While we are busy measuring the ROI of our marketing efforts, do we know exactly how much our bad customer service is costing us?
That's because 90% of first-time consumers read online reviews before visiting a business, according to a study conducted by Moz in 2016. Online reviews impact 67.7% of the total purchasing decisions. Moz also found that 84% of people tend to trust online reviews just as much as they trust personal recommendations.
Out of that, 74% of consumers say that more positive reviews make them trust a company or service more. The study also found out that every single star a business gets on Yelp, increases its rating and brings it a 5 to 9% increase in revenue. Yelp is a credible review site where 82% of Yelp users visit before they buy a product or service.
But of course, bad customer service can negatively affect a business. According to a research study, businesses, both big and small, are losing $62 billion annually because of poor customer service. Not only can it bring direct loss of business, poor customer service is more viral than good customer service leading to loss of potential business.
1. Consumers share their bad experiences
As mentioned earlier, the majority of the people look for reviews before purchasing a product or service. But most of the time, when customers experience bad behavior and careless, unresponsive customer service, they run rampant.
Of course, most reasonable people know and understand that no company, product or service is without flaws. Although you should not get caught up with a handful of bad reviews, if you find repeated poor reviews regarding a specific issue, then it is time to take a deeper look and see how you can work to improve and eliminate the roadblock.
2. Bad customer service can damage brand reputation online
Many businesses believe they can monitor and regulate their brand reputation online, but truth is, customers are in charge. With social media networks and review sites, companies are at the mercy of their customers.
According to Moz's study, 1 in 20 people who have a bad customer experience take the time to leave a negative review online. Just a single bad review, can open up a conversation, encourage others to open up about a similar experience, push away customers and repel potential ones.
3. Bad customer experience leads to losing potential customers
The more negative reviews you get, the less business you risk getting. The same study found that a company risks losing:
- 22% of its potential customers when there is just one single negative review of their product, service or company
- 59% of its potential customers when there are 3 or more negative reviews
- 70% of its potential customers when there are 4 or more negative reviews
As a result, it's best to not leave negative reviews unanswered. Act on the received complaints within your company and respond to negative comments to let them and others that are reading know that you do care about what your customers have to say.
4. Online review sites offer a platform for dissatisfied consumers
In the age of digital marketing, prospective customers rely more and more on consumer-driven review sites like TripAdvisor, Yelp, and Glassdoor just to name a few. To get a better grip on the conversation, offer open forums for people to voice their questions and opinions and have an active team of representatives involved in answering questions and solving problems publicly.
A study conducted by the White House Office of Consumer Affairs found out that a bad customer service experience has the potential to reach more than twice as many ears as praise for a review that is more positive. This means companies have to always be on their toes and work twice as hard to create positive customer experiences.
But positive experiences are also shared. 1 happy customer is likely to tell approximately 9 other people about the experience. Or work social media to your advantage and deliver a public, over the top experience to make the word of mouth viral.
5. Negative impact on business revenue
Negative online reviews take a heavy toll on your business. According to the latest statistics:
- Businesses risk losing 22% of business when potential customers find one negative article on the first page of their search results.
- Businesses that have two negative articles or links on the first page of search results risk losing 44% of their customers.
- If 3 negative articles pop up in a search query on Google's first page, this percentage of lost customers increases to over 59.2%.
- If a business has four or more negative links Google search results, then it is more likely to lose 70% of potential customers.
The majority of adults in the U.S. say they have Googled a company before doing business with them. 45% have agreed that their online search about the company has helped them decide not to do business with that person or company, whereas, 56% have found something online that solidified their decision to get in touch and do business with that person or company.
If bad customer stories can damage your business, good customer stories can grow your business...exponentially. Encourage satisfied and recurring customers to share their positive experiences and outweigh the negative.
How have you handled negative reviews about your company?