the-wom-factor-chalkboard

The WOM Factor – Why ALL eBay Sellers are Not Equal

the-wom-factor-chalkboard

The Word of Mouth Factor

I’ve answered too many eBay’er questions over the years, its probably why I have such a tainted view on specifically eBay buyers, my personal ‘resounding’ conclusion is that they’re scared and really scared at that, almost to the point of paranoia.

In the next few minutes, we’ll be looking at the different types of buyers and a new system of gauging sellers, not feedback, but a derivative of feedback, which gives a clearer overall picture of the seller in proportion to their customers views and perception of the business. I’m calling this the WOM factor.

Multi-Channel

For multi-channel businesses, they’ll know that there are three different breads of customer and they vary enormously. These are:

#1 The Website Buyer

Website customers are the most relaxed of them all, you’ve woo’ed them with your marketing and reassured them with your subliminal security and reassurance factors. They’ll be happy with a couple of days shipping time and normal have already answered their questions before even buying from you.

#2 The Amazon Buyer

Its extremely rare to receive a question from a Amazon buyer and if you do its 99.9999999999999999999999999% of the time related to shipping or a broken item. Besides that, they’re quiet as a mouse.

#3 The Psycho eBay Buyer

I feel sorry most of all not for the sellers on eBay, but for the buyers. Mentally unhinged, these buyers are the stuff of customer services nightmares, they’re scatty and nuts, they’re lunatics and time wasters. But most of all they’re just scared.

They’re scared of being ripped off, they’re scared you’re going to steal their money and emigrate to Nigeria and then sell all their personal details to a chap in a mud hut who will spawn 10 versions of themselves as the victim.

Harsh, but that’s the kind of metal thought patterns that go through these paranoid buyers heads

Word of Mouth

This isn’t a new concept, infact its a very well documented concept, in short it simply says, that for a good experience a customer will tell two people and for a negative experience, they’ll tell 10 people.

Loss & Reward

This also sits well with the experiences of reward and loss. If I take your pet cat called “puddles” away from you right now, never to be given back, the sense of loss you will feel will be immense; However if I give you back a kitten called “Spot”, you’ll learn to love the little ball of fluff, but it will never replace puddles, who’s loss carries a far far greater sense of loss, than any gain can give.

Also word of mouth is extremely strong, companies are scared of the extremes that can occur with terms being coined such as ‘Brand Terrorists’, those customers that have been so pissed off by a business or brand, there is no stopping them ram-raiding the company or brand at any opportunity.

Inversely, when tribes are formed (Seth Godin’s input here)  “Brand Sponsors” are created, those people that are just nuts for a product or service, the most immediate example I can think of are Apple fans. I’m an Apple product fan, but I’m to the level of what I would call excessive, that some of these Apple nut-mini-Steve-Jobs are.

Using “Word of Mouth” to Measure eBay Seller’s

Its not hard to see why either, if we use the rule of that one positive comment will create 2 positive word of mouth reviews and a negative or neutral comment -10 word of mouth reviews, then its not hard to do the maths on a random selection of sellers and understand that eBay’s growth is actually tainted by its underlying feedback system and also that all sellers are not actually equal.

The DATA – Random Sellers Feedback

These were taken completely at random, I picked four categories and picked a couple of sellers for each category from the top of the list (yes I’m aware this is weighted by the best match algorithm) and included their feedback for the past 12 months and neutrals are counted as negatives.

I have not included revised feedback, I could not decide whether these were positive or negative events, so have elected to ignore them completely. If I was forced to add them, I would class them as a negative event, as it was not a “perfect” transaction, perhaps I should look at this again in a few weeks and maybe I’ll attribute a +3 or +4 to these, but for now, I’m not sure.

PS: What do you think? Post in the comments below!

Random eBay Sellers Feedback Scores

IDPositiveNegative+Points-PointsWOM Factor
jpe_enterprises1892378205.29
loco_gadgets3781756101.32
benthamltd807911008161582100806.24
argos25921761815184346181011.92
xia09072956171122706.24
glamorousoutlet2258553045170530011.73
bench_outlet402745308054853006.58
bessy030229601259201202.03
online4babyltd5587061411174061405.49
babzeeonline195492173909821705.55
tennis-deals-200842212484422402.84
poshtotz-store533734106743403.19
little-devils-direct7731015461006.47
flyingplaneman47656895306807.14
kmsdirectshops140691982813819807.04
aqua_spot89471788703.91
Totals5124339443102486694430

Understanding the Data

I’m quickly adding that several of these sellers actually had either 100% or 99.9% feedback scores, this is only one factor that I am indicating in this article. While the vast majority of these sellers are above 99.0% feedback, Argos stands out for two reasons:

  1. They have a feedback score of 98.7, the lowest of the group
  2. They have the worst ratio 11.92% of WOMF

The second, is on face value an OK seller, they have a score of 99.1% currently, which is good enough and almost all retail stores in the physical world, would probably never be able to achieve this.

Glamorousoutlet are turning over a decent amount of items, with 22,585 feedback in the last year, this is probably around +32,000 orders, however they have incurred 530 negatives, or using the WOM Factor a negative score of 5300, giving them a WOM of 11.73 which when you look at Argos with their 98.4% feedback, is actually worse in proportion!

How to Calculate the WOM Factor

Calculating this is easy, you take your positive feedback for a set period of time and times it by 2, then you take the negative and neutral comments and times them by 10. Then divide the negatives by the positives and times by 100 to gain a more friendly number. In short the lower the better.

The-WOM-Factor

How to Calculate "The WOM Factor"

 

What Customers Really Think

Being able to gauge what your customers truly think of your business is stuff of marketeers wet-dreams. This new factor, I’m coining as the “WOM Factor” can be one tool in your arsenal to accurately gauge what your customers actually think of you.

To give you a measurable and a new dimension on what is just raw numbers. The WOM Factor gives you an indication of what is the actual effects and general response of your business on the outside world.

I wonder what the WOM Factor for Microsoft is?
I wonder what the WOM Factor of Apple is?
I wonder what the WOM Factor for the entire eco-system of eBay is?

Whats Your WOM Factor?

This leads to the pivotal question, whats your WOM Factor?

21 replies
  1. proetus
    proetus says:

    #3 The Psycho eBay Buyer
    As mind baffling time consuming and frustrating as these customers are I have all to often actually got a buzz from dealing with the issues thankfully in most cases to a positive conclusion and in some cases a smile.

    I have actually had an apology from a past customer for drink eBaying lol

    Reply
  2. Celtic Elvis
    Celtic Elvis says:

    My WOM factor is 0.76.

    My actual numbers are…. 25 neuts, 1 neg and 17171 pos.

    Think I’ve calculated it correctly

    Happy Days!

    Reply
  3. bamfordtrading
    bamfordtrading says:

    Hard to avoid calculating our own since customer service in the eBay world is so taxing (as you rightly point out). 1.26 according to excel. Matt, does this mean we are being too good and losing money because of that? After having 100% for 5 years and losing it we are less precious as it was an expensive hobby.

    John

    Reply
    • Matthew Ogborne
      Matthew Ogborne says:

      Hi John, All,

      I’ve been thinking about your comment for most of the day, eBay customers are very taxing, but if one does not strive for 100%, then is there any point in continuing?

      If 100% customer satisfaction isn’t the target, what else could it be? When is poor or sub standard customer service acceptable, when is “being too good” a truly negative thing? The only answer I can come up with is never.

      Yes ones business will be limited by the amount of resource its able to allocate to CS, but that should not mean one should not aim for pinnacle 100%, hitting 99.9% (in your case by a sheer fraction) and as you’ve seen by the WOM factor of 1.26, the amount of negative press your business is creating is absolutely minimal, especially when you factor in the volume of sales you are churning.

      In many ways, you’ve made me question my original WOM factor equation, volume should be a part of this, 1.26 isn’t accurate enough, it needs to take into account a multiplier or division for velocity of sales, because a company that is clearing +4000 sales per month, with such a low WOM factor, should be graded accordingly, especially when you look at loco_gadgets with 378 positives and one negative, we’re out by a factor of 10 here.

      Quite frankly, its amazing that you have managed to keep it at +99% for so long, for what must be over 300,000 transactions on eBay.

      Matt
      PS: The shop looks much better now, it needed the toning down on the grey so the menu was more readable.

      Reply
  4. D Furness
    D Furness says:

    I agree with Pat on that point, it seems to be the compromise you make with Amazon customers, they are easier to deal with but as they dont anticipate any problems with their order there not as picky and don’t seem to feel the need to leave feedback (il be honest, i used to do this before i started working with Amazon seller accounts) Whereas it is like eBay customers are waiting for something to go wrong and are waiting to pounce on the slightest thing.

    If only they had the mantra…’if you have nothing nice to say…’ ha ha

    Dave

    Reply
    • Matthew Ogborne
      Matthew Ogborne says:

      Howdy Dave,

      Yes, that’s exactly the same as me, only seeing the side of the seller, have I intentionally made a point of leaving feedback for Amazon Market Place orders.

      The customer types are really different, I’d like to know the true demographics of both buyer types and see how the differ. I would suspect salary and location would be two key factors, probably age too.

      I’d also love to know what Amazon’s own feedback rating would be like too. Maybe they have avoided this because of the fear of what the WOM factor might do when comparing to eBay’s public feedback system for merchants?

      Matt

      Reply
    • Patrick Sherlock
      Patrick Sherlock says:

      Dave,
      I’ve made that point a few times when talking with eBay folks – it’s like they are conditioning the buyer to be looking for something – anything – to fault about a transaction. It feels like …”Hey, this is an eBay transaction, surely there must be something to de-rate the seller on, are you really, really sure everything was OK ….was the packaging colour OK ?, were the stamps all correctly aligned with no spittle over-flow ? Are you really sure it was OK ?. Ah….you found something you didn’t like….good….plug in a 3 out of 5 here then. That’s the spirit. Can’t have these sellers thinking they are great”

      Reply
  5. Patrick Sherlock
    Patrick Sherlock says:

    Matt,
    Very interesting metric …and like Dave we can so relate to those ‘buyer types’. Funny but oh so accurate.

    Just recently I began to track the ‘contact to orders’ ratio for our Amazon account- now that they provide these numbers in the performance metrics dash where they tell you how many ‘communications’ you received and how quickly you responded – and it bears out what you say in that Amazon buyers are extremely quiet – they expect a smooth transaction and when it happens they don’t feel the need to do or say anything about it. The downside is that they don’t leave positive feedback either !! So whilst our Amazon rating is 4.8 ( which is 96% positive for all those who left feedback )….the performance dashboard tells me that negs as a % of orders is only 0.27% ….so 99.7% is the measure I like to calculate ;-)

    Our WOM – four accounts 5.78, 2.43, 2.46, 1.55

    Pat Sherlock
    Luzern Solutions

    Reply
    • Matthew Ogborne
      Matthew Ogborne says:

      Howdy Pat,

      Hope all is well?

      I am actually working on an article outlining and detailing perfect Customer Relationship Management system (CRM), as no tool yet has actually got anywhere close to what it should be like for merchants, especially those with multiple accounts.

      Its probably a week or so away from being published, although I was contacted yesterday evening as a company I queried, wants the “blue prints” to it, so it may never actually hit this blog and go straight to production.

      I’m so thankful I do not deal with Joe Public customers directly and have a lot of respect for those on the front lines, it can be quite trying at times.

      Those WOM scores, like Daves are again pretty good, I ran this concept on the accounts I manage and two came out above average (so need some focus work to be done there), the others were almost all below 5 and the lowest one was 1.71.

      So you’re leading so far!

      Matt

      Reply
  6. D Furness
    D Furness says:

    Another great article Matt, You are spot on with your breakdown of the different types of customers, as a multi channel retailer we know exactly what you are talking about, with regards to the ‘paranoid psycho’s’ that scour eBay.

    My only comment, which is really minor, but because deep down i like simplicity, i tried working out our WOM factor by looking at your diagram above and was a bit shocked when the number came out so high, then i re-read the paragraph above and realised I was dividing +ve’s by -ve’s instead of Vice-versa.

    So since you asked, our WOM Factor is 5.02 :)

    Reply

Trackbacks & Pingbacks

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  3. The WOM Factor – Why ALL #eBay Sellers are Not Equal – http://t.co/NANzL5hn

  4. […] reviewing than blissfully satisfied ones.  (If only we could apply Matthew Ogbourne’s Ebay reputation analysis to TA’s reviews!).  However, the world is a big place and as with Fred Wilson’s […]

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