Here is a screen grab of that email test:

Over the coming weeks, a new wrinkle will be added to the test in which one of three Feedback “flows” will be presented to buyers in order for them to provide detailed feedback to sellers.

Those 3 different Feedback flows are as follows (click for full screen):

Lots to cover… and I’m sure this will generate quite a discussion. So here is a transcript of my conversation with Brian… I’ve also included his responses to my “5 Minutes with…” at the foot of this post.

Cheers!
RBH

Can you start off by giving us a brief overview of the Feedback tests?
As you can imagine, we regularly receive input from our members about our Feedback system. We gather input on potential changes to the Feedback system in a variety of ways, including focus groups, online surveys, and site tests like the one we are about to conduct. Each of these methods provides different types of input that help us better understand how potential changes will impact the system. This test will present three (possibly four) different new leave Feedback flows to buyers. It will only affect a small number of sellers, about 600, and only a small percentage of their listings, up to 2%.

The selected sellers are larger sellers with large volume so the 2% will not impact their overall Feedback or DSR scores, but just in case, buyers will be given the opportunity to leave conventional Feedback and DSRs after being presented with the new flow.

When do the tests begin? How long do we anticipate them to run?
The test will begin next week and run for 4-6 weeks.

Who is being targeted for these tests?
The selected sellers are sellers who are participating in an existing Net Promoter Score (NPS) test – where we ask their buyers an email asking how likely they are to recommend the seller.

Can you define Transactional NPS?
Net Promoter Score or NPS is an industry standard tool for measuring customer loyalty. Net Promoter is based on the question” How likely are you to recommend to a friend or a colleague?” In fact, we (eBay) and hundreds of other companies – large and small — use it to measure our customer’s loyalty and build strategies to improve it.

Transactional NPS is applying this customer loyalty metric after each transaction, much like we do with Feedback today.

What are we hoping to learn through these tests?
The goal of the test is to determine if we will receive similar buyer Feedback asking the NPS question via the leave Feedback flow vs. our current pilot of sending an email to buyers. NPS provides sellers with much richer information about the transaction and the sellers who’ve participated in the pilot have pleased with the added information.

How will Transactional NPS replace or complement the existing DSR format?

First, no changes are pending or planned for this year, this is a test to gather information. If successful we would likely expand the test to validate the information against a larger set of sellers or even in a country.

There are two elements of the existing FB system, conventional Feedback and DSRs. The system we are testing would apply to both, so we are looking at changes to both aspects of the system.

Will DSRs be changing? Going away all together?
DSRs are an important way for buyers to provide input on a seller’s performance. We are evaluating altering how we ask buyers to rate sellers, moving to more objective questions and when we have information about an aspect of the transaction, such as delivery confirmation within the time specified by the seller, we don’t need the buyer to rate the seller.

I’ll take that as a yes. Is the intent that the new feedback flow will go beyond indepth field research for businesses?
The goal is to provide sellers with more detailed, actionable information, while removing some of the emotion that drives inappropriate behaviors from the existing system.

What kind of language are you planning on instituting in these tests to ensure that buyers still understand the need to leave traditional DSR feedback IN ADDITION to the new feedback flow?
All buyers who leave the “test” Feedback will be presented a confirmation page. On that page will be a link to the conventional Feedback system so they can leave conventional Feedback for the seller if they wish.

Why should sellers be pleased to hear about this test?
We’ve heard their concerns about the accuracy of the current system and are looking at ways to obtain more accurate Feedback from buyers.
This should help our best performing sellers.

Testing should also signal to the sellers that we don’t want to make changes without understanding the impact to the business first. Changes to the Feedback system can be very disruptive since sellers rely on this data for evaluating performance and we use it for determining seller benefits. It’s not always possible to test every change, but whenever we can we will.

We launched eBay Ink 13 months ago and in that time, the changes to feedback – specifically the DSR feedback system – have created the most comments (predominantly negative) to the blog. Is this step the first in many that see us “fixing” the feedback system in the eyes of our sellers?

All systems have weaknesses, the eBay Feedback system is no exception. Over the years we have looked to enhance the system, and this is part of that evolution.
Enabling buyers to leave more accurate Feedback and measuring sellers against actual performance when we have the data will enhance the overall marketplace. Feedback and DSRs are much maligned, but they actually provide sellers and eBay a wealth of information about seller performance that we can’t get elsewhere. Every seller should want to know what their buyer thinks about the transactional experience so that the seller can improve performance or address the buyer’s issue.

Anything you’d like to add in closing?
Just to emphasize that this is a test. Based on what we learn we may make tweaks and further test. In the meantime, sellers should leverage DSR reports, especially the new reports which allow them to see how many low (meaning a 1 or a 2) DSRs they receive.

Also, I would like to plug this reporting page we developed for sellers last year. Sellers should book mark it – it’s a one stop page for sellers to go to report Unpaid items, Feedback extortion and other buyer violations. http://pages.ebay.com/help/sell/report_problem.html

5 Minutes with… Brian Burke

Full Name: Brian Burke
Nickname: Brian
Official Title: Director, Seller Standards & Feedback
What You Really Do: Responsible for developing minimum selling standards and consequences for those who don’t meet them (only when necessary) and for developing enhancements to the Feedback system, including DSRs.
Your First Day at eBay: June 1, 1999 – wow, time flies!
Education/Schooling: undergrad – San Jose State University, grad school – University of Phoenix
Interests: My three kids, volunteer on my kids school board, college sports, especially football
Favorite Quote: You can’t escape the responsibility of tomorrow by evading it today – Abraham Lincoln
Most memorable eBay experience: Too many – here are two, Voices Three (my first Voices) and the entire first eBay Live in Anaheim
Most recent eBay purchase/sale: Bought the book the Wind & the Willows for my son, after taking him on Mr. Toad’s Wild Ride at Disneyland last month
Favorite Albums: Beatles – White Album, U2 – Sunday Bloody Sunday
Favorite Movies: Any Hitchcock movie, Saving Private Ryan, Finding Nemo
What You Wanted to Be Growing Up: An NBA basketball player

Fill in the blanks:
I should have slept in yesterday (it was Monday when he answered this).
I wish that I could play a musical instrument.
The first thing I do when I get to work is check email.

This morning, a Paris court ruled that eBay is not liable for the sale of any counterfeit L’Oreal products on the site. The case came about when L’Oreal alleged that eBay was profiting from the sale of counterfeit goods.

The judge ruled that eBay proved it was fulfilling its “obligation” to try to prevent the sale of fake goods. This is the second such case L’Oreal has lost against eBay, following a similar ruling in Belgium last year.

eBay spends nearly $10 million a year fighting online crime and counterfeits. In a statement, Mary Huser, deputy general counsel for eBay said:

“This is a clear legal victory for eBay and important victory for French consumers. We are delighted that eBay’s meaningful efforts to fight counterfeits online have been recognized by the court, as has our status as an internet-hosting provider.

“Today, 99% of all items listed on eBay have no suspicion of counterfeits. We welcome the invitation to resolve the outstanding matters in an amicable way, as we have always believed that cooperation is the best way to fight counterfeits. Ongoing dialogue and collaboration, rather than litigation, is the only way to address these complex issues, which is in everyone’s best interests.”

Next week, eBay is expecting another ruling on the same case in the UK, and although today’s win is encouraging, the company remains mindful that there are still potential future battles to be fought. That said, today’s ruling in France follows similar legal victories in the U.S. (Tiffany), Belgium (L’Oreal) and Germany (Sternjakob).

eBay hopes the results in the L’Oreal case will serve as a caution to those companies considering litigation against eBay – and encourage them to discuss the issues through constructive dialogue instead.

Cheers,
RBH

Related Reads:
TameBay: Court tells L’Oreal: eBay isn’t responsible for fakes
FT.com/techblog: Ebay wins French L’Oréal fakes lawsuit

1) According to a recent blog post by Randy Smythe, eBay has become a fixed price market but according to a recent eBay webinar presented by Todd Lutwak, auctions are alive and well and “auction style still accounts for 70% of the listings on the first page of search results.” This seems contradictory or are they both right? Is there equal room for both formats in the marketplace?

Yes, there is plenty of room on eBay for auctions and fixed price, and what Todd was driving at is that there are specific strategies for succeeding with both. It is not “this OR that” it is “this AND that”. But I think you are missing the broader point.

What’s been said outside of eBay is that lower prices and free shipping are “what eBay wants”. The reality is that it doesn’t matter what eBay wants… eBay.com is a marketplace and that means neither eBay nor our sellers get to set the price of goods sold on the site, buyers do. This is as true in auctions as it is in fixed price. Lower prices and free shipping are what buyers want.

The difference today is that buyers know how much items are worth because they can compare prices easily across the web. Whether you’re selling in auctions or fixed price or both, the point is that you are competing against the entire universe of merchants, not just other eBay sellers, and if you want to win the sale you have to price yourself accordingly.

Layer on top of that a lousy economic picture, where consumer demand is declining and inventory levels are swelling, and you have a lot of downward pressure on prices across the board. All you have to do is look at last Thursday’s NY Times and you’ll see that this is not limited to eBay.

2. Back in April I posted a video interview where Pierre talks about the “Level Playing Field” – where all sellers are treated equally – as being core to eBay. Yet within weeks we established the Diamond Tier of PowerSeller under which those who qualify receive negotiated pricing that is better than what’s available to most sellers. Isn’t this a contradiction?

When we think about Level Playing Field, we tend to focus on equal access to opportunity. In other words, anyone can come to eBay start a business, establish a track record and grow according to their capabilities. It doesn’t mean we will treat everyone the same, regardless of their track record and capabilities, but it does mean that we will make it possible for anyone to succeed.

In terms of the Diamond Tier of PowerSeller, we are willing to negotiate special pricing with any seller who can meet the very high customer service and volume requirements we demand of these sellers. Making it possible for anyone to access our market and succeed as a seller and offering incentives to the very best sellers are not mutually exclusive goals.

3. But back in May, Lorrie Norrington stated here that small sellers are our competitive advantage. If that’s true, why would we give a competitive advantage to the very largest sellers?

First of all, any seller of any size can list an item in the auction format today and they are virtually guaranteed that their item will get to the top of search results as their auction comes to a close. This is absolutely as true today as it was in 1998.

Second, our goal is to provide a vibrant and extremely competitive marketplace. In pursuit of this goal, we have recognized that the scale and capabilities of large merchants absolutely enhances buyer demand for eBay items. However, the needs of very large sellers differ from the more typical eBay seller and that has spurred us to both negotiate bulk pricing and to add things like Large Merchant Services APIs (which we did today).

At the same time, we know that many buyers shop eBay not just because of the values and selection, but also because of the one-of-a-kind experiences small sellers create. So we must continue our appeal to small sellers and do everything we can to help them stay competitive. To this end, we are still the best place on the Web to start a business because of the low barrier to entry and because we allow sellers to build a brand and own the relationship with their buyers. To help sellers stay competitive, we are offering more useful advice, such as last week’s webinar.

4. Jack Sheng recently visited eBay HQ to celebrate reaching 1 MM feedback as a seller – something he accomplished in a relatively small amount of time but he started out before 2008; I recently wrote a post that stated I still believe eBay is one of the best places to launch a business online, but is it really still possible to start today and enjoy the kind of success Jack has had?

Not only is it still possible, with FP30 it may be even more likely. Jack built his business in an extremely competitive category and through experimentation, smarts and determination built something hugely successful. What’s more, he did all this on an eBay platform that was simply not optimized to enable sellers like Jack who wanted to move mass quantity. Today, a new seller who can access well priced inventory will find a partner in eBay that can more readily on board them and scale with them as they grow. It is not easy and it is not for everyone, but there are literally millions of people and businesses who are profitably making eBay work for them.

UPDATED 11/25/08
I’ve seen a few comments on blogs and Twitter that suggest that Diamond PowerSellers receive special treatment with regard to their DSRs. Something that I’ve been told on a number of occasions is simply untrue. As a result, I went back to Dinesh and asked him specifically about that. He responded with the following:

“As a requirement for listing on eBay, all sellers – regardless of volume, category, and PS level (including Diamond Level) and without exception – must adhere to the same standards with respect to DSRs, feedback and policy compliance.”

UPDATED 11/26/08:
Todd Lutwak also sent me the following in email this morning:

“We have not, are not currently, and will not manipulate feedback or DSR’s for any seller on eBay.”

Related Reads:
Mercent Launches Enterprise Seller Tools for eBay and PayPal

In it, Stephanie promised even bolder and faster changes at eBay, stating that eBay’s goal is to deliver a more retail-like experience. She indicated that ensuring buyer confidence in every eBay transaction and taking care of its customers was the company’s first priority. She also made it clear that the concept of an annual price change no longer existed at eBay and that further pricing adjustments could come at any time.

At the same time, Stephanie –a long time eBay Top Buyer herself – also committed to keeping the things people love about eBay intact, namely its value and selection, noting that the fun comes in finding exactly what you want – pretty much no matter what it is – when you want it.

There’s that word again – “change”. In the three months I’ve been on board at eBay, it seems that every week brings another significant change to how our customers (buyers and sellers alike) do business on eBay – and partnered with those are some significant executive changes. I even got a new boss today.

No one feels comfortable with change, no matter how beneficial it can be, so I’m hoping this blog will provide an opportunity to explain and rationalize the decisions made as we move forward.

Bear with me though, it’s only the first day after all.