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Customer rants and raves provide valuable data for Philips

Jessica Twentyman Profile picture for user jtwentyman June 17, 2015
Summary:
Dutch electronic giant Philips is using data drawn from customer reviews and ratings to market its products, drive new product development and even appraise its own staff.

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From baby bottles to lightbulbs, and from electric toothbrushes to air fryers, Dutch electronics giant Philips manufactures a wide range of consumer products - and as prosaic as some of them may sound, customers have a great deal to say about them. Sometimes, their comments are positive. Other times, not so much.

Whether customers rant or rave, their online reviews and ratings matter as a rich source of insight for senior executives, says Patrick Van Straalen, the company’s senior digital campaign enablement manager. They also have a significant impact on revenues: customer who look at reviews on Philips.com generate up to 180% more buy-button clicks that those who don’t.

Philips has been using social shopping SaaS provider Bazaarvoice to collect, manage and publish ratings and reviews since 2011, when it first rolled out this capability to customers in six markets: US, UK, the Netherlands, Germany, France and Brazil. Today, customers in 42 countries can rate and review Philips products - and to date, the company’s collected almost 280,000 individual reviews from them. Says Van Straalen:

That’s a lot for a manufacturer. And Philips.com isn’t the only place for customers to find these reviews and ratings. Around 90 percent of our customers don’t buy directly from our site; they’ll go to Amazon.com or a retailer’s site. So through syndication, we also publish our reviews and ratings content to the sites of around 70 major retailers, including Walmart and BestBuy in the US and Boots, Tesco and Argos in the UK.

A lot of effort is put into driving customers to its product review sites, he adds. When a customer registers their new Philips product online as part of the warranty process, they’re sent an email encouraging them to write a review that will then be syndicated to retail partners.

In addition, the company uses social media (in particular, its country-specific Facebook pages) to attract reviews. In Turkey, for example, customers of a particular model of vacuum cleaner were entered into a sweepstake if they submitted their reviews of it. That campaign attracted 1,600 new reviews over two weeks.

(The only stipulation with this kind of incentivisation is that customers must state explicitly in their review that they are submitting it as part of a competition - but Van Straalen and his team are working on a yes/no one-button click that will make it easier for customers to make their disclosure.)

But online reviews and ratings aren’t just confined to ecommence sites, Van Straalen adds. The content gathered in this way is increasingly used elsewhere. For example, Philips is now using reviews and ratings content to make online banner ads more compelling. And it’s starting to show up in the offline world, too, on the physical packaging of products. The company recently produced new packaging in France, the Netherlands and Germany for a best-selling model of drip-filter coffee machine, which now includes customer review information, says Van Straalen:

We find that, for certain products, a lot of customer decision-making happens right at the shelf of the retailer. If you’re talking about a $30 coffee machine, for example, you’re not likely to do a whole lot of online research before you buy. You’ll probably just go to the store and see what the retailer has in stock. So using ratings and review content here is about us having impact in a physical store, right at the point when a customer chooses one product over another.

Developing plans

Ratings and reviews also drive product development plans at Philips. In the case of a Philips latte maker, for example, customer reviews were starting to reveal dissatisfaction over the fact that the machine’s hose collected dust in a way that buyers felt was unhygienic. Others complained that the water tank on the back of the machine was impractically located, forcing them to drag out the device from the back of their kitchen counter whenever they wanted to fill it. Plus, some buyers weren’t too thrilled by the ‘funky’ colour scheme of the machines, with German customers in particular saying they’d prefer their latte maker in a more sober black. Says Van Straalen:

All this information is passed on to product development and we’ve not got a formal process in place for this knowledge transfer to occur. In fact, me and my team spend a lot of our time coaching product managers around the world how to use customer review information to inform their work. It’s about getting them interpret and analyse that content in the same ways that we do - and to take the voice of the customer just as seriously.

Some products have even been withdrawn if they’re high-margin, high-volume products that show an average rating that’s below our expectations as our company. That’s because there’s a threat of damage to our reputation and our brand, so it’s vital to take these products off the shelves and seriously consider what changes our customers may be asking us to make.

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There’s another very good reason for very senior product managers to listen to what customers are saying: that feedback increasingly forms part of their own internal performance reviews at the company. Van Straalen believes that Philips may be the only company in the world currently using ratings and reviews content as part of the HR process:

As long as customers stick to the moderation rules, regarding the use profane language and so on, it doesn’t matter if reviews are good or bad. Obviously we’d prefer to see good reviews - but we live in the real world. Good and bad reviews are all data and they have a huge value to us as a company. Our goal is to use that data in as many ways that we can.

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