Advantages of Speaking Up

Amid a struggling economy, consumers continue to cut back on spending and remain focused on purchasing necessities. In response, many retailers want to provide consumers with the best tools that can build confidence when making purchase decisions. For Alpaca Direct, that tool is online consumer reviews.

Brentwood, Calif.-based Alpaca Direct, a small multichannel retailer that specializes in selling obscure fiber (Alpaca) products, has doubled revenue each year since its inception four years ago. Eager to keep this success at its one bricks-and-mortar location in Northern California and on its site, AlpacaDirect.com , the company knew it needed to attract new customers to its site if it wanted to ring up more sales. This is a pretty tall order as many chains struggle to just break even in this economy.

But for Alpaca, “The solution was simple: We added customers reviews,” said CEO Jim Hobart. “Customer reviews have helped get the word out about our products and our company, and build consumer trust even during the recession,” he added.

Alpaca Direct got the idea from a tried-and-true practice: customer surveys. It regularly conducted polls to learn about customer experiences. Alpaca knew that if it expanded the voice of its positive customer feedback, the company could help other shoppers make better purchasing decisions.

“People are being extra-cautious right now about how they spend their dollars, so we thought the voice of thousands of our happy customers would help us stand above the competition,” Hobart said.

Although the company usually builds its online features in-house, Alpaca Direct turned to San Francisco-based PowerReviews to apply reviews and ratings to all 4,000 specialty products listed on its site.

“Our developers were pushing to build a customer-reviews feature, but when we looked at the depth and complexity offered by PowerReviews Express, it became obvious that the return on investment of their solution was much more favorable,” he reported.

Tailored for small retailers, PowerReviews Express uses much of the same functionality found in its Enterprise version designed for larger retailers. The Enterprise product’s business model allows companies with more than $10 million in online sales to implement the solution for free if they share their reviews on Buzzillions.com , a shopping site run by PowerReviews. Smaller companies can use PowerReviews’ Express for a flat fee of about $80 per month.

While some retailers use different tricks to get shoppers to contribute feedback, Alpaca Direct is being proactive. Approximately 21 days after shoppers make a purchase, they receive an e-mail encouraging them to share their experience. And while the retailer has only been using the solution since October, this strategy seems to be working.

“So far, the reviews have helped get our story out, both in terms of the level of service provided and specifics about our products,” Hobart said. “They have also contributed to a noticeable lift in conversion.”

Alpaca Direct is also seeing results in click-stream analysis.

“Our customers write very detailed reviews about how they use our products, and this provides rich, consumer-generated meta-content for increased search-engine optimization,” Hobart said. “Essentially, the consumer is playing a key role in the merchandising process.”

He also said that consumers often spend hours on the site before making a purchase decision.

“Consumers want to make sure they are making well-informed shopping decisions, so it’s our duty to give them as much information as they need,” Hobart said.