Bazaarvoice uses the strength of social commerce to help companies build their business. Social commerce employs collaborative social media tools to assist in online buying and selling; to generate user content and customer reviews; and to connect customers to one another, increasing a company’s sales and customer base.
The company was founded in 2005 by Brett Hurt, CEO, and Brant Barton, VP of business development, when they noticed how customer reviews helped online vendors to sell more merchandise in a measurable way. Since then, the founders improved and have created solutions to display, amplify, and analyze customer input to businesses.
Hurt has extensive experience in online marketing and is responsible for guiding Bazaarvoice’s strategy. He started programming when he was seven years old, launched a Bulletin Board System (BBS) on a 110-baud modem when he was ten, and created one of the first Internet-based multiplayer games in 1990. In 1999, he founded Coremetrics and helped it grow into a company that today has over 1,000 clients. Prior to Coremetrics, he was the founder and CEO of Hurt Technology Consulting and BodyMatrix, an online retailer of sports nutrition products. He has also spent several years as a consultant at Deloitte Consulting and Andersen Consulting. With over 15 years of Internet programming experience, Hurt has developed several software applications, marketing analysis solutions, e-commerce platforms, Web-based classroom management applications, virtual communities, multiplayer online games, and (BBS) software.
Co-founder Barton is responsible for Radius – Bazaarvoice’s industry partnership program. Prior to Bazaarvoice, Brant led a team of Web analysts, support engineers, and trainers who serviced more than 400 brands such The Home Depot, QVC, and Victoria’s Secret. He began his career at Sapient and has held founding management team positions at two technology start-up companies, Obsidiana.com and ProcessMAP.
The company has raised close to $20 million thus far: a $4 million Series A from Austin Ventures, First Round Capital, and Constantin Partners in May 2006; an $8.8 million Series B from Battery Ventures and all previous investors in September 2007; and a $7.1 million Series C in June 2008 from Austin Ventures, Battery Ventures, and Constantin Partners.
Bazaarvoice offers companies three platforms with several products to choose from. Its Interaction Suite creates conversations for results, the Amplification Suite channels customers’ voices, and the Intelligence Platform provides real conversations to help companies gain insights. The company operates on a SaaS pricing model, which allows users quick implementation, low start-up costs, and flexibility. Customers pay a monthly or annual fee. There is also a pay-for-performance pricing model that has proven popular. Companies pay anywhere from $2,000 a month to several hundred thousand dollars a year depending on page views, expected volume, and add-on products such as photo and video.
Other companies that offer similar services are Amazon.com, Aggregate Knowledge, alaTest, Buzzillions.com, and Power Reviews. Amazon has been putting up customers’ reviews and ratings on its site for over a decade. It was one of the first companies to patent services such as ‘people who saw this also saw’ and ‘people who bought this also bought.’ Aggregate Knowledge, which we’ve featured here before, provides users of e-commerce sites with recommendations that increase page views and drive up sales. Product Reviews is the company’s main competitor, since it offers inexpensive (and often free) product reviews to small and mid-sized businesses, aside from an online shopping destination. It operates on a cost-per-order model.
In May 2007, Bazaarvoice announced that it had reached profitability and has over 600 customers including Best Buy, Costco, Dell, Macy’s, Sephora, Overstock, and P&G, among others. It has won several awards, including the the Internet Retailer 500’s #1 for Customer Ratings and Reviews. Bazaarvoice has served over 50 billion user-generated product Answers, Stories, and Ratings & Reviews and now serves nearly 4 billion pieces of user-generated content each month.
Since customers are influenced by others’ reviews of a particular product or site, companies such as Bazaarvoice are flourishing. It is widely understood that opinions of other customers are far more valuable to the sale of a product than what ads or marketing people say. Bazaarvoice’s rapid growth is only one more example how digital word of mouth is one of the most influential forms of advertising, with Nielsen Online saying that over 80% of consumers head to the Web to read customer reviews before shopping online or in stores.
The company has its headquarters in Austin, Texas, with offices in London, Paris, and Singapore. It has grown to 400 employees and operates in 25 languages. Over the next few months, Bazaarvoice will roll out a new feature to link reviewers’ recommendations and reviews to their Facebook profiles, making it easy for them to share their thoughts with their friends and family. This supports the claim in a recent report by Manage Smarter that “83% of online shoppers are interested in sharing information about their purchases with people they know.” According to ZenithOptimedia, “recommendations from family and friends trump all other consumer touchpoints when it comes to influencing purchases.”
The company has good growth, and also strong acquisition prospects. One of the best acquirers for this would be Oracle’s Retek division.
This segment is a part in the series : Deal Radar 2009