Making the Most of Customers' Online Reviews - WSJ.com

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Companies are learning to make the most out of customers' online reviews of their products

By GEOFFREY A. FOWLER

Online, everyone has an opinion. For e-commerce businesses, the hard part is making the most of them.

Amazon.com Inc. began posting customer ratings and reviews of its products online in 1995, with an anonymous five-star write-up of Dr. Seuss's "The Butter Battle Book." Since then, most online businesses have found that allowing customers to post reviews—including negative ones—can boost sales and help merchants quickly identify problems with their products.

Now, makers of review software are adding features that allow businesses to get more out of consumers' input online. They have found ways to boost the number of reviews on a site and lend them more credibility, so shoppers are more likely to feel comfortable making purchases. And merchants can now reap the benefits of input from consumers before a sale is made, by posting questions from people thinking about buying a product and the answers, including comments from other consumers.

Building Trust

The review software developed in-house by Drugstore.com Inc. relied on customers to motivate themselves to submit reviews of the products they bought. But after outsourcing its reviews in June of 2008 to San Francisco-based Power Reviews Inc., Drugstore.com launched a system that automatically emails customers about three weeks after they've made a purchase, encouraging them to post a review.

Getting those email requests "makes you feel important and also increased our brand's connection to you," says David Lonczak, chief marketing officer of Drugstore.com, which is based in Bellevue, Wash.

After launching the program, Drugstore.com witnessed a more than 300% increase in new reviews, lending a lot more credibility to its products—especially those with a large number of positive reviews.

There was also a side benefit. Customers who responded to the emails could be confirmed as buyers of those products—unlike some people who post reviews on products they haven't actually purchased. These "verified buyers" are given a badge next to their reviews, adding authenticity to what they report.

"Three or four years ago, you were just happy if you found a review on something. But now you wonder if I can trust the reviews that I am reading to make a decision," says Andy Chen, Power Reviews' chief executive.

Feeling Connected

Skepticism about whether the reviewer actually bought the product isn't the only reason a shopper might not give a review much weight in deciding on a purchase. Sites like baby-products retailer Diapers.com are increasingly deciding that customers are more likely to trust a review from someone they feel connected to in some way.

In the market for baby products, "the most important recommender is going to be people who are in a very similar situation to yourself," says Josh Himwich, director of e-commerce solutions at Diapers.com, which is based in Montclair, N.J. "It is the closest thing you can get to a recommendation from a sister or friend."

Sometimes a review will include personal information about the author that might establish a connection with a shopper. But that's not true of many reviews, and even when such information is included it isn't prominently displayed.

So two years ago Diapers.com started using a feature offered by Power Reviews that helps shoppers distinguish one reviewer from another. Now when customers contribute a review, they have to check one or more boxes to identify themselves in terms such as "first-time parent" or "grandparent." Reviews show up on Diapers.com categorized under those headings.

The site plans to expand on that service next year by allowing users to search through the jumble of reviews on any given product based on those identifying categories—choosing to see, for example, only reviews written by the parents of twins. Mr. Himwich expects that feature to give his site a leg up on others that only sort reviews based on ratings or on comments that have been voted the most useful.

In the coming weeks, Bazaarvoice, a software firm based in Austin, Texas, will expand a system that takes the idea of drawing connections among shoppers a step further, by linking reviewers' write-ups with their Facebook profiles. That will make it easy for reviewers to share write-ups with their friends, and for other shoppers to see a lot more information about who has left a review. "Everybody knows you will trust somebody you know more than somebody you don't," says Bazaarvoice Chief Executive Brett Hurt.

Any Questions?

Another service from Bazaarvoice is helping merchants mine input from consumers who are still considering a purchase. The Whitney Automotive Group, which runs auto-parts supply site JCWhitney.com, watched sales jump after it hired Bazaarvoice to add customer reviews to its site three years ago. But the comments alone couldn't help with another problem: shoppers inadvertently buying the wrong product.

So two years ago, the company asked Bazaarvoice to add the capability for shoppers to pose questions about products before they buy, instead of just leaving comments after the fact. The service allows customers to "let us know what information isn't out there," says Tom West, JC Whitney's chief executive.

It also sparks discussions among shoppers about the company's products. Normally, online shoppers ask questions about products by sending an email to the store, or phoning a call center. The answers a shopper is given only benefit that one person—other shoppers don't get to listen in. Now, when a JC Whitney customer posts a question on the site, other customers or JC Whitney employees or suppliers can post answers that all shoppers can see. The software keeps track of which questions have and haven't been answered, and directs new questions to employees who are experts on the subject.

The feature hasn't increased sales much, says Mr. West, but it did cause the company's product return rate to drop 23% in the first year after the system was put in place, compared with the previous year, for those products that had received a critical mass of queries.

"It turns out that if it was a question for one person, it was a question for even more," says Mr. West. "While we may lose a sale, we also prevent a return."

Bazaarvoice has been extending the service to suppliers who want to answer the questions asked about their products on retailers' sites. For example, Samsung Electronics uses the service to answer questions on BestBuy.com and other sites about its television sets, signing its answers "Mr. Samsung."

Does the U.S. Chamber Speak for Big Business? - BusinessWeek

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The U.S. Chamber of Commerce's aggressive opposition to climate change legislation is costing it credibility, clout—and members

By Jane Sasseen

There aren't many who would willingly take on Apple (AAPL) icon Steve Jobs—and lecture him on technology. But Thomas J. Donohue, the combative head of the U.S. Chamber of Commerce, isn't one to step away from a fight.

So on Oct. 6, a day after Apple became the fifth—and most prominent—company to resign or reduce its role at the Chamber because of its aggressive opposition to climate change legislation, Donohue fired back. "It is unfortunate that your company didn't take the time to understand the Chamber's position on climate and forfeited the opportunity to advance a 21st century approach," he wrote to Jobs. He stressed the Chamber's belief that business can spur much of the technology to reduce greenhouse gases, much as the private sector has "developed the innovations that we now take for granted, from the personal computer to the medicines that keep us healthy."

Donohue is renowned for his bulldog style. Now he and his colleagues find themselves embroiled in a fight over climate change that raises questions about how broadly they speak for business—and whether the Chamber, allied with the Republican Party for the last decade, can retain its influence in a heavily Democratic Washington.

$100 Million War Chest

The Chamber has moved sharply to oppose much of the legislation and many of the regulations and policies streaming out of the Obama Administration and the Democratic Congress on health care, labor issues, and finance. In a move some see as little short of a declaration of war on the White House, Donohue has been crisscrossing the country to raise $100 million to launch the "Campaign for Free Enterprise." It is intended to promote open markets and fight a rise in regulations and tax hikes that he argues will undermine job creation and the economy. "We are certainly not alone," says Donohue, adding that the Chamber's controversial policy choices reflect his members' views: "This is not me.…This is not my staff. We are delivering on the issues that concern the business community."

Many well-placed Democrats believe that hard-nosed attitude is starting to cost the Chamber credibility—on energy and beyond. "The more they get out in opposition on core issues to the Democrats, the more they will continue to alienate them," says a top aide to a key Democrat in the Senate. "The Chamber's best shot is to influence moderate Democrats, but the more unrealistic they get, the more they will leave the moderates wondering why they should work with them." As proof of the Chamber's flawed approach, Democrats point to its recent leading role in what many saw as an over-the-top attack on the Administration's plans for an agency to protect consumers from predatory lenders. Even moderate Democrats who are often supportive of the Chamber took note. "It's unfortunate that some business groups are allowing misleading information to confuse the debate," says one influential representative in financial matters, referring to claims by the Chamber and others that many small businesses would be covered by the proposal. "We should be debating the real issues."

The Administration, meanwhile, is going out of its way to foster ties with CEOs and business leaders on its own, rather than rely on the Chamber. "I'd rather talk to [Cisco (CSCO) boss] John Chambers than to the Chamber," says Valerie Jarrett, the Presidential adviser responsible for outreach to the business community. "I don't stop listening to the Chamber, but [the resignations] do make me question whether they have the pulse of their membership." Adds Hilary Rosen, managing partner of the D.C. office of communications strategy firm Brunswick Group and a White House confidant: "Most business leaders we speak to are looking for solutions. The Chamber's posture has become a barrier."

Business Roundtable More Pragmatic

The White House appears to be turning more to the Business Roundtable, a group of over 160 CEOs, for feedback and input on its policies. John Castellani, the Roundtable's president, says its members have met frequently with White House staff in recent months. The group's leaders, such as Ivan G. Seidenberg of Verizon Communications (VZ) and Andrew N. Liveris of Dow Chemical (DOW), have featured prominently on the list of CEOs invited to dine with the President or his top aides.

The Roundtable is seen as having a more pragmatic take on the business community's agenda. "We strive to be politically relevant, but not partisan," says Castellani. Much of its work is data driven. On climate change, the Roundtable neither opposes nor favors a tax or a cap-and-trade system as the best way to put a price on carbon emissions. Instead it has provided policymakers with extensive data on how different companies and markets would react at different price levels.

Donohue maintains many chief executives hold back on what they really think when dealing with the Administration. "We see CEOs act all friendly to get a seat at the table," he says. "Then they call us up and say: 'You better fix this.'" He plays the bad cop, the guy who has to tell it straight.

That dynamic has been driving the fight over climate change. The Chamber vehemently opposes legislation now before Congress as well as moves by the Environmental Protection Agency to regulate harmful carbon emissions. In late August a top Chamber official even called for a public hearing, similar to the Scopes Monkey Trial, to rule on the evidence of human responsibility for global warming.

Rebellion Spreading

The Chamber has since repudiated the remarks, which referred to the 1925 trial that pitted religion against evolution. Donohue says the Chamber doesn't dispute the science of global warming, but it wants more debate on how the U.S. regulates it. Still, the damage was done: Utilities PG&E (PCG), Exelon (EXC), and PNM Resources (PNM), all of which back the congressional legislation, quit. "We came to the conclusion that the legislation they were looking for was not the legislation that would address carbon," says Shawn Cooper, chief of staff to PG&E's chief executive. "The difference on this issue—where we were and where the Chamber wanted to go—was just too significant."

That rebellion is now spreading from utilities to consumer companies that are burnishing their green credentials. On Sept. 30, Nike (NKE) announced that it would resign from the Chamber's board, although it will remain in the group and continue to debate climate change from within. Not so Apple, where CEO Jobs recently stepped up efforts to reduce its own emissions. On Oct. 5 the maker of the iPod withdrew from the Chamber. In a letter to Donohue, Apple chastised the Chamber, saying: "It is frustrating to find the Chamber at odds with us in this effort."

Donohue minimizes the importance of the defections. While he says the group would support strong curbs if they were combined with an effective international pact, it doesn't back the current legislation because it would hurt U.S. competitiveness. Those who have quit, he implies, either will benefit from the legislation or won't be harmed. What the opposition suggests "is that we are having an effect," he says. "We are amongst those who have raised serious questions about the content of the legislation."

Plenty of companies are sticking with the Chamber. Dow is in the Chamber as well as the Roundtable, but supports the current climate legislation. "We have let the Chamber know our position," says Rich A. Wells, vice-president for energy and climate change. So why not pull out? "They do other things for us, such as tort reform," he says. C.A. Howlett, a Chamber board member and senior vice-president for public affairs at US Airways (LCC), says that since "Tom [Donohue] came along, the Chamber's been completely revitalized." As for the recent uproar, he adds: "You can't make everybody happy all the time."

With Theo Francis and John Carey in Washington. Sasseen is Washington bureau chief for BusinessWeek.

The Green Rankings - Newsweek.com

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By Daniel McGinn | NEWSWEEK

Published Sep 21, 2009

From the magazine issue dated Sep 28, 2009

When David Roberts was growing up near the oilfields of West Texas in the early 1960s, it never got dark. Back then, oilfields were lit 24/7 by the gas flares used to burn off natural gas, a byproduct of oil drilling. The flares released massive amounts of CO2, and over time, oil companies halted that harmful practice in the U.S. But gas flares remain the norm in the developing world—and today Roberts oversees a team at Marathon Oil that's trying to end the practice. In 2007, Marathon opened a $1.5 billion liquid-natural-gas plant in Equatorial Guinea to capture the natural gas that once went up in smoke. The plant is one factor that helped Marathon, No. 100 in NEWSWEEK's Green Rankings, cut its CO2 emissions by 40 percent between 2004 and 2008—and the plant earns a profit.

It's a small example of how the economic case for going green is becoming more compelling. Economists view environmental damage as a classic "externality"—a cost that impacts society but isn't imposed on producers or consumers. But with scientific consensus that carbon emissions threaten our climate, there's growing political will to curb them, particularly with the global powers set to meet in Copenhagen in December. The Obama administration is pushing for a cap-and-trade system that would turn companies' emissions into a bottom-line cost. Smart companies are working to better understand—and cut—those emissions ahead of new regulations.

The inaugural NEWSWEEK Green Rankings recognizes those efforts. For more than a year, the magazine worked with leading environmental researchers KLD Research & Analytics, Trucost, and CorporateRegister.com to rank the 500 largest U.S. companies based on their actual environmental performance, policies, and reputation.

Ranking companies based on sustainability is a huge challenge. That's largely because comparing environmental performance across industries is a bit like analyzing whether Tiger Woods or LeBron James is the world's greatest athlete—there's an inevitable apples-and-oranges element. Some industries are far dirtier than others: a typical financial-services company exacts a smaller environmental toll than even the best-run utility or mining company. Also, many corporations are secretive about key environmental data, if they track the numbers at all. Even among companies that do report green data, there's no uniform standard, so their numbers often aren't comparable.

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Despite those obstacles, we worked hard to design a ranking system that makes sense. More than half of companies' overall Green Scores are based on their environmental policies and reputation, industry-neutral metrics that help even the playing field for companies in carbon-intensive businesses. To overcome limited corporate emissions numbers, NEWSWEEK used data from Trucost, which has created a widely acclaimed system for estimating emissions of companies that fail to provide them. (Note, however, that among our Top 100 best-performing companies, 70 voluntarily disclosed the data.) Over time, we hope NEWSWEEK's rankings will become more precise as more companies begin to report their numbers. "One of the purposes of this is to improve the transparency of corporations…and encourage them to provide an even higher level of disclosure," says Thomas Kuh, KLD's managing director.

Many of the companies that finished in our Top 100 are recognized leaders in sustainability. Intel, No. 4 in NEWSWEEK's ranking, recently launched an initiative in which every employee's annual bonus is tied, in part, to how well the company does in meeting sustainability goals. Wal-Mart, No. 59, recently announced plans to create a Sustainability Index that will help consumers better understand which products sold in its stores are greener than others.

Rankings inevitably provoke controversy—and we welcome that. Our hope is to open a conversation on measuring environmental performance—an essential first step toward improving it. The NEWSWEEK Green Rankings for 2009 on the pages ahead provide a snapshot of companies poised at this most important starting line.