Case Study: How Not-for-Profit Media & Expert Reviews Need to Adapt

Photo from ConsumerReports.org

Photo from ConsumerReports.org

XifrThis is a guest post from Noah Xifr, a marketing consultant and director of Moon Marketing Works.

Consumer Reports, the champion of consumer safety, is facing three escalating challenges. The report released at CES 2013 this January, Buy it, Try it, Rate it by Weber Shandwick and KRC Research, inspired me to assess their position.

First, the magazine industry is undergoing radical evolution. Second, non-profit service organizations are under competitive pressure in the social and digital space. Thirdly, consumers are relying on expert product reviews less, Consumer Reports’ core offering. Let’s explore the unique challenges and potential advantages Consumer Reports faces in the SoLoMo (Social Local Mobile) space in 2013.

The go-to resource for expert product testing and reviews, Consumer Reports, was a leading print magazine. When the Internet shredded the print standard, media consumption behavior shifted and The New York Times lost readers to online news media. The Times strategically restructured to develop a paywall subscription model to monetize their online content.

The Rise of Subscription Paywalls

 

The subscription paywall became the new standard along with delivered advertising units across the US and with varying degree abroad. Competitive free online media sources, like The Huffington Post, remain successful relying on display advertising. The Guardian announced they will forego a browser paywall for now, in favor of increasing engagement and readership around their content. Paywalls may stunt the long-term growth of advertising revenue streams.

Consumer Reports had a loyal print readership, justifying their transition to an online subscription paywall model. This paywall risks cultivating future readership that will not have the prior exposure to their expert product reviews. As a result, Consumer Reports will increasingly wane in consideration. The non-profit will get fewer webpage visits, struggle with subscription retention, recruitment, and decreased online donations, all essential to offset operating expenses.

Online & Social Challenges of Non-Profits

Non-profits in the online and social space have specific challenges. Profit-based businesses have more funds to allocate and to redirect efforts. An efficient digital implementation requires responsive planning, people, and technology. A non-profit with limited funds is under pressure to prove a quick return on their investment.

Operating expenses of non-profits must be offset by earned revenue, contributed donations and grants. A non-profit may not have sufficient funds to prioritize building or maintaining their online presence. This disruption can damage community trust and erode networking strategies. With tight budget limitations, management may hesitate to test and adopt newer online, mobile and social media developments and lose the first-movers competitive advantage.

How Consumer Reports Has Adapted

The 2011 Annual Report on ConsumerReports.org reveals that they are in the process of transformative work, championing a wealth of content promoting consumer safety. Highlights include ways consumers can share their experiences by voting for the Worst Companies in America on Consumerist.com. New digital services include a partnerships with website BillShrink, and a mobile version of the print subscription.

Consumer Reports now reaches the public mainly through their .org website, however their digital and social media strategy is not apparent in this annual report. This indicates that the organization prioritizes an online content strategy over networking, marketing, investigating emerging functionality and online monetization models. As a larger non-profit organization with a primarily online entry point for their products and services, Consumer Reports is missing several opportunities in the SoLoMo space.

Consumers Prefer User-Generated Reviews

Consumer review behavior patterns are shifting radically away from relying on traditional technological journalists. “Buy it, Try it, Rate it” reveals that consumers are vigilant in the quest to inform their purchase decisions. Consumers on average completed over two activities on and offline to gather product opinions, and referenced eleven reviews before making their final purchasing decisions.

Reviews have an increasing importance in driving sales and influencing purchases. Trust in reviews spark consumer confidence, satisfaction, and repeat purchases. The increased volume of consumer product reviews enhances competition for Consumer Reports’ page views. Electronics consumers prefer their own user-generated reviews generally 3-to-1 over expert reviews.

Today’s consumer sees Consumer Reports reviews in a greater context with pros and cons. We trust in the authenticity of expert reviews, but we do not find expert reviews as relevant anymore. A lab test of a product may not reveal all the real-life use of features, or be written in a manner that is relatable, or weigh the negative and positive aspects of the product.

While Consumer Reports retains a high level of trust, the top 2 trusted websites for reviews overall are Best Buy and Amazon. These trusted 2 review leaders are direct product vendors that rely on user-generated reviews. Consumer Reports, we still trust you, but we no longer love you. You are losing ground.

SoLoMo Strategy Necessary to Succeed

Consumer Reports needs to reassess their online and SoLoMo strategy, pronto. Consumer Reports developed a Consumerist Tipster app for iPhone and Android, which creates an avenue for users to share and broadcast content, but it does not encourage conversations. The volume of expert review content is missing in app form, as media consumption on mobile expands. Subscriptions still focus on print hard copy, while Consumer Reports Mobile “Ratings on the go” is rolled into the subscription package and is not prominently positioned on their website. Localized ratings with social media interactivity would be more relevant and engage consumers.

What should Consumer Reports do strategically? Should they stick to their core offering of expert reviews? Deliver expert reviews yet monetize another area? Should they address shifts in consumer behavior and consider integrating user-generated reviews? We need to consider how organizations relate to their end-users and their best utilization of media. Please share your ideas and insight in the comments below.

Find Xifr on TwitterFacebook LinkedInFoursquare and Pinterest. He also can be reached at (646) 450-9278 or MoonMarketingWorks@gmail.com.



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