09 Feb 2012  Sharpening Your Skills

Online Marketing

In this collection from our archives, Harvard Business School faculty discuss the latest research on online marketing techniques, including consumer reviews, video ads, loyalty programs, and coupon offerings.

 

Questions to be answered:

  • What's the strategy for managing consumer reviews on my site?
  • Do people watch online video ads?.
  • How can I get more out of my customer loyalty campaign?
  • Are online coupon programs like Groupon effective?

What's the strategy for managing consumer reviews on my site?

The Yelp Factor: Are Consumer Reviews Good for Business?

In a new study, Assistant Professor Michael Luca shows just how much restaurant reviews on Yelp affect companies' bottom lines. The more difficult question: Are these ratings reliable as a measure of product quality? Key concepts include:

  • Each ratings star added on a Yelp restaurant review translated to anywhere from a 5-percent to 9-percent effect on revenues.
  • Local, independent restaurants were the most affected by reviews, probably because diners have little information about them before the reviews were posted.
  • Online marketplaces must be concerned with not just reviews but all the factors that create trust with their users.

Do people watch online video ads?

Creating Online Ads We Want to Watch

The mere fact that an online video advertisement reaches a viewer's computer screen does not guarantee that the ad actually reaches the viewer. New experimental research by Thales S. Teixeira looks at how advertisers can effectively capture and keep viewers' attention by evoking certain emotional responses.Key concepts include:

  • In a recent experiment, participants watched a series of ads in a computer lab setting. The researchers parsed the viewers' emotional response with the help of eye-tracking technology combined with facial expression analysis software.
  • Evoking surprise proved to be the most effective way of capturing attention, while evoking joy was the most effective way of retaining it. This indicates that advertisers should include a surprise at the beginning of an online commercial.
  • Ads retained attention better if they delivered several snippets of joy in succession than if they delivered a sustained period of joy.

How can I get more out of my customer loyalty campaign?

Customer Loyalty Programs That Work

Thanks to ever-improving technology, customer loyalty programs are proving extremely popular among retailers—but merchants are not getting all they should out of them. The reason? Professor Josť Alvarez says retailers need to see customers as partners, not transactions. Key concepts include:

  • Most retailers are at a very basic level in using loyalty programs, and many customers see the programs as punitive.
  • Successful retailers connect with customers via loyalty programs at three levels starting with an introduction, followed by a retailer-initiated communication, and finally with customer- or retailer-initiated feedback loops.
  • Retailers should ask themselves, How do I create a partnership with the consumer?
  • Data collected from these programs can help merchants make smarter decisions on everything from where to open a new store to pulling the plug on a fading brand.

Are online coupon programs like Groupon effective?

Is Groupon Good for Retailers?

For retailers offering deals through the wildly popular online start-up Groupon, does the one-day publicity compensate for the deep hit to profit margins? A new working paper, "To Groupon or Not to Groupon," sets out to help small businesses decide. Harvard Business School professor Benjamin G. Edelman discusses the paper's findings. Key concepts include:

  • Discount vouchers provide price discrimination, letting merchants attract consumers who would not ordinarily patronize their business without a major price incentive.
  • These vouchers also benefit merchants through advertising, simply by informing consumers of a merchant's existence via e-mail.
  • For some merchants, the benefits of offering discount vouchers are sharply reduced if individual customers buy multiple vouchers.
  • As a marketing tool, discount vouchers are likely to be most effective for businesses that are relatively unknown and have low marginal costs.

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Comments

    • Kapil Kumar Sopory
    • Company Secretary, SMEC(India) Private Limited

    This is a useful Q&A material which helped sharpen my skills. While online advertisements are being viewed and these do influence purchase decisions to some extent, onliine marketing has not developed yet, at least in India. People still prefer to shop only after physically examining the item. They have apprehensions about online supply of only what is shown, its quality and standard. Loyalty programmes have also somewhat a limited audience. So for online coupons.

     
     
     
    • Srinivas
    • Analyst, Fidelity

    Its a good article - to know the importance of posting customer reviews on the website/online; Loyalty points;online ads and coupon programs. when comes to real time - the above four plays a key role in terms of marketing across globe but slowly getting progress in India.

    Now a days people out here are doing online search before they going to purchase a product(there it comes the play of customer reviews and online ads)

    Loyalty and Coupons - India is a emerging market ; lot of retail businesses are coming and sure there are bright opportunities for loyalty marketing going forth. Here every retailer is giving points in payback card(a vendor). However, people are getting difficult to reimburse because they don't know when to reimburse to get benefit out of it. This wil be overcome by sending sms to the customers mobile once a month abt their point details.

    Retailer are taking the feedback but somehow there was a bit of confusion in implementing them. The solution will be like one vendor tie up with all retailers and maintain common platform for loyatly program - then customers will find it easy. End of the day - a good service from vendor which fullfills customer needs turns out fruitful business with profits by becoming customer as loyal.

     
     
     
    • Fred
    • Blogger, http://fredowusu.com/article-marketing-strategy/

    The way in which you construct your content material articles is no unique than whenever you write for distribution to an report marketing directory or for your web web-site, it must be a element inside your report marketing approach. The use of important phrases and phrases is very important for each and every, and keyword and crucial phrase option may well be the way in which readers and Google finds you, giving you much-needed visitors. Every single keyword ought to be thoroughly determined then further evaluation performed to see which net web-sites are employing those search terms. Then you need to establish should really you'll be able to contend with the greatest internet sites that may well be utilizing these search phrases. Read the full article here http://fredowusu.com/article-marketing-strategy/

     
     
     
    • veena dhawan
    • postgraduate student, Faculty of managemant studies

    Read the article as we had to prepare a presentation on a marketing article but found it to be really interesting as i do indulge in online shopping.I feel it could be used as a part of marketing strategy for brands to build a trust among its customers on the quality of product and services before the come into the open market . Thanks for the informative article

     
     
     
    • Jonathan Scott
    • Sales Director, Northern Light Media

    As the UK economy continues to falter, i would be interested to know how the increasing financial sensitivity of buyers has tested the success of customer loaylty campaigns.

    Loyalty programmes are often implemented by organisations at the mid to top end price bracket as means to try to blind consumers into thinking the loyalty based offer is of higher value than the price itself.

    In the current climate, many customers are waking up to the fact that by shopping around, they can source products and services of comparable quality at a better price elsewhere.

    If anybody knows of any 'recent' research conducted on this subject, i would be interested to read it.

    Jonathan Scott Sales Director www.northernlightmediauk.com

     
     
     
    • Jesse Rodriguez
    • Co-Founder, APT Technologies

    The groupon phenomenon is interesting still more via sms and geospatial awareness as is being tested by Starbucks and O2 in europe. However, I would add that proximity marketing along with click-through marketing such as that found on Google are both observing probabilities of purchasing habits that may or may not result in future patterns or location leading to user fatigue. The coupon is a much more intriguing proposition if the data tells us what a person wants and when they are going to want it rather than old-fashioned guessing. Currently our team is exploring the ability to assist users in-real time and future text situations that can save them both money and time. Wish us luck and cheers to your research.