Return on Complaints

Conventional wisdom has it that people talk about negative experiences with products, services, or organizations with more people and more often.

However, people are actually more active in telling their friends about a positive experience.

In its 2010 Global Customer Service Barometer survey, American Express found that, contrary to popular belief:

[...] customers are spreading the word willingly and widely when they experience good service. In fact, contrary to conventional wisdom, customers are more inclined to talk about a positive experience than complain about a negative one. Three-quarters (75%) are very likely to speak positively about a company after a good service experience in contrast with 59% who are very likely to speak negatively about a company after poor service.

A strong customer service culture is, by far, the most influential thing a company can do to increase customer advocacy. Personal experience, company reputation, and recommendations from family and friends are the strongest factors for considering a product over another.

What happens when consumers go online? Invariably, searches focus on finding the problems, if any, with a service or an organization. The American Express survey confirms, the majority, 57% says they put greater credence in negative reviews on blogs and social networking sites than on positive ones.

People expect that companies are listening. Whether those organizations are active in social media or not, they expect to receive a response. And retaliating for negative reviews is not the way to go. Feedback can help you improve your business.

The biggest impact an organization can have on its bottom line comes from satisfied customers. We choose where we buy and how much we're willing to pay based upon the experience we have dealing with a company.

According to the Harris Interactive survey conducted for RightNow Technologies linked above in my post from last October, 40% of the people began purchasing from a competitive brand simply because of their reputation for great customer service.

There is a silver lining in the RightNow report.

Return on complaints

58% of survey respondents said they would like the company to respond if they left a comment on a social networking site like Facebook or Twitter. The time frame for that response?

• 42% expect a response within a day
• 39% within a week
• 7% within an hour
• 2% within a minute

But only 22% of those who actually did leave a comment on a social networking site got a response. Those organizations that get busy addressing concerns, rather than retaliating, earn a second chance and may gain positive word of mouth from customers.

I'm thinking that one day is a generous margin for timing. Especially in a medium where things move so fast. What happens when your issue needs solving right away? Would addressing the issue while resolution is pending be acceptable?

How many misses does it take you to be done with a business? Have you had good experiences with (legitimate) complaints being addressed?

Consumers are not feeling the love in countries like Australia (71%), Germany (66%), and Canada and Italy (65% each). In those countries consumers say they feel companies haven't increased their focus on service or are paying less attention to it.

Stuff happens. It's how an organization deals with it that makes a difference, especially to the bottom line [graph depicting Average Percentage More That Consumers Are Willing to Spend].

 

[Beth Harte and Anna Barcelos collaborated on this post as members of Conversation Agent customer-centric content advisory board]

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Comments

[Judy Gombita]

Thinking you might find this Toronto Star article of interest,

Cyber-libel: Defamation on a keyboard. Check out the opening paragraph, "Corporations, governments, charities and even Facebook members should think twice before hosting interactive comments, say lawyers who specialize in defamation. Having a comment box — or even a wall — is an invitation to potential liability."

http://www.thestar.com/business/article/985998--cyber-libel-defamation-on-a-keyboard

(FYI, the Edelman Trust Barometer generally supports the theory as well, that compliments are slightly more likely than complaints.)

Looking forward to discussing these things face-to-face with you next week during your first visit to the T-dot, Valeria!

[Richard Shapiro]

Valeria has given us an excellent recap of why companies need to make providing excellent customer service their number one priority; service that makes the customer feel welcomed, appreciated and important. Service that builds a connection with the consumer and turns them into loyal advocates who will be more than happy to share their meaningful experiences with their friends, relatives and the community at large ....through both traditional word of mouth and social media communication channels. Consumers' expectations on response times have continually risen over the last few years with more and more demographics using mobile applications. And the younger generation will demand almost instant service delivery moving forward. Valeria, thanks once again for highlighting so many valuable points in one article. Richard Shapiro, The Center For Client Retention

[Amvandenhurk]

For me, this is the sentence says it all, "Stuff happens. It's how an organization deals with it that makes a difference, especially to the bottom line." That is key. Customers want to be engaged and responded to. Happy customers are your best allies. The companies which get that do well.

[Michael Hill]

Interesting article. I wonder about the point made that people are more likely to talk about a positive experience. If you look in depth at positive stories spread by customers you are likely to find an underlying theme - they are often about how a company transformed a negative (a complaint or problem) into a positive...!

[Valeria Maltoni]

there have been articles like that one for years. Getting up in the morning is an invitation for something bad to happen to you. Thank you for the link.

Excited at the prospect of getting to talk about this stuff without the limitations of comment boxes ;-)

[Valeria Maltoni]

it is something we do face to face. Think about it. I have dozens of people a day ask me for recommendations on providers, products, services, etc. People pass along information on good experiences where it counts -- and it converts.

Companies that take a "wait and see" approach, or bank on showing that people are lazy, or worse whiners, lose. Period. People are voting with their wallet in increasing numbers.

Why the impatience some may ask? Because we have been waiting for organizations to listen for too long before social technologies made it easier to see the reactions of many more we may not know personally.

[Valeria Maltoni]

acknowledging a person should be dial tone - something everyone can do. Who likes to be ignored?

[Valeria Maltoni]

maybe online? Offline, people tend to cut to the chase. Want to know who is the go to mechanic? Here's the name of one who will not let you down, etc.

[Ryan Stephens]

I wanted to re-visit this since my first comment didn't work, and candidly this probably won't be half as articulate because it's not fresh on the mind. I apologize.

My problem with responding to every Tom, Dick, and Jane that post a complaint online directed a friend as opposed to your brand is that in answering those complaints are the brand's not encouraging that approach?

If every time someone whines you come to the rescue (and this works for guys like Vaynerchuk), aren't we teaching them to expect that response? And is that the best strategy?

What if we had an architecture in place that enabled people to address their complaints to specific parts of a company instead of blasting it to anyone who'll listen. YES - it's powerful to convert someone that way, but are you setting yourself up for failure? Is it *really* scalable? Maybe, but I'm unconvinced it's the best approach.

[Valeria Maltoni]

which is why it's important to focus on the key data point of this post -- doing good by customers is going to be more profitable. The return on complains, it turns out, is quite negative.