In 2009, an innocuous t-shirt graphic of three wolves howling at the moon attracted the attention of online shopper Brian Govern, a Rutgers University law student browsing on Amazon.
In a whimsical mood, Govern tapped out a satirical product review, claiming the “Three Wolf Moon” shirt was magic and made him irresistible to women.
Other Amazon reviewers picked up on the theme and wrote their own funny reviews praising the mysterious life-changing powers of the wolves. Within days, the joke went viral – and although Govern himself never bought a shirt, it soon became a bestseller on Amazon.
According to The New York Times, the Mountain t-shirt company in Keene, New Hampshire, went from selling two to three shirts per day to selling 100 every hour. The wolves wound up spending nearly 200 days on Amazon.com’s Top 100 list.
Not every customer review is going to launch a product into the retail stratosphere, but online comments – those of the non-facetious kind – contain valuable insights about the extremes of the shopping experience. Think about it: people only bother to share their thoughts with a company if they are either very pleased or very unhappy. Few reviewers bother to write about an average experience.
Smart Dynamic Pricing involves extracting consumer demand signals – valuable customer data from reviews as well as social media messages – and factoring them into pricing decisions for both personal offers and forecasting future purchasing trends. It is an extra layer of intelligence applied to Dynamic Pricing, which uses a Rules Engine to automatically raise, lower or keep prices the same based on supply and demand, the weather and even the time of day.
Despite the concern about fake Amazon reviews – not the silly kind like the wolves but when companies shamelessly review their own products – the numbers don’t lie. A huge amount of consumer reviews across the Web indicates an organic demand for that item.
Below is a graph showing the increase in search engine traffic for the LG Electronics HBS-730 Bluetooth Headset in relationship to the growing number of positive reviews. People innately trust what their fellow consumers think more than a company’s official marketing materials.
To learn more how you can tap into the power of customer reviews to make better pricing decisions, download a complimentary copy of our new eBook, “Pricing Intelligence 2.0: The Essential Guide to Price Intelligence and Dynamic Pricing,” for retailers and brands.
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Mihir Kittur is a Co-founder and Chief Innovation Officer at Ugam. He oversees sales, marketing and innovation and works with leading retailers and brands with insights and analytics solutions around their category decisions to improve business performance.