Research Proves Bad Customer News Travels Fast; Turn Madvocates Into Fans
by Diane Berenbaum, Senior Vice President, Communico Ltd. -
July 27, 2011
Research Proves Bad Customer News Travels Fast; Turn Madvocates into Fans by Diane Berenbaum, Senior Vice President, Communico Ltd., diane.berenbaum@communicoltd.com, 203-226-7117, ext. 125
Turns out bad news really does travel fast. According to a March 2011 study by COLLOQUY, 75% of the general population will advise friends and family when they have a bad experience with a product or service. That surpasses the 42% who say they always recommend a product or service they really like.
In fact, even the most loyal consumers, those who are willing to recommend brands, have a strong inclination to engage in negative word-of-mouth: 31% said they are far more likely to tell family, friends and co-workers about their bad experiences than their positive ones.
It’s clear that seemingly casual consumer conversations play a distinct and crucial role in buying decisions, and ultimately market share.
COLLOQUY set out to better understand the reality of this word-of-mouth (WOM) trend, and discovered that there are three large and important consumer segments:
1. Advocates—They are likely to recommend their favorite brands, but are not necessarily well-connected or highly-networked.
2. Connectors—This group has a large network and frequent communication with others. But, they do not necessarily talk about or recommend their preferred brands.
3. WOM Champions—This is a key contingent as it represents the overlap of the two groups above. Not only are they highly likely to recommend their favorite brands, but they also have a large network of frequently-contacted friends and family.
The good news is…33% of the population fall into the WOM Champion category. That means there is a lot of positive information spreading around.
But, the bad news is that the study identified another subgroup—WOM Champions who are far more likely to spread a bad experience than a good one.
This group, dubbed “Madvocates”, can wreak havoc on a company's reputation and bottom line.
“One lesson is clear; hell hath no fury like a champion scorned,” declared COLLOQUY managing partner Kelly Hlavinka. “Madvocacy is an attitude that nearly a third of all champions share and are willing to act upon.”
For now, just 7% of the general population is “Pure Madvocates”—consumers who aren’t connected to brands and aren’t willing to advocate for them, but are oriented to negative WOM. And, who are these madvocates? Well, pretty much everyone. They come from all demographic groups in surprisingly similar proportions.
Think your WOM Champions are an unshakeable line of defense? Think again. According to COLLOQUY Partner Jim Sullivan, “Word-of-mouth champions can spread the good word or switch to madvocacy mode, depending on the treatment they receive.”
So, it makes sense to stop the “madness” and prevent this switch from occurring. Here are four strategies to get you on the right track:
1. Concentrate on fundamentals. Focus on delivering on your brand promise. Address service issues and head off any negative WOM that can quickly go viral from these well-connected customers.
2. Identify your WOM Champions and treat them well. Avoid the temptation to reward biggest spenders or those who deliver the most efficient ROI. These Champions can ultimately have a greater impact on your brand reputation and market share.
3. Reallocate your budget to programs that improve the customer experience and WOM. According to Satmetrix’s 2001 Net Promoter Industry Benchmark study, the following factors have an immediate impact on the customer experience and are primary reasons for defection:
• Interacting with rude or disinterested employees was cited most frequently (34%)
• unexpected charges/fees (20%)
• poor product or service quality (20%)
4. Don’t discard the Madvocates. Treat them right and they can fuel positive WOM.
Source: COLLOQUY's WOM survey, featuring completed responses from 3,295 U.S. consumers nationwide, was conducted in December 2010.
Author: Diane Berenbaum, Senior Vice President of Communico Ltd. (www.communicoltd.com). She can be reached at diane.berenbaum@communicoltd.com or 203-226-7117, ext. 125
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