In my previous blog, I claimed that quality is a commodity, information is democratized, and the customer is empowered like never before. Now, I would like to touch on the impact of a well-informed customer and the impact on business.
Information is Democratized
Thanks to Amazon reviews, eBay feedback, Facebook, Twitter, and Yelp, information about a company’s products and services travels faster than the speed of light. With LinkedIn becoming more of a social platform than the former “publish your resume and forget it site”, and Glassdoor providing an inside look at jobs and companies, customers have greater access to not only your products and services, but your company and competition.
Before social media and the Internet, a company relied on marketing and advertising efforts to launch new products and services, gain new customers, and build brand loyalty. Today, customers are making buying decisions based on independent customer reviews more than ever.
Why are they doing this? It’s simple… current customers are sharing their experience online, and prospective customers relate their potential buying experience and decisions to those reviews. Prospective customers search for someone that is using a particular product or service they want, and then peruse reviews to see if the experience meets or exceeds their expectations. Traditional marketing and advertising efforts cannot compete with independent reviews.
This is the business model of Yelp: share current customer experiences with possible future customers. It’s becoming an integral part of a customer’s research and buying decision. In a recent Neilsen study, 89% of US Yelp users make a purchase within one week of visiting their site. Yelp is where consumers go when they are ready to buy, and at this point they are not looking at advertisements – they are reading reviews about the customer experience.
When Amazon first started putting customer reviews of books on their website, including negative reviews, publishers sent letters to Bezos asking why negative reviews were being included. Bezos replied, “Maybe you don’t understand your business. You make money when you sell things. We don’t make money when we sell things. We make money when we help people make purchase decisions.”
Amazon and Bezos understood very early the power of the customer experience and sharing that information with other prospective customers.
Next, I will opine on my final point: customers are empowered like never before. Stay tuned!