Social Media Ratchets Up Risks from Angry Customers

Keep your customers happy, because they can ruin you in social networks, and fast.
Donna de WinterApril 15, 2015
Social Media Ratchets Up Risks from Angry Customers

For every unresolved negative experience a customer shares in social networks, it takes 12 positive experiences to get a company back to neutral with the public. Customer experiences shared countless times a day across a myriad of networks can reach more people than a Super Bowl ad. With mobile technologies they’re spreading farther and faster — especially when they’re negative.

Donna de Winter

Donna de Winter, CFO, Vision Critical

The U.S. consumer market represents $1.3 trillion worth of revenue up for grabs as customers switch allegiances, according to a report by Accenture. For brands interested in getting a piece of the pie and keeping it, brand loyalty is key. Yet 51% of customers claim that they’ve switched brand preferences due to poor experiences, Accenture said.

Even worse, 81% of those customers claim the switch could have been prevented if the situation had been better handled. In total, that adds up to $537 billion in annual costs to businesses due to unhappy customers. Yes, one company’s loss is another’s gain, but one thing is certain: angry customers come with a large price tag for all businesses.

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McDonald’s, for example, experienced one of its worst-performing years in 2014. Why? Because a wave of customers have abandoned fast food for more wholesome “fast casual” food. Pairing that trend with a series of food safety scandals in Asia was a recipe for a steep performance drop.

It was no shock that come January 2015, McDonald’s announced a new CEO and CFO. Soon after, company began to make real, public changes to its supply chain to meet customers’ demands for more-natural, less-processed foods. The move was a 180 from the company’s legacy tactics of investing heavily in marketing campaigns to combat public opinion.

McDonald’s is one of many case studies that show the influence of today’s customers. They must not be underestimated. According to SiriusDecisions, customers are two-thirds of the way to making their purchasing decisions before ever engaging directly with a brand or its sales representatives. People are self-educating — using the internet and turning to peers and reviews to access information and form their own opinions. As such, a simple hashtag can quickly snowball into a social-media nightmare.

So what’s a company to do to combat possible losses from angry customers? Successful companies figure out what underlies customer behavior and what motivates their anger.

Often they find that angry customers happen to be the ones who love a company the most and know its product the best. They’re angry because they hold the brand to a higher standard than others. The good news is that their anger is actually an opportunity in disguise. Complaints can be incredibly useful.

CFOs can quantify many aspects of business operations, from employee turnover to a data breach, but how can they put a value on someone’s emotions and reactions? Understanding the nuances of the kinds of costs that go hand in hand with an angry customer is the first step.

Here are some tips for better handling of angry customers:

Invest in diligence to gain context. Any time there’s a hostile customer, the first order of business is to acknowledge the customer’s concern and simultaneously figure out who the person is and what his relationship is like with the brand in question. Is this person’s entire Twitter feed filled with rants against various brands, or does he have 100,000 followers and seldom mention companies by name? Does this customer have a high lifetime value? Worse yet, is it a complaint from a respected New York Times editor who was inadvertently offended in some way? Quickly gaining context, either from publicly available information or from a company’s own CRM solution, is essential.

Engagement from authority is key. A common personal approach to online attacks is to not engage and let the situation die down. The opposite is best for companies. Don’t give a problem time to fester. Online attention spans are shorter than that of a goldfish. Swift acknowledgement and engagement are crucial to mitigating negative impact. A key to the response, however, is ensuring that the customer doesn’t feel like she’s talking to an anonymous intern. Websites like Twicsy that allow you to get more Instagram followers have become too powerful to leave in the hands of someone without some level of brand authority.

Seriously process customer feedback. Potentially expensive, but with significant rewards, processing customer feedback and applying it can be a game-changer for a business, especially when under scrutiny from unhappy customers. Usually a complaint involves a suggestion of how things might be done differently. No one knows a company’s products better than the customers that buy them — could they be right? This might mean investing in some consultancy work or forming an internal team to evaluate the root cause of the problem and see if there’s a solution to implement company-wide.

Invest in driving change. Listening to anger, considering its implications, and putting it in context doesn’t count if a business fails to act on key learnings. Once customer feedback is processed, companies should know enough to actually make real changes. Customer intelligence drives action, even as simple a fix as creating a protocol document outlining how to react to future angry customers of something as massive as a company rebrand.

People are gettiing better at using the web and social media to their advantage, which in some cases has proven to be an incredible amplifier of grievances when it comes to sites like Twitter and Facebook. It’s a dangerous time to be a business that doesn’t put its customers first and make a sincere effort to know and understand them.

But, it’s a great time to be a customer-centric business, because anger, by another name, is feedback — a view into customer wants and needs. Companies that get to know their customers, even the angry ones, have an opportunity to move forward toward success.

Donna de Winter is CFO of Vision Critical, which provides a cloud-based customer intelligence platform for companies to build engaged, secure communities of customers that offer real-time feedback and insight. 

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