As a business owner or shareholder, has your business ever been the victim of negative social media from some of your customers? What is the cost to my business from lost revenue or referrals? Is there a way to easily capture issues at the time of occurrence and resolve them with the customer in a timely way to avoid this from happening?
If you have experienced any of these situations or had questions with regard to the impact, we have some data and information below to help you avoid the impact or loss.
Impact of negative social media, using data:
There are many great articles posted to explain the cost and impact.
An article written by Dawn Wittington in Business social media indicates,“Research shows that negative reviews have become the #1 factor in consumers forming a bad opinion about a product or service. Statistically, 9 out of 10 consumers base purchase decisions on reviews, and 80% of those buyers will change their purchasing decision based on negative evaluations. The simple fact is, negative reviews affect the judgement and decisions of buyers. With two-thirds of consumers sharing their experiences and opinions on social media, recent data shows that only 14% of consumers will even consider buying from a business with 2 stars or less, and 19% will not buy from a business at all after reading just 1 negative review.”
On average, a single negative online review will cost you 30 customers, according to a 2009 Convergys Corp. study.
We know that one negative review will cost the company a total of 30 potential customers. This means that if a customer spends, on average, $200 with your business on a single visit then you are losing $6000 a year for every negative review of the company.
Now, that might not sound like too much, but we can look at it another way. If you have return customers for your businesses, then the losses can be even more staggering. That same loss of 30 potential customers because of one negative review is made even worse if a customer spends, on average, $8000 over their lifetime at your business. One negative review has such a long-lasting impact that your company will be losing a lifetime income of $240,000 for every negative review.
This means that companies, especially small businesses, need to take a proactive approach to negative customer feedback. If people feel like their comments are not being heard, they are significantly less likely to change their opinion, and at times can become even more vocal. The 2011 Harris Customer Experience Impact Report showed that 50 percent of customers give brands a week to respond to a question before they stop doing business with them.
Another article by Mary Shulzhenko, October 12, 2017, The Real Cost of Losing Customers due to Poor Customer Service.
The cost of losing customers differs wildly between businesses, but it gets even higher if a customer is lost due to poor customer service experiences. No doubt, customer service has a long-term impact on buying decisions, with customers continuing to avoid companies’ years after the initial negative interaction.
But what’s more, social media and online review websites enable bad service stories to be shared not only with family, friends or colleagues, but also with the general public affecting other potential customers. Which definitely means future lost sales for businesses, because:
- 95% of customers share bad experiences with others, 54% share bad experiences with 5+ people, 45% share negative reviews on social media.
- 63% of consumers read negative reviews on social media.
- 88% of customers trust online reviews as much as they trust friends.
- A single negative online review can cost the average business an average loss of 30 customers.
So, what can help you mitigate this from happening in your business and give you an edge on the competition?
Our team at RavenCSI is dedicated to provide a full-service customer data collection system, by providing business owners with an easy to use survey vehicle and capture the voice of the customer real-time, at the time the customer had the experience; which will alert a manager to respond within 10-15 seconds; and it is something you control as the business owner, it is not left to other sites to influence how customers view your services or products.
We realize you are busy and do not need another software to manage, so we do the work for you. We will help with all aspects of building a method of capturing your customers experiences and their feedback, including assisting with understanding the trends and data to improve your systems and processes. Our team’s foundation is built on solving difficult business problems for the last time.
Contact us now for a short demo to help you mitigate the impact of negative social media!