I’ve already shared some of the benefits of incorporating discussion forums into your ecommerce site. Now let’s delve deeper into the concept of user-generated product review content.

Intuitively it makes sense that your customers would convert better if they could read credible product ratings and reviews from your other customers before buying. Indeed, studies back this up (stats excerpted from bazaarvoice.com):

RoperASW reports the value of word of mouth as the best source of information on products has exploded from 67% in 1977 to 93% in 2001.

BizRate found that 59% of their users considered customer reviews to be more valuable than expert reviews.

Marketing Experiments Journal tested product conversion with and without product ratings by customers. Conversion nearly doubled, going from .44% to 1.04% after the same product displayed its five-star rating.

The Shop.org State of Retailing Online study, conducted by Forrester Research, found only 26% of the 137 top retailers surveyed offered customer ratings and reviews, but 96% of them ranked customer ratings and reviews as an effective or very effective tactic at driving conversion.

So now the question becomes, what’s the best way to implement customer reviews? There are hosted third-party services like BazaarVoice and PowerReviews that offer a managed solution and host the content and technology for you. Or you can host and manage the ratings and review technology and content in-house. Both approaches have their merits. Certainly if you have limited IT resources, a hosted solution would appeal.

But you should be aware of the SEO impact of a hosted reviews solution. The review content gets inserted into your web pages using JavaScript, and as such, that content is invisible to the spiders. So if you expecting that content to augment your existing product page content with additional keyword-rich user-generated content, you’re going to be disappointed. You’d have to do some pretty clever workarounds, like scraping the product content and inserting the review text into your HTML, if you want to realize fully the SEO benefit of this product review content.

Publicly viewable customer feedback can take other forms besides the standard ratings and reviews. For instance, you could offer a wiki, like some other retail sites have done. Just imagine having buyer’s guides written and maintained by your visitors, like ShopWiki has. If you can pull it off, I think that would be pretty cool.

Another non-standard approach to incorporating user-generated content is to get customers to tag your products. I’ve already made a case for tagging as a SEO tactic for blogs. And I’ve discussed auto-tagging.

But what about social tagging (user tagging), where you get your visitors to do the work for you? Frankly, I’m dubious. My preference here is to accept tags only from employees and/or a small trusted group of customers. A thousand monkeys randomly pecking away at a thousand typewriters for a thousand years may eventually output Shakespeare. But in the meantime, it’d be a whole lot of useless noise. If you’ve got the time to weed out the useless noise from the tags contributed by your visitors, then social tagging could be a valuable addition to your ecommerce site.

Amazon.com rolled out social tagging. How’s it working for them? Well, according to one contact I have at Amazon.com, the benefits of these user-contributed tags to create a “folksonomy” (i.e. alternative categorization and navigation) has been limited. That’s because the tags added to products are often self-serving and relevant only to the person applying the tag (e.g. “birthday gift for betty”).

Finally, I want to circle back to the topic of discussion forums. If you have forums on your site, consider more tightly integrating them with your product catalog. For example, link directly from your product page to the relevant section/page of your forums. And highlight the most relevant posts to help influence the buying decision. One of my favorite ecommerce sites, Woot.com, does both of these things to good effect.