Wanted: Reputation Killer - Negative Word-Of-Mouth

You can’t please every customer all of the time. But you can take action and make sure the unhappy ones don’t hurt your business with negative word-of-mouth. By Cheryl Sowa

We’ve all experienced it—poor customer service, long lines, faulty products—all of these things contribute to a negative shopping experience. At the same time, everyone has experienced a pleasant shopping trip with exceptional customer service, fast checkout, and we all leave satisfied. However, customers are more apt to talk about their negative shopping experiences rather than the positive ones. This leaves businesses tarnished and acquiring bad publicity. How can you avoid negative word-of-mouth? What can you do for damage control? These questions and more will be answered to calm the nerves of those businesses affected by the reputation killer: negative word-of-mouth.

Spreading Like Wildfire

TARP, a behavior research company based in Arlington, Va., found something interesting while exploring the effects on businesses of word-of-mouth. The study found that customers who leave a business happy and satisfied with their experience may share the positive occasion with just a few friends who will not remember much of the conversation, and not think to share the information. On the other hand, TARP found that customers who had an awful experience will share their negative incident with an average of 12 other people. In turn, each of those 12 people will mention the occurrence to six others. This means that the one person with the bad experience will discuss it with 12 others, and each additionally to six individuals. Do the math: (1+12+ (12x6)) which totals to 85 people who will have a tarnished view of your business because of one negative experience.

Furthermore, a 2005 study by Informative Inc. confirms TARP’s findings, and also includes some fascinating financial information. Informative Inc. found that negative word-of-mouth has an average of 2.4 percent more financial impact than positive comments. As negative comments increased, profits decreased. Following the same pattern, as negative comments decreased, profits increased. Surprisingly, there was little correlation between positive word-of-mouth and profits.

Damage Control

If negative word-of-mouth affects your business, the most important thing to do is take action. The worst possible thing to do is to ignore the negative comments. There are a number of things that you can do to keep negative word-of-mouth from spreading like wildfire.

Acknowledge and Address the Situation. The first step to correct negative word-of-mouth appropriately is to acknowledge and properly address it. When a mistake happens at your business and a customer decides to rant about it to others, step in as soon as possible. If necessary, go out of your way to acknowledge the incident the customer endured.

Correct the Crisis. After you have addressed the customer who has given you negative word-of-mouth publicity, the next step is to correct the problem. This could be in the form of an apology letter, phone call, or even meeting in person. Keep the apology sincere and recognize that you were in the wrong. If applicable, you could send a small gift or incentive to return to your business in the future. By resolving the customer’s issue, you have indicated to your customer that you value their business.

Ask for Feedback. In order to prevent others from having a negative experience with your business, ask customers for feedback. Gaining feedback will allow you to correct what the customer found wrong with your business and prevent others from having a negative incident. Additionally, there could have been many more customers who experienced the same issues, but did not bring them to your attention.

Listen and Understand. As a business owner, you might not want to hear negative comments about your business, but constructive criticism is what keeps your business healthy. Try to understand what the customer is concerned about and get them involved with solving the problem. Engaging the customer shows that you acknowledge their issue and have a responsibility to solve it. Customers who are active participants in the problem-solving process will see that you value their opinions and not just their money.

Beware of the World Wide Web

Decades ago, negative word-of-mouth had a completely different dynamic. Although people still fumed about negative experiences at businesses, it did not necessarily reach as many people as it does today. With the Internet, most negative word-of-mouth is spread through cyberspace. There are many websites designed to allow people to vent about negative experiences with businesses. In addition, many online retailers provide a section for customer feedback. This allows unhappy customers to directly express their feelings to the company which wronged them. Although this seems like the most effective way for businesses to gain feedback, beware. The comments which are left on websites by customers complaining about a product or service are most likely on the Internet for awhile. When other consumers see the negative word-of-mouth about your business, they will be turned off by your company and look to your competition. The negative word-of-mouth in cyberspace is much more detrimental to your business because it does not disappear, but rather stays on public display for some time.

The Internet provides limitless possibilities for your company to be branded positively, negatively, brought up on a website, or even mentioned in a comment on a completely unrelated website. In order to keep track of what anyone in cyberspace is saying about you, sign up for Google Alerts. Google Alerts allows you to search the Internet for any keyword of your choice: topic, phrase, name, business, anything. It sets how often it will search for your keyword, the type of material Google Alerts will search, and alert you via e-mail when your keyword appears on the Internet. Google Alerts has the ability to keep you informed up to the minute about any positive or negative word-of-mouth about your business, which in turn allows you to address the issue as soon as possible.

Negative vs. Positive

It is obvious that negative word-of-mouth is devastating to your company, but what can be done to avoid it? The truth is, not much. Some believe a way to prevent negative word-of-mouth is to constantly promote your business via positive word-of-mouth. In fact, that could be just as damaging to your business as negative word-of-mouth if carried out in the wrong way. Any positive word-of-mouth that is flawed and gives incorrect information misleads customers, allowing the chance for negative word-of-mouth. On the other hand, a business owner who utilizes their family and friends to positively promote their business using word-of-mouth could be effective, if they deliver correct information in the appropriate setting. Otherwise, constantly promoting your business via positive word-of-mouth could be as annoying as spam blasts. Take the time to research what works and what does not work for word-of-mouth before putting it to work. There are a number of resources listed above to give you a jump start on learning about word-of-mouth marketing.

Child’s Play

Negative word-of-mouth is similar to the popular children’s game, telephone. As the original message gets jumbled, the new message gets passed along without any way for the previous participant to justify the difference between what was said and heard. This is similar to negative word-of-mouth for businesses. As soon as one customer has a poor experience, the word spreads without any way for the business to address the incident. It is possible for the story to be changed through the grapevine. To address this, it is important to do everything possible to provide the best possible service for every single customer. One way you can do this is to treat every single customer as if they are your only customer. This way, you devote all attention to each customer and will go above and beyond to satisfy their needs. By showing your customers a rewarding and positive experience, you will gain not only their business, but their trust. Customers who trust businesses are much more likely to return and give direct, honest feedback. Instead of getting caught up in the problems that come with negative word-of-mouth, take the time to develop an excellent customer service plan to keep customers happy.

Live and Learn

DoubleTree Club Hotel felt the brutal impacts of negative word-of-mouth from the wrath of two internet consultants from Seattle. Tom Farmer and Shane Atchison were refused rooms at the DoubleTree Club Hotel after credit card confirmation and a noted late night arrival in Houston. Their rooms were given away earlier in the night after the front desk employee assumed the two men were not arriving. The DoubleTree Club Hotel offered little-to-no help and made the situation difficult for the two men, one of which was a Hilton HHonors Gold VIP member. Enraged, Farmer and Atchison created a PowerPoint describing everything that happened that night at the DoubleTree Club Hotel. The two men included approximately how much money the Houston branch would lose, quotes from the employee at the front desk, odds of the two men returning to the DoubleTree Club Hotel, and more. At the end of the PowerPoint, the two men urged people who received the presentation via e-mail to “share it with their friends.” The PowerPoint was sent in an e-mail to four people, two of which were managers at the Houston DoubleTree Club Hotel. The comment at the end of the PowerPoint worked; Farmer and Atchison had no idea how quickly the PowerPoint would flood the Internet. Estimates show that over tens of thousands of people have seen the PowerPoint via e-mail chains and posting the slideshow on various Internet websites. (You can view the PowerPoint at: slideshare.net/resultblog/double-tree-show). Hilton and DoubleTree Club Hotel have offered an apology to Farmer and Atchison. Per request of the two men, Hilton and DoubleTree Club Hotel have made sizable donations to the Houston’s Toys for Tots campaign in the hotel’s name.

The incident involving the DoubleTree Club Hotel shows how detrimental any negative word-of-mouth can be. Fortunately, Hilton and DoubleTree Club Hotel made every effort to try and combat the negative word-of-mouth, but after the PowerPoint hit the Internet, there was no hope. Hilton and many other large hotel chains documented the problem and have adjusted their services in order to ensure that nothing like this would happen to any of their clients. The incident at the DoubleTree Club Hotel is an example of how detrimental negative word-of-mouth marketing can be. Hopefully this will help you see how important it is to keep all customers content to avoid the disparaging effects of negative word-of-mouth marketing.

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