Susanna James

Why Word-of-Mouth Means Little Once You’ve Lost a Customer

By: Susanna James | November 10, 2015 | 

word-of-mouthBy Susanna James

In many ways, word-of-mouth is the original form of marketing.

For centuries, people have chosen one merchant over another based on the recommendations of friends and family.

From “that baker sold me stale bread—don’t buy from him!” to “my iPhone 6s is awesome—you should get one too!” the same pattern repeats throughout the history of human civilization.

In fact,word-of-mouth is so powerful that a reported 92 percent of consumers believe recommendations from friends and family over all forms of advertising—making it one of the most desirable tools businesses can wield.

The trouble is, businesses can’t control word-of-mouth. All they can do is try to influence it.

How Word-of-Mouth Affects Business

It is often the companies with the best products that receive the highest praise; in fact, people are much more likely to purchase a product when they learn about it from friends and family.

But it is often companies with the worst service that suffer from the worst of word-of-mouth, and this far more influences a buyer than positive recommendations.

It takes 12 positive experiences to make up for one unresolved negative experience, so the odds are stacked against companies who have made a mistake.

And for businesses who keep getting it wrong, this can be fatal. Eighty-six percent of consumers have stopped doing business with a company because of a bad customer experience

So, what how can positive word-of-mouth affect a negative experiences? Can a recommendation cancel out a customer’s bad feeling towards a company and help to win them back?

Can positive word-of-mouth outweigh negative sentiment?

Will You Return? 

A new study by customer service software provider Kayako investigated this by asking 1,000 consumers the following question:

     You’ve received bad customer service from a company in the past. How likely would you be to try them again if a trusted friend recommended them based on incredible service?

The results were surprising.

Almost 60 percent of those surveyed reported they were unlikely or very unlikely to return to a business they had experienced poor customer service from, even if a trusted friend said the service had improved.

Only 12.5 percent said they would be likely or very likely to try a company again after a bad experience, regardless of positive word-of-mouth.

What Does This Mean for Businesses?

Customers stay loyal to their disloyalty: There is little to no room for error. These results show that the majority of the time, nothing—not even peer recommendation—can win back a lost customer.

No matter how much emphasis businesses put on cultivating loyal brand advocates, positive word-of-mouth only reaches as far as new customers. It means nothing once a customer has had a bad experience with the organization.

For businesses that are investing heavily in brand advocacy and influencer marketing, this could be misdirected efforts that could be more effectively focussed on improving customer experience.

If businesses want to reduce customer churn and increase repeat custom, they need to invest in getting customer service right the first time and in doing all they can to prevent customers from leaving with a bad experience.

image credit: WikiHow

About Susanna James

Susanna is Content Marketing Manager at Kayako, the customer service software provider. Her expertise lie in helping tech companies reach bigger audiences through awesome content.

  • nmangan

    I thought the statement, “It takes to make up for one unresolved negative experience” was very interesting. I remember reading somewhere that people either  rate a service or experience when they are very happy or very pissed off about it and do not rate it if it was just okay. What do you recommend is the best practice for dealing with a customer who was angry and posted something negative on social media?

  • One of the most lasting lessons I learned from a decade or so in contact center work was the fact that satisfied customers are a good thing but one of the best customers is one who had a complaint that the organization worked hard to resolve (and to the customer’s satisfaction). I think that’s a step beyond what you’re saying here — a customer can’t be won back over by word of mouth BUT if the business take a personal action to help resolve your issues, “maybe” that will lead to your satisfaction and re-win your loyalty. Really interesting piece; I loved all that contact center satisfaction theory stuff!

  • Grand1

    I know of a law firm of 100 attorneys that has 12, full-time customer-service staff members. They do not practice law and do customer service.  No, they are full-time, customer-service staff.
    Now that is how to retain clients.

  • SusannaJames

    Grand1 Great example, thank you for sharing! Goes to show that it’s important to remember that most businesses are customer-oriented, and treating customers well should be top priority for all of them.

  • SusannaJames

    biggreenpen Thanks for your comment, glad you liked the article! That’s a really interesting point you’ve brought up – demonstrating that willingness to go above and beyond to resolve a problem can certainly be a sticking factor for customers, and gives them a positive story to share. A topic worthy of a followup blog post perhaps 😉

  • SusannaJames

    nmangan That’s a great point, thanks for commenting! Yes it seems that people are driven to give feedback (both positive and negative) only when they feel very strongly. As for dealing with a negative review on social media, the worst thing you can do is to ignore it. Always acknowledge the comment and take responsibility and apologise if it was something you’ve done wrong. Make the effort to find out what the problem is and try to resolve it. Communication is key. Here’s an article that you might find useful with dealing with difficult customer conversations: Hope that’s helpful!

  • SusannaJames biggreenpen That would be great!

  • I found the sentence “nothing—not even peer recommendation—can win back a lost customer” very interesting. It is so true and important to realize that word of mouth can only go so far. While it is important to know what your customers are saying about you, a company cannot dictate or control what is said. Therefore, you must focus your efforts on providing the best customer service possible to ensure that the consumer had a positive experience with your company.

  • SusannaJames

    allison_caley Thanks for reading Allison and thanks for your comment! Yes that’s exactly it – you only have the ability to control what happens during your customers’ interactions with you, so all your efforts should be on making those interactions positive.