment recovery

Probably the best part of abandonment recovery solutions is the opportunity to recover every lost sales opportunity. Freespee customers have at times seen 81% recovery rates from abandonment messaging.

Integrating this sort of data into the rest of your sales and marketing stack offers pretty cool opportunities too – a Qubit study found that implementing abandonment recovery into a businesses CRM stack creates a 1.1% uplift in RPV (revenue per visitor).

Another positive of AR is the more holistic approach it brings to the brand/vendor/buyer relationship. For example, say an automotive brand isn’t sure of how customers (i.e. leads) are being managed when they leave the website and call the dealerships. A vast majority of a car salesman’s time is spent on the floor interacting with walk-ins, leaving call opportunities vulnerable. Abandonment recovery can ensure that any calls coming in during the dealership’s peak times are not ignored but that the customer is given an opportunity to reschedule the call at another time. With this process, the customer’s expectations of the brand and the dealership are managed and their experience is not broken. Both the vendor and brand can breathe a sigh of relief knowing that a vital buyer connection isn’t lost.

Freespee’s ACR – how does it work?

Obviously, we’re huge fans of abandonment recovery as we see its benefits amongst so many of our customers. That’s why we’re super happy to announce the latest update to the AR workflow.

From today, Freespee’s Abandonment Recovery workflow allows our client’s customers to reschedule time and date for a callback in the event that a call was missed or abandoned.

This puts to pasture legacy IVR systems which leave callers languishing in long call queues until finally they are connected to an agent who has little idea of how they got there or what they want to discuss.

You basically want to manage that calling customer’s experience – to allow them the opportunity to reschedule at a time that suits them. With this workflow, you are able to send callers an SMS post-abandonment (or missed call) to apologise for missing the call and requesting they set up a time to be called back.

The SMS is totally customisable and contains a link to a landing page where they can select a date and time for the callback or unsubscribe from the SMS service.

Most exciting, however, is what happens when the time of the call comes. Freespee are able to automatically connect the caller and your agent at the time of the call! This means you are able to continue tracking the outcome of the call and any subsequent conversion.

In conclusion, voice is the future of customer interactions and building a system to ensure every call is valued and coveted should be a priority for any digital business. We’ll leave with a classic film quote we wholeheartedly believe applies here, “nobody puts phone calls in a corner.”
Via: Google Think, Qubit, Freespee

To find out more about our Abandonment Recovery workflow, please speak to your Customer Success Manager or email us.

What We Learned About Feedback From Online Marketplaces

Not everyone loves feedback, especially the negative kind. Online marketplaces love it all. Feedback, both good and bad supports reputation, and without a good rep, there is little trust from the buyer and seller base – which is a marketplace’s bread and butter.

Since eBay began in the mid-nineties, they were arguably the pioneers of the online review system. Now, “61% of customers read online reviews before making a purchase decision,” claims Econsultancy. eBay Founder Pierre Omidyar introduced the process within six months of launching the website where he explained the benefits of open communication in a letter to customers.

“Now, we have an open forum. Use it,” Omidyar wrote in February 1996. “Make your complaints in the open. Better yet, give your praise in the open. Let everyone know what a joy it was to deal with someone.”

eBay soon achieved a reputation for candid feedback. However, the introduction of these feedback systems in online marketplaces like Amazon and eBay also highlighted the flexibility of our trust as buyers. It seemed that once we were able to connect and contribute our pleasure or distaste somehow, it was safe to exchange funds with another anonymously.

“How is it that strangers who have never transacted with one another, and who may be thousands of miles apart, are willing to trust each other? Any transaction requires some level of trust between the buyer and seller, usually in the shadow of some institutional support like the law or other enforcement mechanisms,” writes Steven Tadelis in a paper titled “Reputation and Feedback Systems in Online Platform Markets” from UC Berkeley Haas School of Business.

Pierre Omidyar and eBay’s reputation mechanism arguably caused a shift in how buyers interacted online then and today. The company did it by cleverly utilising an online buyer’s newfound willingness to trust, by creating an environment of transparency using age-old commerce methods like the two-sided market; which is the core business model of most online marketplaces today.

These days feedback goes beyond the online marketplace and is prevalent in most consumer-based businesses. It has evolved from a single channel to multiple forms, including SMS which has become a leading source of survey, making it even easier to gather relevant data for customer management.

We can learn a lot about feedback from eCommerce and its ability to automate a kind of moderation within the heavy customer traffic produced in online marketplaces. Here are few facts that taught us a thing or two.

There are two types of feedback

One-sided and two-sided. One sided is mostly derived from one party, such as the buyer reviews on Amazon, while Air BnB uses two-sided where both tenant and owner can leave reviews on their experience.  In the early days of this process, eBay introduced this idea of both buyers and sellers leaving commentary freely, but after 2008 their direction changed. Now, two-sided feedback is relegated to service-based forums like Airbnb and Uber, where both parties rely on each other. One-sided procedures put the onus the marketplace to oversee operations, viewing the product as the buyer and the seller as the client. eBay even initiated a protective scheme for their sellers/clients by introducing PowerSellers, “Buyers must wait at least seven days before leaving a negative or neutral Feedback for a PowerSeller who has been registered on eBay for at least 12 months,” states their website. One isn’t necessarily better than the other, at the end of the day, it’s about what’s healthiest for that particular forum.

It doesn’t affect the bottom line but something more important.

Surprisingly, feedback in online marketplaces does not affect revenue directly, “a one-point increase in reputation corresponds to a 4 cents increase in final price,” writes Tadelis. The one metric that is in fact undermined by a weak feedback system is buyer and seller trust. Trust is the backbone of any B2C e-commerce platform, and it can be difficult to attain, “Since there is no physical interaction with our customers, we rarely get to share traditional dialogue, build a personal rapport or shake their hand. Therefore, in case of marketplaces and e-commerce, on the whole, trust must be perceived and interpreted by the customer,” says WC Marketplace.

So does trust really increase revenue? Yes, it’s the motivation to turn a user into a customer and influence KPIs like growth rate which controls transactions between buyers and sellers. With growth comes higher liquidity, and that is the ultimate goal of all online marketplaces. Most of the time it starts with giving customers the opportunity to participate in the social environment created by e-commerce, feedback may be the most important tool they have in their belt.

There is an entire economic principle behind it.

The economics of reputation is legitimate and was touched on by “Luis M B Cabral, Professor of Economics at New York University, in his study, “The Economics of Trust and Reputation.” Cabral’s theory explores the benefits of investing in reputation, claiming that the better a brand’s reputation, the less they have to invest in building it. “According to Cabral, therefore, high trust and reputation can together help companies earn higher profits. Not only can a company increase the price of its products and services, but it can also decrease its expenses (the amount of money invested in reputation management),” writes Clear Logic.

The future of feedback

Feedback’s future looks more SMS based, a response to the growing impatience of tech-dexterous customers. Following up service with an SMS feedback survey is more rapid and proven to increase customer click-through rate, “The average open rate of a text message sits at about 99%, while email ranges from 28-33%. Next, to this, the click-through rates are vastly different. Include a link in your text message, and you will observe a CTR of about 36%. For email marketing, the CTR usually sits between 6-7%,” according to Business 2 Community.

Feedback aggregation is also on the table for upcoming developments, such as meta-platforms, which establish a culminative reputation score for a customer based on their interactions across e-commerce. There are companies out there currently attempting this idea by creating platforms to moderate reviews, so the marketplace doesn’t have to.

The art of reviewing has been around a long time; now the digital space has made it even easier to interact with each other, communication is only going to get more comfortable. As Tadelis notes, “It is apparent that the design of feedback and reputation systems will continue to play an important role in the broader area of market design as it applies to online marketplaces.”
Via: Econsultancy, Steven Tadelis, Business 2 Community, Clear Logic, WC Marketplace.