Damage Control: Bad News Travels Fast

The evidence continues to mount that on-line communication and social networking is playing and increasingly important role in the consumer’s decision to buy your brand. It seems a day does not go by without another story about the importance of integrating social networking in your go-to-market strategy. The stark reality is that if you have any business at all, something is bound to go wrong. The key is minimizing service outages and, when something is amiss, pacifying the consumer to a) retain a loyal customer and b) prevent them from using the new mass media to campaign against your brand. Nothing makes an angry consumer happier than to take other people with them.

A story in the New York Times today by Alex Mindlin discusses a study in the Journal of Consumer Research which tracks 172 angry consumers who made their complaints known on ConsumerAffairs.com and the Ripoff Report.

Does time heal all wounds? Yes and no. The report says that over time the desire for revenge on the part of loyal consumers does decrease. But that revenge factor is replaced by the desire to not do business with the offending party. If the customer considers the brand relationship to be more casual, they are less inclined.

The research also tracked a scenario where people where told to imagine being mistreated in there favorite restaurant. Loyal customers were 25 percent less likely to crave revenge if offered a $50 gift certificate. The casual customers, perhaps sensing a battle for their loyalty, required $100.

Bad news has always traveled fast, and it’s faster than ever now. This case study makes a clear and concise point about the customer experience. Service outages have to be dealt with quickly and substantially. The problem will not go away, the customer probably will, and they will take their friends and whoever else will listen along with them.