The Other Side of Advocacy: Impact of Negative Word-of-Mouth, and Customer Alienation and Sabotage

0
3,521 views

Share on LinkedIn

Daiji wa shoji kara: “Serious disasters come from small causes”
—Feudal Japanese proverb

The polar opposite of Advocates are Saboteurs (or ‘Badvocates’, as coined by colleagues at leading PR firm, Weber Shandwick). Saboteurs are the extreme of what we label as ‘Alienated’ customers, whose assessment of a supplier can range from mildly annoyed and disaffected to outright, revenge-seeking anger.

In B2C situations, more than half of customers report problems with one or more elements of their transactions with suppliers. These are customers who, having had a bad experience will a) typically not tell the company about it (and there are multiple, well-documented reasons why so few customers actually complain), but b) also typically tell many of their friends, colleagues, and relatives through offline and online means. This is ‘badvocacy’, the alienated and resentful flip side of customer advocacy which may be 20%, or more, of the consuming B2C and B2B public (as estimated by Weber Shandwick), varying by the product, service, or supplier.

Alienated customers share many of the same characteristics as Advocates, just in opposite ways as regards their attitudes and behaviors. They are individuals who have poor opinions of certain organizations, brands, and products; and, they speak or act, as critics and detractors, on behalf of these organizations, brands, and products. They communicate negatively to friends and families. They communicate negatively in their neighborhoods. They communicate negatively at work. They communicate negatively online, through chat rooms, rating sites, and blogs. Some may communicate negatively to small circles of friends, relatives, and acquaintances. Some, the most motivated badvocates and saboteurs, will go so far as to set up elaborate contra web sites and encourage open griping from any and all about bad experiences.

Much of customer alienation and sabotage behavior, both b2b and b2c, has been spawned by frustration and disappointment over service and product experiences, and the feeling that brands and companies don’t share their customers’ concerns, leaving them unheard. Poor customer service experience is often the breeding ground for negative communication. These are definite reputation and image issues, also driving customer risk and loss. According to providers and customers, the proaction, quality and competence of service agents, along with their ability to address customer concerns on the first phone call or e-mail, rank as the two most important factors in delivering a superior, differentiated service experience. When these are delivered in a reactive, less-than-competent, or even unqualified manner, the potential for negative post-experience communication, as well as potential churn, is set in motion.

Expectations 2.0

Customers today are looking to benchmark their experiences against the best service and greater sophistication of Web 2.0 technologies, and they are coming to expect multi-channel support and an integrated, almost seamless, set of touchpoints and transactions. Many companies have failed to keep pace with these expectations, due to poor customer segmentation and last-generation loyalty metrics, underinvestment in, or poor design of, technology solutions, silo-based organizational structures, and poorly designed processes and agent training. What customers actually want, and what companies need to deliver, is competence and trust, i.e. a perception that service processes and technologies are designed to optimize their relationship with the company and provide value.

Even more serious, in its 2008 customer experience study, customer service software company RightNow Technologies learned that 84% of customers who experienced poor service would communicate that result to others (up from 74% in 2007 and 57% in 2006); and 87% said they stopped doing business with a company because of a negative service experience.

The dynamics of expression, both positive and negative, saw a major change with the rise of the Internet. Initially, people went to web sites just to conduct their own research on brands, products, services, and organizations. Before too long, web sites like Amazon and Ebags were offering online customers the opportunity to rate products and services that they bought and used; and customers were also able to conduct head-to-head pricing and performance comparisons, and also to offer opinions on their own experiences.

One key result of this online information accessibility was the realization that customers now had significantly more influence and power over product and service choice behavior (their own as well as the behavior of others) than ever before. In fact, the pendulum for b2b and b2c customer decision-making influence had shifted away from the companies. Consumers pretty much owned the influence and could now endorse or criticize companies, and their products and services, both offline and through online virtual soapboxes, such as contra web sites, podcasts, blogs and communities. And, sabotaging employees used many of these same online media to virally undermine their employers.

Potential Business Impact of Negative Word-of-Mouth

Studies conducted by academics and research organizations around the world have determined that negative social word of mouth, though less frequent than positive word of mouth, is at least as impactful on brand choice. For example, a 2006 retail customer study among close to 1,200 adult shoppers by University of Pennsylvania’s Wharton School and The Verde Group, a Toronto consulting company, showed that of those experiencing problems, only 6% contacted the company (in part because 46% of those who had a problem felt they would experience the same issue in the future), but 31% went on to tell friends and family. Of those, 8% told one person, 8% told two people, and 6% told six or more people.

Further, the study found that of 100 dissatisfied customers, a retailer would lose between 32 and 36 current or potential customers. Companies, as a result, need to monitor all negative communication, whether it appears online or offline, and take steps to manage it. Otherwise, they can see financial consequences such as appear in the figure below.

Figures like these will get the attention of anyone in marketing, customer service, sales, or corporate management. Negative word-of-mouth, a principal component of alienated advocacy, can have powerful bottom line impact. This plays out, for instance, in further study results of Wharton School and The Verde Group. In addition to the negative communication resulting from bad experiences, almost half of those surveyed (48%) said they have avoided a store because after learning of someone else’s problems there. For those who had had a problem themselves, about one third said they would ‘definitely not’ or ‘probably not’ return; and half felt they would probably experience the same problem or problems in the future.

Toyota Motor Corporation directly experienced the consequences of poor, and reactive, communication following the parade of recalls (over 8.5 million vehicles, worldwide) and public airing of its quality problems (accelerator gas pedals and braking systems) during 2009. This included a 1 percent share loss of the U.S. market (to 16.45%, according to Edmonds); and Kelley Blue Book stated that Toyota’s individual vehicle resale value had declined $200 to $500, for those models that were recalled (a decline of 1% to 3%). A 2010 U.S. national quality perception study among prospective buyers showed that Toyota had fallen to 7th position among 36 brands, from 2nd position in 2009. In the meantime, Ford has moved to 6th position in quality perception, and has moved into second place in U.S. market share, at 16.57% of the market (behind General Motors’ 18.12%), as identified by Edmonds’ research.

Advocacy and Alienation Buzz

It should be recognized that companies can be criticized – both online and offline – very quickly after a customer endures what is perceived as a negative experience. In Weber Shandwick’s 2007 study, The New Wave of Advocacy, one of the key findings was that, on average, nearly one out of two adults (45%) will express their dissatisfaction within one week, or less, after the experience. This is particularly important because, in the same study, Weber Shandwick found that, globally, 63% of consumers were making brand, product, and service decisions more quickly than a few years ago, with the U.S. consumers taking slightly longer. This puts more pressure on companies to monitor buzz and be prepared with measures to either quickly counter or leverage it, depending on its negative or positive nature.

As an example of the impact of viral communications speed, in mid-November, 2010, a Qantas pilot safely landed a jet in Asia, after an engine had caught on fire. Close to 500 passengers were on board. Unlike the story of the ‘miracle on the Hudson’ in 2009, when US Airways pilot Chesley “Sully” Sullenberger gained fame after landing his A320 in the river on the west side of Manhattan, Qantas didn’t begin getting its story out for 12 to 18 hours after the incident. This wasn’t enough time to overtake the negative reports on Twitter that there had been a crash; and Qantas was forced into damage control rather than basking in the glory it really deserved.

The Internet as Customer Alienation and Sabotage Enabler

Although the vast majority of influence of b2b and b2c purchase and relationship decisions continues to come from offline informal sources, the Internet has had an undeniable, pivotal role in creating, or undermining, consumer trust. For example the 2010 Decision Influence Index, an international study co-generated by Fleishman-Hillard and Harris Interactive, showed that, in some countries, consumers trust the Internet more than friends, family and print media.

This study, conducted in France, Germany, United Kingdom, Canada, China, Japan, and the United States (representing 48% of the global online population), found that the Internet is becoming a critical medium for decision-making support, in addition to being a reliable research and communication tool. Internet users will tend to look at many sources – search engines, corporate sites, blogs, review sites, chat rooms and forums, online communities, etc. – when seeking information, suggesting that truth and trust come as a result of distilling material from multiple locations and perspectives.

The Decision Influence Index study found that, while there is some concern about too much information sharing on the Internet (by about one-fifth of Internet users), consumers generally are able to find blogs, sites, and boards that are credible and linked to their interest. An average of 39% believe it is safe to communicate with others online, or twice the rate of those who expressed concern about this.

Note: It must be recognized that, for those seeking information online, or communicating themselves, the lack of authentication and validation of individuals on social networking sites can be an issue. For example, in 2008, two researchers successfully impersonated Marcus Ranum, a security expert, on LinkedIn (who did not have his own profile there). Within 12 hours, they had 42 connections to the phony profile, and then joined several LinkedIn security networking communities to build credibility. Connection requests came in from the CSO of a security firm, then a former CSO of a Fortune 100 company, and Ranum’s own sister! The point here is that social networking sites like LinkedIn, MySpace, Facebook, Plaxo, and HighFive are all vulnerable, because they are open, ‘blind trust’ social networking sites.

There is a tendency for Internet users to use multiple sources of information – credibility, completeness and reliability in information is largely a function of the ability to locate and retrieve information from a variety of trustworthy sources, and cross-check among them. They place strong trust in conversations with people they know, and they are also relatively trusting of comments posted by others. However, though the information may not be completely reliable, users will reference postings from others when making a decision. As an example, only 21% of Internet users in the U.S. trust the comments of others, but 46% find the comments useful. This pattern – the gap between trust and usefulness – is also seen in Germany, France, and Canada.

Many of these comments occur on blogs and microblogs. Microblogging, on sites such as Twitter, has high awareness as an online communications medium (78%), and the Decision Influence Study found that one-third of aware consumers have a microblog account.

When making purchasing decisions, an average of 64% of internet users in the study consider online research to be either essential or very important in making decisions. Though most users said the Internet helped by giving them information to compare options, finding advice or support from other people, acting faster, saving money, and acting with more confidence were also prominently cited. Search engines were most frequently cited as a starting point; but decision aids on some products, such as those for children and packaged goods, were often from comments given by other people (about 70%). Other sources actively referenced were blogs and social networks, as well as company-sponsored web sites and product/price comparison sites.

Overall, close to 40% of study respondents felt the Internet would become more important and influential as a communication over the next several years. In China, this opinion was given by 85% of Internet users. Certainly, in all countries included in the research, consumers are already spending an average of 12 to 15 hours per week on the Internet, about as much time as they spend watching television (except for China, where hours on the Internet were twice as high as watching television). Excluding email, a key study finding was that the Internet has been growing as a recognized information source, rapidly catching up to offline advice from friends, family, and colleagues; and it also dramatically overshadowed information received through mass electronic and print media. For example:

  • In the U.S., 42% of those using the Internet do not read magazines and 40% do not read a printed newspaper
  • In Canada, 42$ of those using the Internet do not read magazines and 28% do not read a printed newspaper
  • In the U.K, 36% of those using the Internet do not read magazines and 33% do not read a printed newspaper

These results were similar for France, Japan, and Germany. While few Chinese Internet users did not read magazines or newspapers, Chinese are much more active and advanced users, particularly in mobile communication.

One fact is growing obvious, the Internet will make protecting and managing reputations exponentially more challenging. As noted by TechCrunch’s Michael Arrington, in an early 2010 blog post:

“Trying to control, or even manage, your online reputation is becoming increasingly difficult. And much like the fight by big labels against the illegal sharing of music, it will soon become pointless to even try. The skeletons are coming out of the closet and onto the front porch. We’ll look back on the good old days when your reputation was really only on the line with eBay via confirmed, actual transactions and LinkedIn, where you can simply reject anyone who leaves bad feedback on your professional life.

Today we have quick fire and semi or completely anonymous attacks on people, brands, businesses and just about everything else. And it is becoming increasingly findable on the search engines. Twitter, Yelp, Facebook, etc. are the new printing presses, and absolutely everyone, even the random wingnuts, have access.”

Open access and freedom of speech on the Internet have bred “reputation snipers,” individuals who will set up contra web sites, post webcasts on YouTube, and give extremely negative ratings and reviews. The root causes of what can move them to act with powerful emotion-based messaging can typically be found in poor product or service experiences, or undesirable outcome of a registered problem or complaint. Increasingly, companies have to proactively monitor and prepare for brand perception and image attacks which can create negative advocacy (alienation and sabotage) within the customer base, and among potential customers and the general public as well.

LEAVE A REPLY

Please enter your comment!
Please enter your name here