Negative word-of-mouth can destroy a company’s reputation and cause serious damage to its brand. With the advent of social media, negative feedback from customers can spread faster and further than ever before. Understandably, many companies will go out of their way to avoid attracting negative reviews from customers. But accidents do happen and every company makes mistakes, sometimes causing outcry among those who have used the company’s products or services.
However, all may not be lost. A fascinating piece of research by LoyaltyOne has actually tried to prove that the impact of negative word-of-mouth may not be as bad as commonly believed. In fact, it may even increase positive engagement, while encouraging consumers to make use of loyalty schemes.
This sounds counter-intuitive and goes against all the conventional wisdom marketers are accustomed to hearing. The full study, available here, offers an intriguing conclusion, which is certainly worth taking the time to digest.
The research by LoyaltyOne was specifically focused on a loyalty programme, however the study offers important and useful takeaways for marketers about the potential that negative word-of-mouth offers for increasing engagement.
All Press Can Be Good Press
LoyaltyOne selected popular airline loyalty scheme Air Miles as the subject for its study. The trigger was that when Air Miles changed some of the scheme’s rules, some customers were annoyed.
This is nothing new. Most changes a company makes attract a certain level of dissatisfaction from some of its users. Just look at what happens every time Facebook introduces a change to its features or appearance – droves of people threaten to quit the platform for good.
Air Miles had predicted that some of its users would have negative reactions to the changes. As with any established loyalty scheme, when rules are changed, there are usually numerous members who are highly vocal about expressing their opinions. There were varying levels of negativity contained within the comments, with some customers only mildly upset by the changes, while others were highly annoyed and expressed their dissatisfaction far more forcefully.
All is Not Lost
LoyaltyOne’s researchers analysed the comments against a control group, and discovered the most vocal respondents were actually the more valuable customers.
These results brought two main considerations to light. Firstly, the loyalty programme members who are most vocal in their negativity also tend to be the best customers. They are passionate about the brand and take the time and effort to make their feelings known. This passion is useful, because it can help marketers design an effective crisis management strategy.
Secondly, analysing the content of negative comments can provide helpful insight for brands to figure out precisely why customers are upset, and guide appropriate action to address the issue. In the case of Air Miles, researchers concluded that many of the aggrieved customers were upset because they felt emotionally invested in the loyalty scheme. Their initially high engagement level was what spurred them on to such heights of negative commentary. Apathy would have meant they didn’t care, and were probably less loyal customers.
Don’t Fear the Power of the Vocal Consumer
The LoyaltyOne study is important because it can give brands some reassurance and help them regain some semblance of control. With the power of social media being what it is, customer voices obviously have great reach. So now we know: the angriest customers are often the most valuable. In fact, LoyaltyOne found that they angry ones were 70% more actively engaged with the brand than the apathetic ones who didn’t post at all.
Negative word-of-mouth is likely to affect every company at some point. LoyaltyOne suggest the following curse of action:
- Look at the data to see what’s going on
- Take action if there is increased negative sentiment
- Be swift and sincere in responding
- Make the response highly public
- Monitor the customer sentiment attentively
When handled properly, negative word-of-mouth can actually increase customer engagement. In a nutshell: no brand can afford to ignore the reality of negative word-of-mouth in our social age. But, fear not, it can indeed be leveraged for the eventual benefit of your brand.
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