Speaking Sensis

I’d like to officially welcome Yelp to Australia today, a global leader in local ratings and reviews. I encourage everyone to visit www.yelp.com.au and share their experiences of local businesses by posting ratings and reviews.

Why rate and review? Aside from the fact that it’s the fun and easy way to talk about great (and not so great) local businesses, it’s sites like Yelp that are playing a big part in how we Aussies make purchasing decisions these days.

According to the Sensis® Social Media Report, social networkers read an average of six reviews before making a buying decision. So rather than waiting for a review of a business to be published online or in the local paper and then deciding whether or not to give the business a go, we are getting on the front foot and seeking these reviews out for ourselves. Yelp.com.au makes this very easy. 

Yelp first started in San Francisco in 2004 and today’s launch in Australia marks the 13th country it has opened its online doors in. In Q3 2011 the online ratings and reviews company received an average of 61 million visitors a month (up 63 per cent from the same time last year), has generated 22 million reviews on its global network as of September 2011 (an increase of 66 per cent over the same time in 2010) and saw an average of five million unique views a month on its mobile app. With results like these, it’s evident that ratings and reviews are becoming an increasingly important component of consumers’ pre-purchase behaviour.

While I’m personally excited about Yelp’s launch in Australia today, it’s also a big coup for Sensis®’ Yellow Pages®, after announcing our ground-breaking partnership with Yelp back in July. 

Yellow Pages® local business listing data has been integrated into Yelp.com.au (including mobile site and apps), which means our Yellow Pages® advertisers will be able to be found by more potential customers. And in a couple of weeks, Yelp Reviews and Ratings will be displayed on Yellow Pages® Online and Mobile. I’ll tell you more about that shortly. In the meantime, visit www.yelp.com.au to rate and review a local business near you.

Whether you consciously think about it or not, the life of a retailer, online or off, is steeped in behavioural psychology.  As we head towards Christmas, here’s a case study on how to move your customer from buying to owning.

Imagine you are a boutique fashion retailer. Time and again people come in to your store, start their walk around the perimeter, acknowledge your greeting with a strained smile and maybe a “just having a browse” mumble, and then exit without trying any of the clothes.  That’s me – I’m your nightmare. Money to spend, interest in buying, but inert when it comes to engaging with the purchase process.

How is it then that I happily and impulsively spent a few hundred dollars on a dress that I hadn’t imagined owning before I stepped into the store?

Great salespeople are a great experience. 

What got me into the store?
I’m pretty basic – it was a sale sign.  But I wouldn’t have bothered chasing a sale unless the window display was evocative.  Subtle lighting, natural tones, textured faux-stone display materials – the store fit out made me feel like a was entering a place of nature.  And what’s more pleasant than strolling around a place of natural beauty?  It felt special, the clothes were obviously cared for, and the warmth generated by the store rippled through me as I started my perimeter stroll. 

How did the sales assistant engage me? 
Catherine (yes I learnt her name through the exercise) greeted me from a non-encroaching distance. “Anything I was looking for?” “No just browsing.”  But then her genius move – “Can I try this jacket on you?”. And she did.  She effectively was asking a favour of me – and through so doing she won my trust because the jacket was great.  But then, “There’s a dress that would really suit you” – and off she skipped to the other side of the store, presenting the dress for my reaction.  She’d already managed to engage me through the jacket and I knew through this exercise she had expertly appraised my figure and gained my trust.  Most of all, it felt like she was truly interested in me not in making a sale. She had invested herself in the experience.

How did she make the sale?
The dress went on and was great. But then the show began. The other sales assistant tagged teamed as they demonstrated all the features – yes features – of this wonder dress. Tie it this way, tie it that way – multiple looks as a result of this beautifully, cleverly and practically designed dress.  Add a cummerbund and add another layer of versatility. 

Was I thinking price at this point…kind of. But by that stage it was a question of how much I would pay, not whether I would.  By that point I could have justified almost any price because I had moved way beyond ‘buying’ and was already in ‘owning’ land. And did I feel I was being sold to? No. I felt like they were helping me.

So what are the lessons for small business owners and operators?

Make the experience concrete not abstract – asking me if I was looking for something in particular would have been less effective than asking me to try on a jacket.  For online sites, telling me to click for the product catalogue is less effective than telling me to click to view details, availability and pricing for 23 skirts.

Create a consistent experience throughout the process – in this case, the store fit-out was consistent with both the clothes and the warm attitude of the staff.  Don’t set up a consumer campaign that celebrates fun, connection and happiness if you grind your customers down with a bureaucratic, boring and cumbersome purchase experience – you’ll confuse people about your brand integrity and savage your conversion rate.

Consider reciprocation – asking me for a favour was a way of making the relationship two way.  I was then prone to ask the sales assistant a “favour” ie I was more prone to ask for what I wanted – the ‘power balance’ was equalised.  Seems strange given I was the buyer with the purchasing power, but when dealing with an inert shopper like me, it was a great strategy to get me to act.  How can you create a two way relationship with your customers with the aim of making them more comfortable to do business with you?

No doubt retail is a tough gig so in the lead up to the Christmas season I’d encourage you to take a fresh look at the interactions you have with your customers and see whether some behavioural tweaking is in order. It might just make the difference.

News Limited recently announced how it plans to tackle one of the big challenges facing the newspaper industry: how to charge for digital news services. The Australian website will have a paywall established in the next few months which will create a subscriber-only service by blocking digital content to those who have not subscribed to the service.

Whilst a paywall is somewhat particular to content providers, there are lessons for all businesses around why ‘free’ is such a powerful behavioural concept and what to do if you want to introduce a charge for something that was previously available for free.

So let’s start by looking at chocolate.

The persuasive power of ‘free’
In an experiment outlined in Dan Ariely’s “Predictably Irrational: The Hidden Forces That Shape Our Decisions”¹, participants were given the choice of two chocolates; high quality Lindt or, the less expensive Hersheys. Through the course of various experiments, the price of each brand was manipulated to see how consumer rationality was affected. In other words, what was the point at which price changed our judgment of what we were willing to experience from our consumption of chocolate. When the Lindt was 15 cents and Hersheys 1 cent, 73% chose Lindt.  Makes sense. We are willing to pay more when we expect to receive a quality experience.

But then life got interesting.  Prices were dropped by 1 cent. Lindt was therefore 14 cents and Hersheys, free.  Suddenly Hersheys gobbled up 69% of the customers, reversing the earlier trend. Was it the one cent price drop? No. It was impact of ‘free’. The majority of participants were now willing to act in spite of the lower level of anticipated pleasure just because the chocolate was free. 

Based on the study, it seems that ‘free’ dramatically impacts our assessment of what we are willing to experience.
Ariely goes on to speculate that the reason we are so swayed by ‘free’ is that there is no downside. In most transactions, we weigh up the pros and cons, rewards and risks, but when something is ‘free’, there is only upside.

This is the behavioural principle of loss aversion, where we are wired to avoid loss more than seek gain.  In the case of chocolates, participants were unwilling to trade Hersheys for Lindt even when they had only to pay one cent for the lower quality brand.  The risk of a less enjoyable experience was still too great. Take away that risk by making Hersheys free, and the game changed.

Introducing a charge for a free service
That’s fine for chocolate, but what does it have to do with a paywall where News Limited are trying to introduce a fee?  After all, it’s a bit like charging for Hersheys when we are used to pigging out for free.  

It shows how difficult a task News Limited have ahead of them because ‘free’ is one of the most persuasive of forces.  So here are some thoughts on how to reverse engineer free in order to transition to a paid service:

Differentiate the product – if a brand wants to charge for something that they have previously given away for free, they need to change the product.  For chocolate, it may mean changing the ingredients or packaging, or emphasising something new about the product that people didn’t know (eg now from sustainably managed cocoa suppliers).  For News Limited, it could mean re-skinning the online experience, introducing new content and/or features, and new marquee journalists.

Reframe the pricing – News Limited customers will be paying between $2.95 and $7.95 instead of zero.  These are small amounts relative to most things, but not relative to free, so News Limited needs to contextualise the price for its customers.  For example, less than a gym membership, less than a zone two train ticket, less than what you spend on lunch per day to get 24/7 access to real-time Australian news.

Introduce decoys – Pricing decoys are a very effective behavioural technique because we assess prices relative to others.  At the moment on News Limited’s subscription page for The Australian are offering a digital pass for $2.95/week, digital plus weekend papers for $4.50 or digital plus Monday-Saturday papers for $7.95.  Here it would have been helpful for them to also offer a ‘decoy’ 7 day print subscription on the same sign up page. Why? It sets a value for the print subscription that makes the print and digital bundles look more attractive. (On The Australian’s offers page which is buried a few clicks in they have moved in this direction but made the mistake of making print look the better deal at $2/week).

Get it over quickly – the behavioural principle of adaptation means we get over bad news more quickly if we are not reminded of it.  News Limited will have to be careful how it treats its customers throughout the sign-up, sign-in and billing process, with the aim to have the pricing recede in the customer’s consciousness. 

Demarcate the process – Anyone who has used iTunes may have noticed that the payment by credit card is confirmed a few days after your purchase. The effect of this is a disconnection of the process (purchasing music) from the pain (payment), which means we are less likely to remember that our downloads have cost us. News Limited should likewise consider how it finalises the payment process with the customer.

Guilt – don’t under estimate how guilt can turn free-loaders into paying customers.  Of course there will always be some people who take without giving, but most of us are susceptible to contra-free loading.  This is our innate desire to work for reward rather than just get rewarded.  Don’t scoff.  A recent move by the Indiana Museum of Art to move to free entry resulted in a 3% increase in paid memberships.
 
The key lesson to take away from this discussion of chocolates and paywalls is this; offering something for ‘free’ changes the game.  It comes with significant behavioural implications that can work well for your business to stimulate volume, but can also change how your product is perceived.  Whilst not impossible to reengineer a free service as paid, it is extremely tricky and therefore should be used with due consideration to your longer term and competitive goals.
  
1. “Predictably Irrational;: The Hidden Forces that Shape Our Decisions”, Dan Ariely, HarperCollins; 2008

It’s a fact that consumers don’t always do what you think they’ll do. That’s because they’re people… individuals… not robots. In this new series for Speaking Sensis, Bri Williams talks about Behavioural Economics, or how a real understanding of consumer decision making can benefit your business.

Some days it just seems too hard. You offer deals to your customers that should work but they just don’t fly.  And then other days, for no apparent reason, customers are beating down your door looking to do business.   How on earth can you get into the minds of your customers to find out what’s going on?

Welcome to Behavioural Economics.  An increasingly popular field, used by both UK and US governments to affect policy change and advertising agencies to improve marketing effectiveness, Behavioural Economics nestles in between economics and consumer psychology. The central mantra of Behavioural Economics is that we humans are irrational. Now, before you get outraged and debate the point, research from Behavioural Economics is about our economic irrationality. In other words, the decisions we make don’t always result in the best economic outcome for ourselves. 

That maybe true of others, you’re thinking, but not me!  Well, think about owning a car that you use only occasionally instead of renting one when required; paying for a 2GB data plan when your internet usage is nowhere near that level; driving an extra 10 minutes to get a 4c off a litre of petrol (the equivalent ‘discount’ you could have saved by spending a few dollars less at their supermarket),  saving your bonus pay money (in your mental bank account) to buy something special rather than using it on bills and buying something special later.  All of these simple, almost daily decisions are prime examples of economic irrationality.  

My favourite example is the TV show “Deal or No Deal”.  Seeing the contestants reject diminishing “bank offers” as their odds slip away in the hope of their fortune changing – despite the economic benefit of taking the deal – is both infuriating and hilarious.   But let us not get cocky.  We all are influenced by factors other than pure economics, your customers included.  And therein lies the opportunity.

There are tried and tested techniques in Behavioural Economics that will help you understand consumer irrationality and then use that knowledge to appeal to customers.  Behavioural Economics sheds light on what makes group buying compelling, how to structure sign-ups for marketing, the role of “free” and discounting, how to communicate a price rise, improvements to loyalty programs, what your customer service consultants should be saying…the list is expansive.

Sound good? Well, in the coming series of Speaking Sensis we will be examining these and other business tips from the field of Behavioural Economics, so look out for our next edition coming soon.

Sensis’ and Yelp partner to create new opportunities for Australia’s local searchers.

Today is an exciting day for Sensis as we announce our latest ground-breaking partnership between Yellow Pages® and Yelp, the global leader in local reviews and ratings. Together we’ll work with Yelp to launch an Australian version of the Yelp website, where Aussie’s will be invited to rate their dealings with local businesses and write reviews about their experiences.

Ratings and reviews are growing in popularity in the Australian market place. Did you know that, according to the recent Sensis Social Media Report, almost two thirds of social network users (63 per cent) read online reviews before they make buying decisions? Or that they read an average of six reviews each time? Given this enormous interest, we believe this partnership will be a huge win for the Australian community.

When Yelp launches in Australia they will integrate Sensis’ Yellow Pages® local business listing data into yelp.com.au.and, tap into our leading local sales force to launch and embed yelp.com.au in the Australian market. 

Not only does this mean the launch of a leading new ratings and review website in Australia, but through the partnership, Sensis will syndicate Yelp content, ratings and reviews to yellowpages.com.au, Yellow Pages® Mobile and the Yellow Pages® iPhone application.

So our advertisers can be really excited about the opportunities this partnership presents to them in the form of a deeper way to engage with potential customers online.

Yelp is a really exciting business to work with and I’m personally looking forward to the next couple of months as we work together to bring this leading product to market.

Yelp launched in 2004 and has rapidly expanded its user-generated ratings and reviews websites across North America and Europe. In fact, in June 2011, Yelp had more than 53 million unique visitors worldwide and to date more than 20 million local reviews of businesses have been posted to Yelp sites.

We anticipate yelp.com.au will be fully operational by the end of 2011 with Sensis’ Yellow Pages® media advisors offering Yelp advertising options to customers in 2012.

Simon B

The Sensis® Social Media Report backs up the views of social media experts by showing that engagement is critical to social marketing.

One of the most significant findings of the Sensis® Social Media Report is that consumer uptake of social media far outstrips business uptake. This leads to the conclusion that Australian businesses need to do more to ‘follow the audience’.

But, how?

For a long time, the experts have been telling us the secret is engagement: being able to connect with consumers in a relationship that benefits all.

And the Sensis® Social Media Report bears this out.

Overall, Australian social media users seem roughly split on the legitimacy of advertising in social media. About half don’t like it, while the other half either don’t mind or welcome it.

That’s not so bad. But the skies become less sunny when you consider that only 29% of people say they take notice of advertising on social media. And (coincidentally), only 29% say they sometimes click on social media ads.

In other words, while the acceptance of social media advertising isn’t too bad, we’ve got a fair way to go before it becomes really effective.

So does that mean the social media doors are closed for marketers?

Absolutely not!

You see, in the midst of all this advertising apathy, 63% of social media users say they read online reviews and blogs when searching for information about products and services.

And those consumers expect to read an average of six reviews before making a decision.

But that’s not all. Social media users also have a voracious appetite for something extra. 57% want discounts, 45% want give-aways, 41% want invitations to events and 36% want coupons.

In other words, while social media users aren’t reacting to ads, they’re really big on information and incentives.

And that’s where the opportunity lies. There’s value to be had for marketers who try to be useful, rather than try to be snappy.

And that value can be magnified if you can meet people’s needs so well that they openly advocate for you. That’s because, 27% of Internet users have provided online ratings while 24% have posted an online review or blog.

As everyone keeps saying, the potential for social media marketing is huge. But to unlock that value, we need to see consumers as targets for service, not targets for spin.

Okay, have a guess. Which Australian state is first past the post when it comes to social media?

Too easy. With their higher population and access to technology, it’d be NSW and Victoria in a canter.

Right?

Wrong.

In fact the Sensis® Social Media Report has found that our two most populous states sit in the middle when it comes to most measures of social media uptake.

And that there’s one state that stands head and shoulders above the rest… Tasmania.

To show you what I mean, here is a roll call of leading states in the social media stakes.

Most connected: Tasmania
100% of Tasmanians access the Internet. The national average is 94%.

Most social (consumers): Tasmania (by a mile!)
44% of Tasmanian social media users are networking every day compared to a national average of only 30%. However, they average 160 ‘friends, contacts or followers’, which is well under the national average of 217.

Most social (businesses): ACT and Queensland
20% of Queensland and ACT businesses have a social media presence, which is way ahead of the national average of 15%.

Most friendly: Victoria
Victorian social media users have an average of 241 friends or followers each compared to 217 nationally.

Most brand friendly: Tasmania
Tasmania walloped the other states. 39% of Tasmanian social media users follow sites or groups associated with brands, compared to a national average of 20%.

Most bargain friendly: Queensland
16% of Queensland social media users have used group buying sites compared to a national average of 12%.

Most vocal: Tasmania
37% of Tasmanian social media users have written an online review or blog about their views on a product or service. This is way above second placed Northern Territory (28%) and eclipses the national average of 24%. Meanwhile, 67% of Tasmanian social media users have used online reviews or blogs to research product purchases. This is second only to Western Australia on 69%.

I’ve been thinking what might be behind these trends. Is Tassie’s very high uptake of the Internet (100%, as I mentioned before) driving all this social media activity? Or is there a sense of isolation that social media might be remedying? (Interestingly, social media take-up is also relatively strong in NT). Maybe it’s all of the above, but whatever it is, Tasmanians are the savvy social media users to watch!

The Sensis Social Media Report, which was released last week in conjunction with the Australian Interactive Media Indsutry Association, had some interesting things to say about social media trends among older Australians.

HELPING YOU STAY IN TOUCH

It’s no surprise that the uptake of social networks in Australia is heavily weighted to teens and young adults. According to the Sensis Social Media Report (which is available for free download from the Sensis corporate site), 93% of 14 – 29 year olds have used social media at some point compared to only 31% for over 65s.

While uptake maybe relatively low, the reasons why middle aged and senior Australians are using social media make for interesting reading.

Their reasons suggest that social media could have an enormous role to play in enriching the lives of older Australians in the years to come.

Consider this:

• 60% of over 50s use social media to share photos or videos. This is second only to 20 – 29 year olds and well above the 56% for all Australians.
• 18% of over 65s use social media to meet new friends – this proportion is exceeded only by 14 – 29 year olds.
• 14% of over 65s are using social media ‘to find people with the same interests that you have’. That’s bang on the average for all people and well ahead of 20 – 39 year olds and 50 – 64 year olds.

Growing old must be difficult for many Australians. You spend decades building a life, a family and a network of friends; only to find that they slowly ebb away due to an increasing loss of mobility.

I’ve seen this myself over the last few years. Before they made the trip to aged care, I watched my parents gradually become prisoners in their own home. Due to growing immobility, their ability to socialise – something the rest of us take for granted – became more and more difficult; to the point where they only rarely left the house and hardly ever saw their friends.

Social networks bring with them an enormous opportunity to alleviate the loneliness of advancing age. They offer a way to talk, share and even play with family and friends regardless of distance and mobility issues.

Which, in an ageing country like Australia, could become very important in the future.

HELPING YOU SHOP

Of course, many middle aged and senior Australians are as mobile as ever and living very active lives.

Which leads to another interesting observation about the use of social media in Australia.

You see, Australians over the age of fifty are showing a tendency to rely heavily on social media for purchase decisions.

• 17% of over 65s use social media to research holiday destinations or travel offers: the highest percentage for all age groups
• And 17% of 50 – 64 year olds, use social media ‘to research other products or services you might want to buy’. This response shared the top spot with 12 – 19 year olds.

There’s a simple message here. You wouldn’t normally think about over 50s as an audience for social media marketing.

But, given their spending power and propensity to use social media to research purchases, social media could be a significant opportunity for over 50s marketers in the years to come.

As the distribution of the 2011/2012 White Pages® books in Melbourne and Sydney starts, there will be a few changes to the way we do things.

In the past, the White Pages® Residential Book was delivered to virtually every household in Australia, but the residential book will be distributed differently in Melbourne and Sydney this year.

If you live in Melbourne or Sydney, the 2011/2012 White Pages® Residential Book will not be automatically delivered to your home.

We’re still delivering the Business & Government book, as we have done in previous years.  And we’re still printing residential books for these cities.  If you want a residential book, there are three simple ways to order a copy:

- Call 1800 008 292,
- Visit www.directoryselect.com.au, or
- Collect a copy from your local Australia Post outlet.

This information will also be included on the front cover and on page two of the Business and Government book which will continue to be distributed to virtually every household in Australia.

[In Melbourne, book distribution begins on 28 May and in Sydney distribution starts on 9 July

Other than Melbourne and Sydney, there is no change to the way that the White Pages Residential Book is distributed to households in other markets.

We think this is a positive change which reflects the way that consumers now search for residential contact information, as well as supporting those Australians who still value and use the Residential books.

Most importantly, anyone who wants a copy of the White Pages® Residential Book in Melbourne and Sydney will still get it.

As a self-professed iPad convert, not only is this week exciting for me personally but it also marks a milestone for the team here at Sensis as we’ve just launched the much anticipated Yellow Pages iPad app.

The app, developed by our talented in-house team over the past few months, brings together for the first time our digital and print content in the one device. It also adds another layer to our multi-channel platform strategy – now spanning print, online, mobile, search engines, iPhone, Android (to name a few!) and now… iPad!

So, the reach of Yellow Pages print and digital products extends to another new audience this week which means Yellow Pages advertisers now have even more ways to reach consumers, and people searching for businesses now have a new way to access the information.

A bit about the new app – it’s free to download and includes all the information you’d expect from Yellow Pages, and it comes in two versatile views so you can choose how to search and view businesses on your iPad:

Business listings are displayed on an interactive combined map and list view

Or you can check out the business ‘ad view’ which displays Yellow Pages book ads based on relevance to the search term – in other words, it’s the digital version of a print search for many of our ads

The app allows you to FIND businesses nearby, SHARE them with friends and SAVE them for later.

And we’re not talking about one-line listings here either! You should check out the content – the listings can include contact details, product and service information, a photo gallery, videos and links to social media.

The app lets you search by name, category or keyword and as you type a list of possible options are presented so you’ll find what you’re looking for faster. There are a number of other helpful features:

See results for businesses ‘nearest to you’ (your current location) or at a predefined location

Share listings with your friends using Send to Mobile or Send to Email

Save business details to ‘contacts’ so you can access them later

We can’t wait to get this app out amongst the iPad community and hear what people think – so make sure you download it now and post your feedback after you’ve used it.

You’ll find the app under Yellow Pages in the App store.