One negative customer review online can cost you 30 customers

If one negative customer review using social media can cost your business 30 customers, why aren’t you there yet? Not participating in the conversation with your customers online doesn’t mean it won’t happen, just that your voice won’t be heard at all.

FacebookIn the US on March 13 this year, Facebook surpassed Google in becoming the most visited website for the week. So what does this mean for businesses?

As social media is further embraced by your customers, the resonance of their voice online will grow as will the repercussions from negative sentiment directed towards your brand or products. According to research by Convergys Corp, a negative customer review on YouTube, Twitter or Facebook can cost a company up to 30 customers.

A customer review through social media reaches on average 45 people, two-thirds of whom said they would either avoid or stop doing business entirely with a company they heard bad things about online, Convergys found.

“The word ‘Media’ with social is about the power and reach” says Jasmine Batra from Arrow Internet Marketing, businesses will have to learn to change and adapt quickly to ensure they aren’t left behind she claims. This also means companies will need to improve their service levels and products, with 1 in 5 people lashing out negatively about a product or brand online.

Fortunately up to 70 percent of Australian businesses plan to embrace some form of social media for their business in 2010a significant increase from the 40 percent engaged in social media in 2008 found the Nielsen-Community Engine 2010 Social Media Business Benchmarking Study.

Melanie Ingrey, research director of Nielsen’s online division believes customer engagement will be the key driving factor of businesses taking up social media in 2010.

“In the past year, there has been substantial growth in the number of consumers engaging with companies via social media, up from 23 per cent in 2008 to 38 per cent in 2009.”

  • http://www.foodfranchise.net.au David

    This type of problem can have a big effect on franchise operations as one bad manager or store can impact your entire brand. Looking at some of the past examples such as the Domino’s Youtube cheese clip…

    The problem for business is how they can allocate the resources to monitor and respond to every possible site such as Google Maps, TrueLocal, Yelp…

  • http://foodfranchise.net.au David

    Just followup point, based on the size of some peoples friends networks, i would figure that amount could actually be far higher than 30 customers. Based on if you write on the businesses Facebook page, post a status update and even if just one person responds that is a 2 fold increase in those who are exposed to your gripe/complaint. Most business doesn’t have the resources or mind frame to deal with that…

  • http://www.womow.com.au Fiona Adler

    True, but positive customer reviews are equally powerful! Why is it that when reviews or reputation management is mentioned, most businesses assume they’ll need to address poor feedback? If a business provides good service most of the time, they should capitalise on this and start building their online reputation by encouraging customers to review them or mention them online. If they later get some negative feedback, it’s the balance of opinion that matters – not just one comment. Social media allows businesses to be promoted based on merit – so the winners are those that focus on actually providing great service (revolutionary I know!) and can mobilise their customers to share their word-of-mouth online.

  • http://www.shoutwebstrategy.com.sg SEO Singapore

    Social media is becoming a powerful influencer on brands of all size. Brand now need to become a movement. The days of talking at people are over. We are moving into the age of engagement. Where the customer feels part of the experience. Companies will always receive a bad wrap no matter how good they are. Obviously increased service levels to begin with will help, however how the company deals with the online complaint is very important. The comany needs to have a voice in these discussions and be open about what happens. This will go a long way to defuse the situation and build trust.