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When Word-of-Mouth Goes South

December 12, 2008  

Let's say you've gotten into a culinary rut—always going to the same few restaurants—and want to try something new. You visit a site like Yelp.com to see what customers think about various eateries in your neighborhood, and discover that some have uniformly positive feedback. One glowing review after the next raves about the chef's inventiveness or the waitstaff's attentive service. You're impressed enough to bookmark these restaurants; while you won't race to each and every one this week, you'll probably get to them all eventually.

But if a restaurant's reviews skew negative, with complaints about poor food quality, indifferent hygiene or bad customer service, you'll likely decide that there's no need to see if they're wrong—ever.

This difference explains why executives place such emphasis on keeping negative word-of-mouth to a minimum, and why their concern is not misplaced. According to Denise Shiffman of the Engage Daily Blog, a London School of Economics study found that, "Every 1% reduction in negative word of mouth [sic] correlated to .41% growth, while a 1% increase in positive word of mouth [sic] correlated to just .14% growth. In other words, reducing negative comments could grow revenue by 300% over increasing positive comments."

While you might be tempted to clamp down on negative word-of-mouth, Denise Shiffman recommends combating bad press with a measured, open response to vocal complaints, as well as implementing processes that facilitate resolution before unhappy customers broadcast their displeasure in public.


The Po!nt: "The bottom line," says Shiffman, "[is to] monitor what's said about your brands online and enact a plan to reduce negative comments."

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