Using Past Customers to Help New Shoppers
Ecommerce merchants strive to answer questions from shoppers. Relevant, helpful answers presumably increase conversion rates. We recently spoke with George Eberstadt, founder and CEO of TurnTo, about his company’s system that relies on past customers to answer questions from prospective ones.
Practical Ecommerce: What is TurnTo?
George Eberstadt: “TurnTo provides a social question-and-answer utility to online stores. It runs on the product detail page of the storefront and helps shoppers get answers to questions from people who really bought those products in the past.”
PEC: You’re CEO and founder of TurnTo. When did you launch the company?
Eberstadt: “We started this about four and a half years ago. But the first year and a half or so was focused on a related product line. So in Internet years, we’re probably three years old.”
PEC: Do you own the company?
Eberstadt: “We’re privately funded — based in New York City.”
PEC: With ratings and reviews, general social media dialog, and the many sophisticated merchandising features that exist, why do online shoppers need another method to investigate a product?
Eberstadt: “Certainly, ratings and reviews are still the gold standard for customer feedback about products, and almost all the stores that use our system already have customer ratings and reviews when they decide to add social Q&A on top of that.
“There are a bunch of cases where Q&A can be really helpful, like when there are no reviews yet. The ability to reach out and get the product information you need [from social Q&A] is helpful. At the opposite end of the spectrum, if there are 2,000 reviews and you don‘t really want to plow through all 2,000 to find the answer to the question you need, being able to ask a question is the more efficient way to find the answer. There are some people who simply prefer to get information in the more interactive way rather than researching for it, and there are people who are suspicious of the credibility of reviews.”
PEC: Describe the process, please, for your system. What does a shopper see? How does it work?
Eberstadt: “When a shopper is on a product detail page, she will see a button that says ‘Got questions? Get fast answers from people who really bought this product,’ or ‘See 5 questions and 25 answers,’ and she can click anywhere on that utility. She’ll be taken to the Q&A area on the page where there will be an area to submit a new question, and all the dialog that’s already been captured is available. She can browse through the questions and the answers, or there’s a search utility so she can easily see whether her question has already been asked and answered.
“As shoppers submit a question, this is where the TurnTo special sauce comes in. To make sure that we really deliver on the promise to have answers, we take that question and we email it to people who brought the product in the past.”
PEC: Do those past customers know they’re going to be receiving the email?
Eberstadt: “It’s treated as a marketing email, so those people have agreed to accept that kind of communication from the store, and the message explains very clearly what this is all about. There are two key links in the question email. One says ‘Answer this question.’ and one says ‘Don’t send any more questions.’
“Just to give you a sense of how well received this email typically is, on average that email gets answered at an 8 percent rate, whereas the opt out rate is only 0.2 percent, on average. Most of our stores tell us this is one of their single best performing marketing emails, with numbers like that.”
PEC: Eight percent of past customers answer the email?
Eberstadt: “The open rate on the question email is about 30 percent, and the click through rate is typically about 10 percent, and then there’s a small fall off, so about 8 percent of all the people who received the email actually submit an answer. Because that rate is so high, it means you don’t actually need to send the question to that many people to get an answer. Typically we’ll coach our stores to make 60 the target number of people to receive any particular question. That means on average each question would get about 5 answers from past customers. Most of those answers would come back within the first 24 hours. On average the first answer gets sent back within one hour of when someone first asked the question.”
PEC: Do the past customers get paid anything for it?
Eberstadt: “We have a few stores who have integrated a loyalty program, but we haven’t seen that that makes a huge difference. Whatever their motivations, it doesn’t require an incentive.”
PEC: If I’m a merchant, I may be sensitive about emails I’m sending to past customers because I want those customers to come back and buy from me again. Thoughts on that?
Eberstadt: “Let me share some general statistics about the conversion effect of the whole tool, and I’ll save that particular case for my last number. What we see is that people who ask questions while shopping typically convert at a rate between 5 and 11 times higher than the baseline for the store. Now obviously that’s a well-qualified pool. People who open the utility and read Q&A dialog that others have posted typically convert at a rate between 3 and 7 times higher than the baseline for the store. The conversion rate of past customers who come back to answer questions is on average 2 to 3 times higher than the baseline for the store. So again, they’re past customers. It’s a well-qualified pool. But these are people who just came back to answer questions. They didn’t come back to shop.”
PEC: How much does your product cost?
Eberstadt: “It’s a tiered pricing model, with an annual contract. Our smallest stores typically pay a few hundred a month for the system. Our larger stores pay a few thousand dollars a month.
“It’s a fixed fee. The amount of the fee is based overall on the size of the store, and we try and correlate it to value, but it’s not a cost-per-acquisition kind of model. It’s a flat annual fee once the price has been determined.”
PEC: We have many different readers with many different carts. Does your solution integrate with all shopping carts?
Eberstadt: “There’s about a dozen that we have live integrations with right now. We have packaged integrations with Magento and Demandware. We have integrations with Volusion and on Yahoo! stores, and many more. We do custom solutions, if it’s easy to access the data. So our system is pretty flexible. We aim to be able to work on a very wide range of shopping carts.”
PEC: If a company is using a cart that requires a custom integration — either a hosted cart or a licensed cart — is that going to cost extra money?
Eberstadt: “The first and the last question is what platform do you run on, and if this is one that we know we have trouble on, we’ll say what the limitations are. We charge a flat setup fee that’s usually a couple months worth of the annual license. But we don’t charge any more than that to do the work based on what the particular cart is.”
PEC: Anything else?
Eberstadt: “While conversion is part of the value here, another big part is the search-engine-optimization benefit. Having fresh, changing user-generated content that’s indexable directly on the product detail page has really become best practice for getting SEO organic traffic.”