How Your Offline Reputation Affects Your Online Sales (and What to Do About It)
by Sarah Chambers, on June 14, 2017
How are your online sales affected by what you do offline? Sarah Chambers of BigCommerce explores the question of reputation in this guest post.
Your eCommerce store doesn’t operate in a vacuum. Actions that happen off-screen affect your onscreen sales. Why? Because reputation matters.
Reputation is the way that customers perceive your brand. You could be known as eco-friendly, cost effective or a bit shady. This reputation is built from word-of-mouth referrals, along with your public relations activity and anything you do off screen.
The perception of your brand has a big impact on whether customers are willing to trust you with a sale and how much they are willing to pay for your product.
A historical study by Shapiro in 1983 found that sellers who invest in reputation are able to charge a price premium above less reputable competitors. A more recent study looked at eBay buyers and found that for each additional negative feedback left by buyers, the likelihood of a sale decreased by 1% (Eaton 2008).
Uber’s recent PR disasters give us a real life example of how reputation affects online business. When NYC taxi drivers went on strike in January to protest President Trump’s immigration executive order, Uber tried to capitalize on the absence of taxis and even advertised more aggressively during the day. Users didn’t react kindly, with over 200,000 users deleting their accounts, and causing #deleteuber to trend on Twitter. The same hashtag began to trend again in mid-February when claims of sexual harassment began to surface. In just over a month, Uber’s reputation among users has tanked.
While your eCommerce brand might not be as much at risk as Uber, keeping your reputation top of mind can help build trust in your brand, drive customer referrals and increase sales.
The Importance of Trust
"It takes 20 years to build a reputation and five minutes to ruin it." -- Warren Buffett
Customers want to buy from companies they trust. A lack of trust is responsible for 70% of the termination of online purchases, resulting in a huge loss of revenue for businesses. (Taylor Nelson Sofres, 2006)
It’s more difficult for eCommerce companies to develop trust than for traditional brick-and-mortar stores. In brick-and-mortar stores, customers can pick up and hold the product before taking it home that very day. In eCommerce, customers must trust that the product description is accurate and that the merchant will deliver the goods on time.
Building a good online reputation through reviews can help. But off-screen reputation is also a big factor in building trust. People want to know what your company stands for outside of your Amazon store.
Even in today’s connected world, many customer referrals happen off screen between friends and family sharing their experiences. Just as Warren Buffet said above, reputation is an easy thing to lose. A 2011 American Express survey found that customers tell 9 people about a good experience they’ve had, but will tell 16 about a bad one. One negative experience impacts your reputation with 17 people.
Managing your off-screen reputation starts with caring for the customers you already have. A good word from a close friend speaks volumes about the type of company customers are dealing with.
Building an Off Screen Reputation
“If I was down to my last dollar, I’d spend it on public relations.” - Bill Gates
Whether Bill Gates actually said that has been the source of much debate, but the sentiment holds true. Protecting the reputation of your company is a good investment. If you’re looking to build a better-off screen reputation, here are three areas to focus on:
- Build a great end-to-end customer experience: Ensure every customer has a great experience purchasing from your store, even after their money is already in your hands. Post-purchase service is key to building trust and winning the loyalty of repeat customers. When things do go wrong, offering a fair return policy can help restore faith.
- Connect in person: eCommerce can be seen as an impersonal business. Your customers spend most of their time looking at your website, not talking to a human. If you have an opportunity to connect in person, take advantage of it! This could be participating in industry trade shows, offering customer events or arranging in-store visits.
- Develop ambitious company values: To develop a good reputation, you need to know what you want to be known for. Setting firm company values and standing for something is a great way to develop a strong off-screen reputation. Whether it’s committing to only purchasing from local artists, donating all returned clothing or embracing radical transparency, strong company values give customers a clear picture of why you do what you do.
Reputation Leads to Trust Leads to Sales
Your off screen reputation builds buyer trust through word-of-mouth referrals. And customers love to buy from companies that they trust and identify with.
Time and resources spent building out your offline reputation pay off. Keep focused on the end-to-end customer experience and watch your sales continue to grow!