After seven years of building Coremetrics into a successful company, I looked at myself in the mirror and decided it was time for a new challenge. Maybe it was the birth of our daughter that inspired me to do something new, but I rationalized my decision in a different way. I used analytics.
You see, I have been thinking about what works online for a long time. I launched my first bulletin board system (BBS) when I was 10 years old on a 110-baud modem. For those of you that haven’t experienced 110 baud, let’s just say you could probably type faster than you can see the text stream across your screen.
But I learned a lot from that experience. I learned that people love to communicate in a textual, interactive medium. And haven’t we always been communicating? More on that later.
At Coremetrics, I focused on analyzing what works online for the world’s largest eCommerce companies. We proved that paid search works, and keyword growth took off (along with Google’s revenues). We proved that affiliate marketing works, and BeFree took off (to be acquired by ValueClick, now a $100 million business annually) and Performics did well also (to be acquired by DoubleClick).
[Performics founder and CEO, Jamie Crouthamel, later invested in Bazaarvoice.] We proved that on-site search works, and Endeca captured the market. We proved that product zoom and virtual catalogs work, and Scene7 grew quickly.
But the one thing that eluded us was measuring the value of customer communication. Then, after leaving Coremetrics to ponder my next big move (in full disclosure, I still serve on the Board of Coremetrics), I came across a Coremetrics client that had rolled out customer ratings and review functionality. I asked them if we could do some analysis of this new “website feature”?
What we learned was astonishing. Customers who read product reviews had a 92% higher conversion than those that didn’t! And this was a clean test because they had actually hidden reviews behind a tab on the product page – meaning the customer had to take an explicit, and measurable, action to view them. Wow. The power of customer communication (word of mouth) quantified.
Being an analytically-driven guy, this was fascinating to me. Intuitively it made sense as we have been communicating about the pros and cons of products and services since the dawn of the early bazaars. But now I had the numbers to prove it. Amazon and eBay had been on to something big, and the rest of the world’s companies needed to wake up to its power.
The entrepreneurial voice inside me was screaming, “This is the next big thing!” This wasn’t only cool and useful (I almost never buy anything online without reading a review), it actually made companies money and lots of it.
So, Brant and I decided to launch Bazaarvoice. We decided our company deserved a different name. This would be a revolution: a revolution in customer satisfaction, insight, and sales.
To read more about why we chose our bizarre name, click here.
Welcome to the age of customer empowerment in our hyper-connected global village! We look forward to being your tour guide in this wild, wild ride.