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Customer reviews spell loyalty, service for Petco.com

A recent Valentine's Day promotion from Petco.com that centered on customer reviews paid off with increased conversion, higher spending and an involved community.

Customers who love their pets and love Petco.com proved a winning Valentine's combination for the San Diego-based company this year.

The online arm of national pet store chain Petco Animal Supplies Inc. recently saw its site-wide conversions increase 19% in the wake of a Valentine's Day promotion that rewarded customers who took part in its user review program.

Petco.com encourages customers to write reviews of its suppliers' products. BazaarVoice Inc., an Austin, Texas-based company that provides software and services for managing customer reviews, manages and hosts the reviews.

"We try to run some sort of contest once per quarter," said Tami Reano, user experience manager with Petco.com. "They're very popular because of the community aspect. It builds up our review database."

For the Valentine's Day promotion, Petco.com replaced its usual one-to-five "paws" rating system with "hearts," and participants were entered to win a $500 Petco.com shopping spree for each review they wrote. It's an initiative that pays off in both the short and long term, according to Petco executives.

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"Customers who write reviews are more engaged with the site and come back to the site more often," said John Lazarchic, vice president of e-commerce for Petco. "Our goals are twofold: one, to increase the content on the website, which adds value to the website; and two, to build loyalty. If you take the time to write, people tend to come back and see what others say. They now own part of the website."

The promotion helped Petco.com beat out its competitor Petsmart.com for the month of February. According to Compete.com, a service that analyzes website trends, Petco.com had 1.28 million unique visitors in the month, while Petsmart.com had 1.13 million. The two sites had roughly equal visits in December.

The company also saw a 19% increase in site-wide conversion during the campaign, the average spend of users who visited the Petco Love Page increased threefold, and the conversion rate for Love Page visitors compared to overall visitors was three times as high.

"It definitely reinforced that -- despite the fact we've done six or seven of these -- it doesn't get old with the consumer," Lazarchic said.

Petco.com is planning to expand on its customer review program. Currently, it's integrating BazaarVoice with its email marketing system to alert customers when there's a review of a product they're interested in or someone else has reviewed the same product. Lazarchic said that the company is also in the process of integrating data from its roughly 850 stores around the country in its Epiphany CRM system with its Web analytics system.

Right now, Petco.com is hoping to leverage customer reviews into customer service. A new "Ask and Answer" function in the system encourages customers to ask questions and provide answers about products listed on Petco.com.

"So far, it's going really well in terms of running lots and lots of questions," Lazarchic said. "There are challenges in getting people to answer. We think another contest will energize that."

The customer review program required a bit of a leap of faith for the company. There wasn't much opposition from Petco because, as Lazarchic said, "I'm not sure we gave the company an option." Suppliers were a tougher sell, though. They had to be convinced that customers writing reviews that might turn out negative would be beneficial in the long term. The results from a 90-day trial made that pitch easier.

"The results were so positive and consumer response was so strong, there was almost no going back," Lazarchic said. "Even vendors who have had less than stellar reviews, most of them have been very accommodating. There are a number who have stepped up and resolved issues, and one vendor went out and re-engineered the product and had us send the customers new free products based on their feedback."

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