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.