Social web's customer loyalty impact turns viral

WM Circle Logo

By: Wise Marketer Staff |

Posted on September 18, 2009

Social web's customer loyalty impact turns viral

The consumer conversations taking place on the social web about poor customer experiences can negatively impact an organisations' bottom line and reputation, according to a survey commissioned by RightNow, investigating how Australian consumers want organisations to engage with them through web sites such as Twitter, YouTube and Facebook.

The study found that nearly one-quarter (23%) of online consumers have boycotted an organisation after reading a negative comment on the social web about how that organisation treats its customers. Of those boycotting organisations in this way, 42% said they had previously been a customer of the organisation.

The prolific use of social networks by consumers, and their willingness to create their own content, serves to compound the impact of negative customer experiences on a brand's reputation. Among the survey's main findings:

  • 18% of those polled said they had posted something about their poor customer experiences on Facebook;  
  • 11% have actually joined a group on Facebook opposed to the company in question;  
  • Many others have Twittered, blogged or found negative videos on YouTube about the company, and then shared those posts with friends and family;  
  • The top reason for taking these actions was to dissuade others from doing business with the organisation concerned.

While negative consumer-to-consumer (C2C) conversations or comments on the social web can have a detrimental effect on consumer spending, RightNow observed that there is also potential for companies to engage and interact with consumers in a positive way through the social web, to help foster brand loyalty and to turn 'badvocates' into advocates. For example:

  • 60% said that, if they posted a negative comment about an organisation on a social networking site, they would welcome contact from the organisation to try to resolve the issue;  
  • 66% said they would welcome contact from the organisation following a positive comment posting;  
  • 75% believe that companies should listen to what customers say about their products and services on social networking sites, and follow up with the people who posted those comments.

Similarly, for companies that are successfully engaging consumers on the social web, whether through direct dialogue or carefully executed advertising campaigns, there is still a significant opportunity to generate more sales:

  • 34% said they have seen a positive discussion about a company's products or service between consumers on the social web, and then visited that company's website and made a purchase as a result;  
  • 13% said they have had a dialogue with a company through the social web, and then made a purchase as a result;  
  • 51% said they have seen an advert on a social networking site, and clicked on it to reach the company's website. Half of those who clicked on such an advert then went on to make a purchase.

The study also asked consumers to identify the industries they were most likely to post a comment about on the social web, and whether their comment would be positive or negative:

  • Telcos received the highest number of comments (18%), and most negative commentary (71%);  
  • Travel & leisure companies are the most likely to receive positive comments (73%);  
  • Government agencies receive 8% of posted comments, but 63% of those are negative;  
  • Financial services companies receive 7%, with 62% being negative;  
  • Retailers gather 15% of posts, with 47% being positive and 36% being negative;  
  • Electronic goods sellers get 12%, of which 48% are positive and 35% are negative.

According to Brett Waters, RightNow's vice president for Asia Pacific South, "This serves as a warning for all organisations, both commercial and public, that ignoring the viral nature of the social web can harm both revenue and popularity. Consumers want interaction through these sites, but only when companies take a considered approach."

More Info: