Case:

BizRate.com

Presented By:
 Contents
• Introduction: Brief History
• Binary Compass Enterprise
• BizRate Rating system
• Research division
• Red- October
• Pushing E-commerce
• A fork in the road
• What next?
 BizRate.com
o An E-commerce site.
o Facilitates buying or purchasing of
commodities by various brands.
o Also a marketing research firm.
o Provides Market analysis to both merchants as
well as customers
 Sources of Revenue
• BizRate.com has two distinct sources of
revenue generation:
 Market Research
 & E-commerce

Big Question in front of BizRate now

 Can these two different streams coexists
successfully??
 Binary Compass Enterprise(BCE)
• Setup by Farhad Mohit
• Was developed in order to facilitate buyer in
trusting any Internet vendor.
• He believed that instead of relying on the
experts rating for a particular commerce site,
its better to rely on consumers who had a
direct experience of that site.
• Collection of online polls at the time of
purchase only.
 BIZRATE RATING SYSTEM
BizRate was known as a research firm that
collected customer feedback data.

1. made that research available to

consumers in the form of merchant ratings
2. sold that research back to vendors in a
more detailed form.
•Typically, about 8% to 10% of consumers who were
presented with the BizRate request responded to
the survey.

• Of course, in order to be in a position to collect

this data, BizRate needed to convince merchants to
give it permission to install the survey on their
websites.

• We were trying to sell vendors on this idea of a

consumer ‘hub,’ a place that consumers could visit
anytime they wanted information about who they
could trust on the Web.
•The problem with this is that bizrate couldn’t act as a
hub until they had enough vendors signed up.

•In their initial sales pitch to merchants, the founders

positioned themselves as offering the one thing that
many online retailing start-ups desperately needed:
TRUST.

•In short, BizRate offered start-ups an opportunity to

gain instant credibility, via an objective, third-party
source.
 CHANGE
• Bizrate converted data into merchant ratings
that range from zero to five star in each of the
10 categories
BIZRATE SORTING SYSTEM
 BENEFITS OF BIZRATE
• Buyers could use rating for comparison
shopping purpose.
• Its service was timely.
• It was more comprehensive then being
competitive .It not only offered price
comparison but also allowed shoppers to sort
information according to particular criteria.
 MAJOR CHANGES
• IT offered “My Bizrate” for users who were willing to
personalize the site. It acquired eboodle.com, a
shopping toolbar that resided on user’s computers.
• For vendors who were still not joining the bizrate
system, it established a panel of one lakh regular
online shoppers and collected feedback from them
for merchants outside the Bizrate circle of partners .
• It had the most complete customer database
which was growing at 10% a month.
• It consisted of 6 million online buyers with all
the demographics and email address which
helped them to know which type of shoppers
had which type of shopping criterias.
 BizRate’s Focal Point:

• No advertising on website
• No charge for merchant

participation
WHERE DID THE REVENUE COME
WHERE DID THE REVENUE
FROM???? WHERE DID THE REVENUE
COME FROMCOME FROM???
 RESEARCH DIVISION
“Selling detailed reports to merchants”
called:

• CUSTOMER ANALYSIS REPORT (CAR)

• CONSUMER ONLINE REPORT (COR)
• CUSTOM CUTS
 CUSTOMER ANALYSIS REPORT
1. Performance Ratings across key service dimensions
against competitors.
2. Demographic and Psychographic profile of
merchant- customer base.

-First time and Repeat buyers

-Most popular products with what
category of customers
-Merchant’s buyer mix Vs Competitor’s
 Contd…..

3. Online and Offline referral Channels

4. Onsite tools and features attracting

customers
 Contd…

5. Merchant’s Services satisfying Customers

-Delivery Time
-Order tracking information systems
-Best customer support medium

6. Revisiting of Buyers
 CONSUMER ONLINE REPORT

• Made on quarterly basis

• Offered category level analysis

 CUSTOM CUTS

• Instant feedback to Merchants

• Feedback from non-buyers

• Concept-testing
 REPORT SIGNIFICANCE

• Provided access to inaccessible information

• Building customer relationships

• Benchmarking
 RED OCTOBER ( OCTOBER 1999 )

The company unveiled a new website that reflected a shift in Bizrate’s business model.

There were changes that added to Bizrate’s consumer value proposition.

 Bizrate unveiled a new product search tool that allowed the customers not only to shop
by a specific merchant but also by a specific product. The shoppers could perform all kind
of comparisons like comparing prices of a particular product over different vendors.
 Bizrate began providing direct links from its rating charts to the participating
retailers.
A Bizrate visitor ,say, comparing merchants in the shoe category ,could now inspect the
Bizrate rating , select a merchant and then click on the merchant’s name and he was
directly taken to the retailer’s website selling the selected merchant’s shoes.

If the click resulted in a purchase, then Bizrate collected a commission ranging from 1%-
20%. It also provided rebate to the customers on purchasing goods from Bizrate
website.
These changes added consumer value and protected the integrity of its ratings. Bizrate
was different from Amazon.

Bizrate was consumer- centric and retailer neutral , which Amazon will never be.

 Bizrate started the merchandising pods. It invited merchants with ratings of 4 stars or
higher to display promotional banners in a predefined space along the side of the
ratings.
It did not charge the merchant for the banners but it collected a certain % of cut from
the sales generated from the click throughs. They very well maintained the thin line
between merchandising pods and advertising.

Growth of Bizrate’s e-commerce division

 By April 2000 Bizrate had become number 2 internet shopping portal beating out
bigger players like Yahoo! Shopping and MSN shopping and that too by spending around
just $10 million on marketing since its inception.

 The number of merchants joining Bizrate survey program had increased from 1700
(before October) to 4000 by the end of April 2000.

 Bizrate learned that about half of all the visitors to its website ended up purchasing
something from the merchant. The conversion rate of 8.2% was higher than the industry
average of 1.8 %.
The e-commerce division of Bizrate picked up quickly and was very fruitful. The
Success of e-commerce side of the business meant that Bizrate was likely to hit the
$10million in revenue for the year 2000 putting the company on the track for a possible
IPO in the following year.

The changes in the website and Bizrate’s entry into the e-commerce field created
excitement and generated an additional revenue of $ 50 million .
Pushing ecommerce
•An e-commerce stint by Bizrate.
•Referral fees collected for ‘clicks’.
•Benefits attained by merchants through
email marketing.
•E-commerce generated revenue.
•Bids for place in search list.
A fork in the road
•Worry of venture capitalists.
•Market research- a tiresome job.
•E-commerce or Research.
•Mohit’s worry about the future of
Bizrate.
•The problem of losing loyalcustomers.
• The need to fight against big players.
• Fear of losing the name earned through hard
work.
• Davis’ opinion to take Bizrate to next level
 What Next?
• Coexistence of Research Division and E-
commerce

• Existence of E-commerce only

 E commerce
• E commerce was bubbling and Bizrate could
top the game with its present customer
volume.
• ‘Swift’ Revenue
• Turnaround from easily un-scalable Research
revenued
 Ecommerce Vs Research division
• AC-Nielsen’s place
• E commerce initiatives, if too strongly pushed
over customers, shall not prove worthy.
• End up losing loyal customers
• Customer’s believe in rating because, it is
customer’s rating.
• E-commerce portal would make people add
another ‘Amazon.com’
 Coexistence- the solution
• Rating system- A catalyst for Ecommerce
• Improves reliability over the system
 +ve’s
• Guide customer to ‘their’ product
• Invest in Market research as every single co. is
ready to spend $$$$$s of money
• Being an unbiased researcher would flow
money into company
• Circle of excellence- promoting the customer
himself.
• On the customers, for the customers and by
the customers- Democracy in BizRate.