Much of customer alienation and sabotage behavior, both B2B andB2C, has been spawned by frustration and disappointment over serviceand product experiences, and the feeling that brands and companiesdon’t share their customers’ concerns, leaving them unheard. Poorcustomer service experience is often the breeding ground for negativecommunication. According to providers and customers, the qualityand competence of service agents, along with their ability to addresscustomer concerns on the first phone call or e-mail, rank as thetwo most important factors in delivering a superior, differentiatedservice experience. When these are delivered in a reactive, less-than-competent or even unqualified manner, the potential for negative post-experience communication is set in motion.Customers today are looking to benchmark their experiences againstthe greater sophistication of Web 2.0 technologies, and they arecoming to expect multi-channel support and an integrated experience.Companies have failed to keep pace with these expectations due topoor customer segmentation and last-generation loyalty metrics,underinvestment in, or poor design of, technology solutions, silo-based organizational structures, and poorly designed processes andagent training. What customers actually want, and what companiesneed to deliver, is trust, i.e. a perception that service processes andtechnologies are designed to optimize their relationship with thecompany and provide value.Even more serious, in its 2008 customer experience study, customerservice software company RightNow Technologies learned that 84%of customers who experienced poor service would communicate thatresult to others (up from 74% in 2007 and 57% in 2006); and 87%said they stopped doing business with a company because of a negativeservice experience.The dynamics of expression, both positive and negative, saw a majorchange with the rise of the Internet. Initially, people went to websites to conduct their own research on brands, products, services,and organizations. Before too long, web sites like Amazon and Ebagswere offering online customers the opportunity to rate products andservices that they bought and used; and customers were also ableto conduct pricing and performance comparisons, and also to offeropinions on their own experiences.
One key result of this online information accessibility was the realization that customers now had significantly more influence and power over product and service choice behavior (their own as well as the behavior of others) than ever before. In fact, the pendulum for B2B and B2C customer decision-making influence had shifted away from the companies. Consumers owned the influence and could now endorse or criticize companies, and their products and services, both offline and through online virtual soapboxes, such as contra web sites, podcasts, blogs and communities. And, as will also be discussed in this chapter, sabotaging employees used many of these same online media to virally undermine their employers.Potential Business Impact of Negative Word-of-Mouth Studies conducted by academics and research organizations around the world have determined that negative social word of mouth, though less frequent than positive word of mouth, is at least as impactful on brand choice. For example, a 2006 retail customer study among close to 1,200 adult shoppers by University of Pennsylvania’s Wharton School and The Verde Group, a Toronto consulting company, showed that of those experiencing problems, only 6% contacted the company (in part because 46% of those who had a problem felt they would experience the same issue in the future), 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.
Further, the study found that of 100 dissatisfied customers, a retailer would lose between 32 and 36 current or potential customers. Companies, as a result, will need to monitor all negative communication, whether it appears online or offline, and take steps to manage it. Otherwise, they can see financial consequences such as appear in the figure below. Negative Customer Behavior Can Be ExpensiveLost Customer $2400 ONE unhappy customer who spends $200/month revenue lost/yearLost Business Due to Negative Word of Mouth ONE unhappy customer 1 ONE unhappy customer tells on average 11 other people 11 Add: these 11 people each tell 5 others 55 Total Number of People Now Negative 67 Less: Assume 25% of those 66 people will not do business with you 17 Amount of lost opportunity from 17 people who spend $200/month $40,800 revenue lost/yearTotal Business Forfeited $43,200 revenue lost/year Due to ONE lost customer and associated negative brand perceptionand communication $432,000 revenue lost over 10 years In Market Probe’s 2010 Retail Bank Customer Advocacy Monitor, of the fifteen national and major regional banks studied, it was found that the best-performing banks had about three times the level of customer advocacy as the worst-performing banks: Bank #1 37% Bank #2 35% Bank #3 27% Bank #4 27% Bank #5 25% Bank #6 25% Bank #7 24% Bank #8 23% Bank #9 23% Bank #10 22% Bank #11 22% Bank #12 19% Bank #13 18% Bank #14 13% Bank #15 11%
Study results also generated multiple key financial advantages ofcustomer advocacy, such as the fact that 50% of bank customeradvocates were likely to consider new products from their primarybank, compared to only 5% among alienated customers.What wasn’t presented as actively at the time was the fact that theworst-performing banks had customer alienation levels of 23% to25%, compared to only 10% for the best-performing banks. Alienatedcustomers reported having very little interaction with their primarybank, and much of the interaction they did have tended to be negative.They encountered problems, or had complaints, at rates almostten times that of advocates (49% to 5%, most of which were eitherunsatisfactorily resolved or not resolved at all). Perhaps most telling,only 11% of the alienated bank customers said they had 50%, or more,of their investible assets at their primary bank, compared to 28% of thecustomers who were identified as advocates.Figures like these will get the attention of anyone in marketing,customer service, sales, or corporate management. Negative word-of-mouth, a principal component of alienated advocacy, can havepowerful bottom line impact. This plays out, for instance, in furtherstudy results of Wharton School and The Verde Group. In addition tothe negative communication resulting from bad experiences, almosthalf of those surveyed (48%) said they have avoided a store afterlearning of someone else’s problems there. For those who had had aproblem themselves, about one third said they would ‘definitely not’ or‘probably not’ return; and half felt they would probably experience thesame problem or problems in the future.Toyota Motor Corporation directly experienced the consequencesof poor, and reactive, communication following the parade of recalls(over 8.5 million vehicles, worldwide) and public airing of its qualityproblems (accelerator gas pedals and braking systems) during 2009.This included a 1 percent share decline of the U.S. market (to16.45%, according to Edmonds); and Kelley Blue Book stated thatToyota’s resale value had declined $200 to $500, for those models thatwere recalled (a decline of 1% to 3%). A 2010 U.S. national qualityperception study among prospective buyers showed that Toyota hadfallen to 7th position among 36 brands, from 2nd position in 2009. Inthe meantime, Ford has moved to 6th position in quality perception,and has moved into second place in U.S. market share, at 16.57%of the market (behind General Motors’ 18.12%), as identified byEdmonds’ research.
Advocacy and Alienation Buzz It should be understood that companies can be criticized – both online and offline – very quickly after a customer endures what is perceived as a negative experience. In Weber Shandwick’s 2007 study, The New Wave of Advocacy, one of the key findings was that, on average, nearly one out of two adults (45%) will express their dissatisfaction within one week, or less, after the experience. This is particularly important because, in the same study, Weber Shandwick found that, globally, 63% of consumers were making brand, product, and service decisions more quickly than a few years ago, with the U.S. consumers taking slightly longer. This puts more pressure on companies to monitor buzz and be prepared with measures to either quickly counter or leverage it, depending on its negative or positive nature. As an example of the impact of viral communications speed, in mid- November, 2010, a Qantas pilot safely landed a jet in Asia, after an engine had caught on fire. Close to 500 passengers were on board. Unlike the story of the ‘miracle on the Hudson’ in 2009, when US Airways pilot Chesley “Sully” Sullenberger gained fame after landing his A320 in the river on the west side of Manhattan, Qantas didn’t begin getting its story out for 12 to 18 hours after the incident. This wasn’t enough time to overtake the negative reports on Twitter that there had been a crash; and Qantas was forced into damage control rather than basking in the glory it really deserved.The Internet as Customer Alienation and Sabotage Enabler Although the majority of influence of B2B and B2C purchase and relationship decision influence continues to come from offline informal sources, the Internet has had an undeniable, pivotal role in creating, or undermining, consumer trust. For example the 2010 Decision Influence Index, an international study co-generated by Fleishman- Hillard and Harris Interactive, showed that, in some countries, consumers trust the Internet more than friends, family and print media. This study, conducted in France, Germany, the United Kingdom, Canada, China, Japan, and the United States (representing 48% of the global online population), found that the Internet is becoming a critical medium for decision-making support, in addition to being a reliable research and communication tool. Internet users will tend to look at many sources – search engines, corporate sites, blogs, review sites, chat rooms and forums, online communities, etc. - when seeking information, suggesting that truth and trust come as a result of distilling material from multiple locations and perspectives.
The Decision Influence Index study found that, while there is someconcern about too much information sharing on the Internet (by aboutone-fifth of Internet users), consumers generally are able to find blogs,sites, and boards that are credible and linked to their interest. Anaverage of 39% believe it is safe to communicate with others online, ortwice the rate of those who expressed concern about this.Note: It must be recognized that, for those seeking information online,or communicating themselves, the lack of authentication and validationof individuals on social networking sites can be an issue. For example,in 2008, two researchers successfully impersonated Marcus Ranum, asecurity expert, on LinkedIn (who did not have his own profile there).Within 12 hours, they had 42 connections to the phony profile, andthen joined several LinkedIn security networking communities to buildcredibility. Connection requests came in from the CSO of a securityfirm, then a former CSO of a Fortune 100 company, and Ranum’s ownsister! The point here is that social networking sites like LinkedIn,MySpace, Facebook, Plaxo, and HighFive are all vulnerable, becausethey are open, ‘blind trust’ social networking sites.There is a tendency for Internet users to use multiple sources ofinformation – credibility and trust in information is largely a functionof the ability to locate and retrieve information from a variety oftrustworthy sources, and cross-check among them. They placestrong trust in conversations with people they know, and they are alsorelatively trusting of comments posted by others. However, thoughthe information may not be completely reliable, users will referencepostings from others when making a decision. As an example, only21% of Internet users in the U.S. trust the comments of others, but46% find the comments useful. This pattern – the gap between trustand usefulness – is also seen in Germany, France, and Canada.Many of these comments occur on blogs and microblogs.Microblogging, on sites such as Twitter, has high awareness as an onlinecommunications medium (78%), and the Decision Influence Studyfound that one-third of aware consumers have a microblog account.When making purchasing decisions, an average of 64% of internetusers in the study consider online research to be either essential or veryimportant in making decisions. Though most users said the Internethelped by giving them information to compare options, finding adviceor support from other people, acting faster, saving money, and actingwith more confidence were also prominently cited. Search engineswere most frequently cited as a starting point; but decision aids onsome products, such as those for children and packaged goods, wereoften from comments given by other people (about 70%). Othersources actively referenced were blogs and social networks, as well ascompany-sponsored web sites and product/price comparison sites.
Overall, close to 40% of study respondents felt the Internet would become more important and influential as a communication over the next several years. In China, this opinion was given by 85% of Internet users. Certainly, in all countries included in the research, consumers are already spending an average of 12 to 15 hours per week on the Internet, about as much time as they spend watching television (except for China, where hours on the Internet were twice as high as watching television). Excluding email, a key study finding was that the Internet has been growing as a recognized information source, rapidly catching up to offline advice from friends, family, and colleagues; and it also dramatically overshadowed information received through mass electronic and print media. For example: • In the U.S., 42% of those using the B2C do not read magazines and 40% do not read a printed newspaper. • In Canada, 42% of those using the B2C do not read magazines and 28% do not read a printed newspaper. • In the U.K, 36% of those using the B2C do not read magazines and 33% do not read a printed newspaper. These results were similar for France, Japan, and Germany. While few Chinese Internet users did not read magazines or newspapers, the Chinese are much more active and advanced users, particularly in mobile communication (although much of informal peer-to-peer communication in China continues to be both local and offline).The Future of Customer Alienation and Sabotage Open access and freedom of speech on the Internet has bred "reputation snipers", individuals who will set up contra web sites, post webcasts on YouTube, and give extremely negative ratings and reasons. The root causes of what can cause them to act with powerful emotion-based messaging can typically be found in poor product or service experiences, or undesirable outcome of a registered problem or complaint. Increasingly, companies have to proactively monitor and prepare for brand perception and image attacks which can create negative advocacy (alienation and sabotage) within the customer base and among potential customers and the general public as well.
One fact is growing obvious, the Internet will make protecting andmanaging reputations exponentially more challenging. As noted byTechCrunch’s Michael Arrington, in an early 2010 blog post: “Trying to control, or even manage, your online reputation is becoming increasingly difﬁcult. And much like the ﬁght by big labels against the illegal sharing of music, it will soon become pointless to even try.The skeletons are coming out of the closet and onto the front porch. We’ll look back on the good old days when your reputation was really only on the line with eBay via conﬁrmed, actual transactions and LinkedIn, where you can simply reject anyone who leaves bad feedback on your professional life. Today we have quick ﬁre and semi or completely anonymous attacks on people, brands, businesses and just about everything else. And it is becoming increasingly ﬁndable on the search engines.Twitter,Yelp, Facebook, etc. are the new printing presses, and absolutely everyone, even the random wingnuts, have access.”In sum, companies would be wise to give as much attention to thepower of customer alienation and sabotage as they do to leveragingcustomer advocacy behavior.