by Larry Mead, Kate Kompelien and Kurt Schroeder
Thanks to the proliferation of online reviews on Yelp, Facebook, and Google, your customers have the ability to share their experiences with your brand publicly and within minutes of a service experience, good or bad. Those unhappy reviews have a direct impact to your bottom line. Research conducted by Gallup found that unhappy customers cost U.S. businesses more than $550 billion annually.
Unhappy Customers Impact More Than Revenue
It isn’t just lost revenue that must be considered when it comes to bad customer reviews. Customers who form a negative perception of your brand can negatively influence your brand image and lower employee morale.
Unhappy customers pose a significant risk to your brand’s reputation. Gallup’s research finds that unhappy customers are three times more likely to share a negative experience with friends than a positive one. Unhappy customers are also far more likely to post an online review of the negative experience. This is especially troubling because 80 percent of people report that they will not buy from an organization based on negative reviews.
Negative reviews de-motivate team members. It is easy to become discouraged when you work for a business with a bad reputation. Team members find it more challenging to work their hardest, they often view themselves as facing an uphill battle and they are more likely to blame perceived problems on poor leadership from executive management. When staff is demotivated in this way, the quality of their work deteriorates. Business owners sometimes find themselves trapped in a cycle of bad reviews, demotivation, poor quality work and more bad reviews.
Secondly, negative reviews can make it harder for your business to recruit and hire talented employees. Nowadays, it seems most prospective employees research companies before applying for positions. Negative reviews are likely to discourage the best from applying. Your business pays with increased hiring costs and chronic understaffing, which leads to poor employee retention.
How Can You Create Happy, Loyal Customers?
While the cost of negative reviews and unhappy customers is significant, the news isn’t all bad. According to Gallup’s research many customers who switched brands admit that the company they left could have prevented it with a bit of effort.
To create truly happy customers and avoid these losses, you just can’t ignore unhappy customers. Be sure to:
- Put customers first. A customer-centric approach is crucial to satisfaction. Whenever making technology, policy or process decisions, always consider the customer first.
- Create consistent customer experiences across all channels and departments. Focusing on a consistent customer experience will help to establish your brand identity and eliminate customer confusion and frustration.
- Know their journey and resolve their pain points. Conducting customer experience journey mapping exercises and using the data uncovered during those exercises can streamline interactions and eliminate roadblocks.
- Personalize interactions to customers’ specific preferences, expectations and needs. Using personalization technology to gather customer preference data and adjust interactions to be personal and 1:1 in nature helps customers feel valued.
- Empower customers to resolve issues independently. Arming customers with self-service tools help to alleviate some common pain points and points of irritation.
- Routinely solicit and react to feedback. The more you listen to your customers, the better you’ll be able to plan for future CX improvements.
Good News: Responding to Unhappy Customers Can Help Boost Loyalty
There’s more good news. Studies have shown that, while satisfied customers become loyal customers, some of the most loyal customers are those who perceived a problem and then saw the problem fixed well by a business. By responding to your customers’ pain points, it’s possible—not just to prevent losses—but to turn these customers into even more loyal advocates for your brand in the future.