Wednesday, November 25, 2009

The Bad Side of Social Media

Just like nearly everything else, there is a good side and bad side in Social Media...


I Love How I Hate You

It strikes fear in the hearts of marketers worldwide: the dreaded online consumer complaint that goes viral. What's a good company to do when one angry customer threatens to destroy its image? Is there any way to win her back once she's decided she hates you?

Some interesting new research looks into customer anger—specifically, the desire for revenge, which is to be most feared online—and offers some guidance for "hated" companies.

First, the researchers examined whether online complainers hold a grudge over time. The short answer: Yes, they do. But here's an important caveat: In general, an angry consumer's desire for revenge decreases over time.

Second, the authors examined the "moderation effect of a strong relationship" on how customers hold a grudge. Interestingly, they found that "over time, the revenge of strong-relationship customers decreases more slowly." Oh, swell.

So, what's a good company to do? Here's the authors' advice based on their research:

Offer an immediate apology to loyal (high-relationship) customers. Following a complaint from a loyal customer, "quickly offer them a recovery that includes an acknowledgment of responsibility, an apology, and a 'normal' compensation in the form of a gift certificate or replacement," they advise. They add: "[F]irms need not 'go beyond the call of duty' with high-relationship-quality customers, who seem to be more interested in the social than the economic value of a recovery." (Finally, some good news.)

Fuhgettabout the "low-relationship-quality" complainers. The researchers conclude that winning back less-loyal consumers is too costly to warrant compensation, since their need for revenge generally dissipates after five weeks, anyway.

The Po!nt: If she's loyal, show you're sorry. A loyal customer who feels wronged can be a nightmare, but a quick and sincere apology may quench her thirst for revenge.

Source: "When Customer Love Turns into Lasting Hate: The Effects of Relationship Strength and Time on Customer Revenge and Avoidance," by Yany Grégoire, Thomas M. Tripp and Renaud Legoux. Journal of Marketing, 2009.

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patmcgraw said...

A company might want to have a really good process in place for identify those customers with the potential (unrealized at the time) to become a loyal customer.

Just because I am not "loyal" today doesn't mean that your actions wouldn't make me "loyal" tomorrow.

Unknown said...

An additional note: At least apologize for the "inconvenience" even if you didn't do anything wrong. No matter who is at fault, the customer was inconvenienced.

ScLoHo (Scott Howard) said...

Very good point Pat!

When a customer feels negatively passionate about you or your company, you can turn that into passion around and create a passionately loyal customer IF you show true compassion and concern instead of "just doing your job".

ScLoHo (Scott Howard) said...

Yes, Beverly, you are correct. I appreciate your added input.

Anything we can do to create a positive impression will keep us ahead of those that don't care.