Recommendation: The Second Step of Building Deep Customer Relationships

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In my last post, I talked about the importance of findability in regards to building deep online relationships. I would now like to talk about the next level of relationship that businesses can foster with their client’s; a relationship where customers turn into advocates for the businesses they frequent.

Chris Anderson wrote in his ground breaking work, The Long Tail that content is no longer king, context is. This means that relevant information needs to be presented to us depending on where we are in our online experience. Peers provide a tremendous amount of context for us on a daily basis and this extends to our online relationships. Deloitte’s Consumer Products group found that 62% of consumers read consumer reviews on the Internet and that 8 out of 10 say their decisions were directly influenced by the reviews. (It is also important to note that approximately 42.2% of all statistics are fabricated.)

As we all know, Amazon has been using customer reviews for a very long time to help people see beyond the editorial reviews and this is why recommendations are so powerful. Broadcast has been used as the primary method of communicating to potential customers for as long as we can remember and because of this people simply don’t trust businesses. But we do trust individuals. Before the Internet, people were utilizing each other for find good restaurants, movies and books. The Internet has only facilitated what is second nature. Social networks have enabled friendships to blossom and the platform for recommendations to be created.

Successful businesses models such as Bazaarvoice offer the collection and display of product reviews for businesses such as Bass Pro Shops. After implementing Bazaarvoice’s solution, Bass saw an increase in conversion rates from 3%-5% to 59%.

This does not mean that every recommendation is as pointed as “go here and buy this”. It can take on a much more informal form such as forwarding URLs such as Nike’s Juice Ball or the recently popularized Will it Blend. (I received the Will it Blend link from a friend in February 2007 and the site took off in June after an article in the Wall Street Journal.) Retail sales have increased by 500% since the video was launched last year. Tagging is also another form of informal recommendation. Someone is taking the time to label something within a social network such as Flickr or del.icio.us to enable people to find what they are looking for once on the site. (I would like to see this methodology included in Google’s search techniques.)

These types of low-level examples are apart of the recommendation economy or peer based economy that has been forming online with people acting as filters. This means that your product or service must speak for itself and from there people will speak on behalf of your business.

Recommendation is the second step in building deep customer relationships. In my next post I will discuss the third level which has been on everybody’s mind this year; transparency.

By Michael Myers

I'm an Associate Teaching Professor of Digital Marketing at the Daniels College of Business, University of Denver. I also consult with startups and established brands. I'm currently focused on artificial intelligence, cognitive neuroscience and culture. I am married to an amazing woman and have two incredible children. I was raised in Colorado and spend my free time with family, biking, snowboarding and going to the Pacific Ocean to SCUBA dive and/or surf. I'm passionate about architecture, design, street art, photography and the art that tattooing has evolved into.

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