CNNMoney.com posts a great article by Jennifer Alsever about the success that can be attained through negative comments that are shared online by your website. The point: negativity turns out to be a gift to your business, your products and to your current and future customers. What are you waiting for? Engage your customers and ask them to rate your products and services and share them with everyone who comes to your website. Everyone wins! And what could be better then boosting sales via happy customers?

Best Nicole

(Fortune Small Business) — Like many retailers, Jim Hobart knows the value of a good testimonial.

The online store he co-founded, AlpacaDirect.com, always offered a page full of cherry-picked customer comments raving about the site’s alpaca sweaters, socks and yarn. But recently Hobart, 47, decided to take the idea a step further: He hired PowerReviews, whose software lets shoppers write their own product reviews directly on the retailer’s Web site.

It was a risky move for the four-year-old company, based in Brentwood, Calif. Hobart was effectively paying to host bad press — such as posts by customers who described AlpacaDirect’s golf cardigan as “kinda sweaty” and a “poor fit.” Both awarded the cardigan three out of a possible five stars.

But a month after installing the PowerReviews service, Hobart saw sales climb 23% on items that had customer reviews (even that cardigan, which garnered an average of four stars).

“People are really researching their purchases,” he says. “We knew our customers liked our products, and we wanted them to tell one another.”

Online reviews have been spreading ever since Amazon.com (AMZN, Fortune 500) pioneered them in 1997. Witness the rise of “social shopping” Web sites like Kaboodle and ShopWiki and of consumer review sites, including Yelp and Judy’s Book. But today’s customer feedback software is growing more sophisticated, more personal and more affordable for small businesses.

Consumers are becoming used to searching for reviews when they shop online. Internet shoppers rank reviews as the most desired feature of a Web site, according to a recent survey by Forrester Research. “People want to talk among themselves,” says Jacqueline Anderson, a senior consultant at Forrester.

Adds Larry Freed, CEO of ForeSee Results, which provides customer satisfaction surveys for Web sites: “If they leave your site to look for reviews, they most likely won’t come back.”

Finding good review software isn’t easy, as Hobart discovered. He was turned on to the idea in 2006 after offering 2,200 AlpacaDirect products via Amazon, where he noticed that products with customer reviews typically sold better. He investigated free review software but decided not to use the programs because they required extensive customization by an IT professional.

Hobart was turned away when he first called San Francisco-based PowerReviews in 2007. At the time, PowerReviews focused on the enterprise market, customizing $1,000- to $2,000-a-month review software for larger retailers such as REI and Staples (SPLS, Fortune 500).

But four months later the company called Hobart back, saying it had changed its mind. A stream of small businesses had been asking for inexpensive, easy-to-install software. “We now think this is a very big market,” says PowerReviews vice president Darby Williams.

Hobart currently pays $80 a month for PowerReviews Express. The software sends e-mails to customers who have made purchases and invites them to submit reviews. The feedback system includes a text box for comments and the all-important five-star rating system. PowerReviews’ staff members read every review and remove posts they deem obscene or libelous. Otherwise, everything is fair game.

It’s important that site owners resist the temptation to edit or delete reviews they don’t like. “If everything is positive, that raises a red flag among consumers,” says Forrester’s Anderson. According to market research firm Keller Fay Group, 87% of consumers tend to write reviews when they have positive things to say.

And even negative reviews can be beneficial. When one customer grumbled that a photo of a yarn spool misrepresented its shade of green, Hobart responded by posting a new photo. He also appended a comment to the negative review saying that the problem had been dealt with.

Ultimately, says Hobart, reviews retain customers. The vast majority of AlpacaDirect’s customers return, so it’s crucial to snag first-timers. “Reviews help build that initial trust,” he says. “They are key to the long-term success of our company.”

I read today that the fashion retailer Zara is going to be selling their products online, starting in Europe. This is now an important way to not only service your current customers, but to offer convenience and gain the ability to reach a vast amount of potential consumers who can benefit from your products. Make sure that they can shop at your store and convert their cart to sales!

Best Nicole

Online retail sales are projected to increase by 11 percent this year to US$156 billion, according to Forrester Research. Although that’s good news, it’s a small decline from last year’s growth of 13 percent.

It’s clear the down economy, with the lack of credit access and low consumer confidence, has dampened consumer spending. The e-commerce sector has been able to weather the economic storm better than some, but is far from immune to the effects of the recession.

A key outgrowth of declining consumer confidence and increased hesitation is shopping cart abandonment. Abandonment rates range from 41 percent to 50 percent, according to The E-tailing Group. Marketing Sherpa reports average rates at 60 percent.

There is an enormous opportunity for retailers to improve their checkout process and recapture these lost sales. Although Q3 is upon us, there’s still time to implement new tactics to decrease shopping cart abandonment.

Top Reasons Shoppers Part With the Cart

Security and privacy fears. Data breaches are hitting more retailers, with such high-profile attacks as the TJX breach in 2007, and the Hannaford Brothers and 7-Eleven (NYSE: SE) hacks in 2008. These breaches are driving identity theft to all-time highs, and many shoppers do not trust retailers’ ability to safeguard their personal information.

• Comparison shopping. Many shoppers go through the buying process and get to the checkout page to find out their total amount due, including tax and shipping. Additional costs at the checkout stage can lead to abandonment. Shoppers might repeat this process on many sites until they find the best deal. However, once they find the lowest cost, they still might not make a purchase if they consider shipping costs are too high or other added fees to be unreasonable.
• Hidden return policies. Shoppers want to know they are protected and what recourse is available if they are not satisfied with a purchase. Restocking fees or return restrictions can deter a consumer from moving forward with an order.
• Confusion and impatience. A confusing checkout experience does not sit well with shoppers. Often when shoppers don’t know what to do next, they give up. Other things that can cause frustration: too many checkout pages, pages that load slowly, sites that require shoppers to register or create a profile before purchase, and no phone number provided on the site.

Shopping Cart Abandonment Solutions

Some etailers might think shopping cart abandonment is out of their control. How can you persuade shoppers after they’ve changed their mind about an item? Although some reasons might be uncontrollable, the majority are manageable and can be reduced by incorporating simple tactics on your Web site and into your checkout process.

• Put security front and center. Prominently display online safety logos, such as Hackersafe, Verisign Secured, TrustE Certified Privacy, and Better Business Bureau on your homepage and each page of the checkout process. Also have a link to your privacy and security policy on your homepage and at appropriate points during checkout. Invest in secure payment options. This helps establish shoppers’ peace of mind and builds confidence that your site is safe. Get to know your customers. Shopper surveys are a great way to learn the likes and dislikes of consumers. Monitor your Web site — specifically the shopper’s experience as customers go through the checkout process. Look for indications of when and where abandonment takes place to look for trends and common factors among your abandoned transactions.
• Address identity theft head-on. Play a proactive role in customer identity theft education by providing basic guidelines on how shoppers can safeguard their identity while shopping online. Also, include measures to take if their identity is stolen, such as information on who to contact, resolution steps, etc. This shows shoppers you care about their safety and builds their trust in your brand.
• Be upfront about fees. Show shoppers all costs associated with their purchase before they get to the checkout. This saves them from going through the checkout process only to learn the cost is too high, and leave to comparison shop. Have a prominent link on your homepage that displays shipping and any additional purchase costs.
• Offer alternatives. With the lack of credit access, shoppers are increasingly turning to cash to better manage their finances and limit debt. Consider expanding checkout options with cash-based alternatives. Options that leverage online banking offer a way for consumers to pay with available money while keeping their financial information secure.
• Protect and serve. Buyer protection is an effective technique that can strengthen customer relationships and incentivize sales. You can develop a plan in-house, or look for payment providers that offer built-in protection. A good buyer protection plan should include features like zero liability for unauthorized transactions; price protection that ensures the best possible price; 100 percent return guarantee; and protection from shipping loss or damages. Prominently display your plan on your homepage.
• Be transparent about “gotchas.” Provide easy access to your return policy. Clearly state all rules, restrictions, restocking fees, etc. Post these policies or a link to them in each product description so shoppers are aware of what they are committing themselves to before they reach checkout. There shouldn’t be any surprises during the checkout process.
• Be fast and friendly. Shoppers crave convenience. A two- or three-step checkout process is ideal. Provide shoppers the opportunity to review what they did in previous steps without erasing the information they’ve already entered. The cart should have a clean design that includes only the necessary information: items, prices, availability, shipping options and costs, and payment options. Post your 800 number and/or online chat support link on each checkout page.

It’s important to note that not all tactics are right for all e-commerce retailers. However, by testing a variety of methods, you will be one step closer to boosting your sales conversion rate and retaining customers.

Pass it on to all your collegues, friends and family. Better yet, what is your next strategy for building your new product?

Best Nicole

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How Del Monte Social Media Strategy Created a New Pet Food

Del Monte’s social media initiative created a new breakfast treat for dogs.

NEW YORK (AdAge.com) — It’s one thing to debate the potential power of social media marketing to influence product sales but quite another to watch a social media project actually create a popular new product. In his keynote address at last week’s Interactive Advertising Bureau’s Social Media Conference, Forrester Research’s Josh Bernoff explained how Del Monte Foods did that very thing in just six weeks.

The groundswell is here! Are you ready to engage?

Best Nicole

Here’s a New Lexicon to Help You Think Clearly

As I speak with companies that want to engage with their customers in the online social world, I continually find people confused as soon as they begin talking about “social media.” The reason is the baggage that comes along with the word “media.”

Media is something that media companies control, and media is overwhelmingly one-way. The online social world is about as two-way, multi-way, any-way as it can be. Nobody controls it, not even Facebook, which found it can’t even change its own terms of service.

Media is something people spend time with. So are online social interactions. That’s a pretty tenuous reason to call it media. And while, as in media, you can advertise in social network sites, that is the least interesting use for them.

Here are some words you can use to think more clearly.

If you want to refer to the whole world of people connecting and drawing strength from each other online, you can call it the “social web” or the “social internet” (or you can call it the “groundswell,” if you wish). It includes huge sites such as MySpace, communities, YouTube, the blogosphere and so on. (You could call the whole thing “Web 2.0,” but people often use that term to refer to a set of technologies — not the best way for advertisers to focus — and it doesn’t get directly at the people-to-people aspects.)

If you want to build an environment where consumers or other customers connect with you and each other, call it a “social application.” It could be a community, a user-generated-content site, or even adding ratings and reviews to your site. By calling these applications, you remind yourself that 1) it’s going to take some effort to build it right, and 2) people will interact with it. And you may even remind yourself that 3) it could last a long time, rather than coming and going quickly as advertising campaigns and media do.

If you’re going to participate in a big social site (Facebook, MySpace, Twitter, YouTube), call it a “social-network site” (or just a “social network,” for short). And you’re often better off with a channel or a profile or an identity than an ad in such an environment.

But no matter what you do, the sooner you stop thinking of the social web as media, the better off you are.