The average number of reviews per item, often referred to as SKU (stock keeping unit), is an important key performance indicator (KPI) for e-commerce businesses. It provides an understanding of how often customers are reviewing products in the online store.
This metric is critical because it shows the level of engagement and interaction customers have with products and serves as a proxy for product popularity and customer satisfaction.
Key Takeaways
- Definition: Average number of reviews per item (SKU) provides insight into the average number of reviews a single product or SKU receives in an online store.
- Calculation: This metric is calculated by dividing the total number of reviews by the total number of products.
- Strategic Importance: Provides insight into product popularity, customer satisfaction, areas for improvement, and influences purchase decisions and trust among potential buyers.
- Optimization Strategies: Increasing the number of reviews can be achieved through strategies such as post-purchase emails, incentivizing reviews, integrating review platforms, and actively managing and responding to reviews.
- Limitations: While valuable, this metric does not reflect review quality, can be influenced by promotional activities, does not differentiate between verified and non-verified reviews, does not provide insight into timeliness, can be subject to aggressive review solicitation strategies, does not indicate sales volume, can overlook other feedback channels if overemphasized, and lacks context without additional metrics.
- Complementary metrics: This KPI should be evaluated alongside metrics such as Net Promoter Score (NPS), return rate, customer feedback score, and review response rate for a comprehensive view of ecommerce performance.
Why does Average Number of Reviews per Item (SKU) matter for your business?
The importance of this KPI for an ecommerce business is multifold:
- Consumer Trust: Reviews often serve as a trust factor for potential buyers. A product with numerous reviews is likely to be more trustworthy in the eyes of a customer than a product with few or no reviews.
- Purchase Decision: The more reviews an item has, the more information is available for a potential customer to make an informed purchase decision. It provides insights into product quality, usability, and overall satisfaction.
- Product Feedback: Reviews offer businesses invaluable feedback about their products. If a SKU has many reviews, it indicates high engagement, while few reviews might suggest the need for product improvement or better marketing.
- SEO Benefits: User-generated content, like reviews, can improve search engine rankings, driving more organic traffic to the product pages.
- Brand Reputation: Actively encouraging and managing product reviews can boost a brand’s reputation, as it shows transparency and a willingness to engage with customers.
How to calculate Average Number of Reviews per Item (SKU) ?
Explanation of the parts of the formula:
- Total number of Reviews represents the cumulative count of all reviews provided by customers across all products in the store. These reviews can be both positive and negative, and they offer insights into customer feedback and product satisfaction.
- Total number of products refers to the total count of all individual SKUs or items listed in the online store. This includes every variant of a product, whether it has reviews or not.
- The ratio derived from the formula gives the average number of reviews that a single product or SKU has. This average provides an understanding of the general engagement of customers with products and their propensity to leave reviews.
In essence, the Average Number of Reviews per Item (SKU) is a measure of how frequently customers are reviewing products in the online store. A higher average indicates that customers are actively engaging and providing feedback, while a lower average might suggest the need for strategies to encourage more reviews.
Example Scenario
Imagine that for a particular online store:
- The store has a total of 500 different products or SKUs.
- Collectively, these products have received a total of 2,500 reviews from customers.
Insert the numbers from the example scenario into the formula:
- Average Number of Reviews per Item (SKU) = 2,500 / 500
- Average Number of Reviews per Item (SKU) = 5
This means that on average, each product or SKU in the store has 5 reviews.
Tips and recommendations for increasing Average Number of Reviews per Item (SKU)
To increase the average number of reviews per item, consider the following strategies:
Encourage post-purchase reviews
Encouraging customers to leave post-purchase reviews can significantly increase the average number of reviews per SKU. This can be done by sending follow-up emails or messages after the customer receives their product, asking them to share their experience and feedback. To further motivate them, you could offer incentives such as discount codes or loyalty points for their next purchase. This method not only increases the number of reviews, but also improves customer engagement and loyalty.
Provide review platforms
By integrating popular review platforms or plugins into your ecommerce site, you make the process of leaving reviews easier and more accessible for your customers. The easier it is for a customer to leave a review, the more likely they are to do so. Providing a platform also allows customers to read other reviews, which may inspire them to share their own experiences. This strategy not only helps increase the number of reviews, but also helps build a more transparent and customer-centric brand image.
Manage negative reviews
Dealing with negative reviews quickly and efficiently can greatly encourage more customers to leave reviews. If a customer has a less-than-perfect experience, addressing their concerns quickly and effectively can turn a negative situation into a positive one. It can also demonstrate that your company values customer feedback and is committed to improving its products and services. When other customers see this level of care and attention, they may be more inclined to share their own experiences, both positive and negative.
Prominently display reviews
Displaying top reviews on product pages or even on the home page of your ecommerce site can encourage other customers to leave their own reviews. When customers see that their opinions are valued and taken into consideration, they may feel more encouraged to share their feedback. This approach not only increases the visibility of reviews, but also creates a sense of community around your brand, making customers feel more involved and valued.
Run review campaigns
Running campaigns or contests that incentivize customers to leave reviews can increase the average number of reviews per SKU in a relatively short period of time. By offering the chance to win prizes or receive discounts, you can motivate customers to actively participate in reviewing products. This tactic can create excitement around your brand while fostering a culture of feedback and communication. It’s a win-win for both your business and your customers, increasing engagement while providing valuable insights about your products.
Examples of use
Review-Based Marketing
- Scenario: An online fashion store notices that certain products have significantly higher reviews than others.
- Use Case Application: The store can use these high-reviewed products in their marketing campaigns, showcasing them as “top-rated” or “customer favorites.” This not only promotes the products but also encourages more reviews from new buyers.
Leveraging User-Generated Content
- Scenario: A DTC electronics brand finds that products with high reviews often have user-uploaded images showcasing the product in use.
- Use Case Application: The brand can use this user-generated content in its advertising campaigns, providing real-life examples of product usage and encouraging more customers to leave reviews with images.
Product Improvements
- Scenario: A DTC kitchenware brand identifies that some products have lower reviews due to specific issues raised by customers.
- Use Case Application: The brand can address these concerns in the product’s next iteration, and then highlight the improvements in marketing campaigns, thanking customers for their invaluable feedback.
Customer Engagement
- Scenario: A DTC shoe brand finds that engaging with reviews, both positive and negative, leads to an increase in overall reviews for the product.
- Use Case Application: The brand continues to actively engage with reviewers, answering questions, addressing concerns, and thanking customers for positive feedback. This active engagement fosters community and encourages more reviews.
Inventory Decisions
- Scenario: An online bookstore identifies that books with higher reviews tend to sell out faster.
- Use Case Application: Using this insight, the store can stock more copies of highly reviewed books, ensuring they meet demand and maximize sales.
Average Number of Reviews per Item (SKU) SMART goal example
Specific – Increase the average number of reviews per SKU by 30%.
Measurable – Compare the current average number of reviews per SKU to the average number after implementing strategies to encourage reviews.
Achievable – Yes, by implementing tactics such as post-purchase review prompts, incentivizing reviews, highlighting top reviews, and actively engaging with reviewers.
Relevant – Yes. This goal aligns with the goal of increasing product trust, customer retention, and overall sales.
Timed – Within four months of initiating review-boosting strategies.
Limitations of using Average Number of Reviews per Item (SKU)
While the Average Number of Reviews per Item (SKU) is a valuable metric for understanding product engagement and feedback in an ecommerce setting, it has its limitations when used for comprehensive business analysis:
- Doesn’t Reflect Review Quality: The average number of reviews provides a quantitative measure but doesn’t capture the quality or sentiment of the reviews. A product with many reviews might still have negative feedback.
- Can Be Influenced by Promotional Activities: Certain products might have more reviews because of recent promotional activities, discounts, or marketing pushes. This might not reflect the product’s long-term appeal or popularity.
- Doesn’t Differentiate Between Verified and Non-Verified Reviews: Not all reviews are from verified purchasers. The metric doesn’t distinguish between reviews from genuine buyers and potential spam or unverified reviews.
- No Insight into Recency: Older products might naturally have more reviews due to their longer presence in the market. This metric doesn’t factor in the recency of reviews, which can be crucial for trending products.
- Subject to Review Solicitation Strategies: Some products might have more reviews because of aggressive review solicitation strategies, not necessarily because they’re better or more popular.
- Not Indicative of Sales Volume: A product with many reviews doesn’t necessarily mean it has high sales. Some products might just have a very vocal user base.
- Overemphasis Can Lead to Neglecting Other Feedback Channels: While focusing on increasing product reviews, businesses might overlook other feedback channels like direct customer feedback, surveys, or social media feedback.
- Lacks Context Without Additional Metrics: The average number of reviews in isolation doesn’t offer a full picture. For instance, a product with fewer reviews but higher ratings might be more favorable than one with more reviews but mixed feedback.
In summary, while the average number of reviews per SKU is an important metric in the repertoire of ecommerce KPIs, it should be paired with other metrics and qualitative insights to gain a holistic understanding of product performance and customer feedback. It shouldn’t be the only metric used to drive product or marketing strategies.
KPIs and metrics relevant to Average Number of Reviews per Item (SKU)
- Net Promoter Score (NPS): Measures customer satisfaction and loyalty. A high NPS alongside high reviews indicates strong customer satisfaction.
- Return Rate: The percentage of sold items that customers return. A high return rate with low reviews can highlight product issues.
- Customer Feedback Score: Aggregates feedback from various channels to provide an overall score for a product or service.
- Review Response Rate: The rate at which businesses respond to reviews, which can influence customer trust and future reviews.
Final thoughts
The average number of reviews per SKU is a critical metric for ecommerce businesses, providing insight into product popularity, customer engagement, and overall satisfaction. Encouraging and actively managing reviews can enhance a brand’s reputation, drive sales, and provide valuable feedback for continuous improvement.
Average Number of Reviews per Item (SKU) FAQ
What is the Average Number of Reviews per Item (SKU)?
It refers to the mean number of reviews that a single product or SKU receives in an online store.
Why should I track this metric?
Tracking this KPI can provide insights into product popularity, customer satisfaction, and areas for improvement. It also influences purchase decisions and trust among potential buyers.
How can I increase the number of reviews for a product?
Strategies like post-purchase emails, offering incentives for reviews, integrating review platforms, and actively managing and responding to reviews can help increase this number.
Is a product with more reviews always better?
Not necessarily. While a high number of reviews can indicate popularity, it’s essential to consider the quality and content of the reviews.
How do reviews impact SEO?
User-generated content, like reviews, can enhance search engine rankings, driving more organic traffic to product pages and improving overall site visibility.