Last night I was listening to old story on NPR by Wendy Kaufman about negative impact of bad word of mouth. The basis for the article comes from research by the Wharton School of Business, where they found shoppers who experienced problems with a retailer, only 6% contacted the company, but 31% went on to tell friends and family. Of those, 8% told one person, 8% told two people, and 6% told six or more people. The study further found that out of 100 dissatisfied customers a retailer stands to lose between 32 and 36 current or potential customers.
Worse is the fact that they then tell friends, family, and colleagues about it and embellish the story in the retelling. The overall result is that 1/2 of those that hear the bad news story won’t shop at those places they heard about. Those that improve on the situation certainly create a business advantage.
The study truly illustrates the power of negative word of mouth and the retelling of stories. Indeed, and according to the study, “the complaints have an even greater impact on shoppers who were not directly involved as the story spreads and is embellished. Almost half those surveyed, 48%, reported they have avoided a store in the past because of someone else’s’ negative experience.”
