Everyone Makes Mistakes: Admit It, Fix It and Move On...or Move Over.

Is the customer always right?

Individually, perhaps not. However, collectively, their opinions matter and the direction of a business is ultimately determined by them. So right or wrong, they hold the power to make or break an organization. When customers have good experiences organizations can be assured of repeat business, brand ambassadors, positive word-of-mouth advertising, in other words, success. On the other hand, if customers' needs are not met, the consequences can be costly for any business (and, in turn, lucrative for their competitor).

With the advent of online retail, customers have the option of choosing the competition anywhere in the world. So before risking the loss of a customer, businesses need to address their mistakes immediately, before negative reviews hit their social media site.

"99% of consumers find that their expectations are not always met, 
89% of consumers will immediately take their business to your competitor after an unsatisfactory experience with your company, and 
25% of those surveyed will hop onto the social media of their choice to post about their dissatisfaction."

(2011 Customer Experience Impact Report, Oracle)

We've already learned from Li and Bernoff that 'talking' is the most common social media tactic utilized by businesses. The goal here is to gain awareness for the brand by starting a conversation with (and within) the customer base. Facebook, Twitter, YouTube or Blogs, are all ways to begin conversations.
Once the conversation is started, it is time to focus on 'energizing' that customer base to create buzz around products, services, brand or company using a system of ratings and reviews.

Li and Bernoff point out a perfect example of this in Chapter 7 of their book Groundswell, with the case of Jim Noble and his luggage. Jim's luggage fell apart while traveling. He expressed his dissatisfaction in a post on the manufacturer/retailer, eBags, website. To Jim’s surprise, the company immediately responded, and worked with Jim to solve the problem, thus his 180 degree turn from an unsatisfied customer to, not only a repeat customer, but a supporter, promoter, and marketer of their products through their social media channels.

“word of mouth is the most honest form of marketing,

building upon people's natural desire to share their experiences

with family, friends, and colleagues."

(Li and Bernoff, p. 131)

When having to make decisions about product purchasing, people want feedback from others about those products (as seen in Fig. 7-1, Li and Bernoff). In the case of eBags, Jim became an enthusiast for the company, helping them to become even more successful. Customers will post positive and negative reviews about the companies and their products, but both are extremely useful in the success of that company.

Li and Bernoff point out that almost 80% of feedback is positive while the remainder is negative. However, this negative information is necessary in order to build and 'maintain the credibility of the site' and the content of their reviews. The power in this approach is that peer referrals are big business. Friends, family, and colleagues' opinions are more believable and trustworthy than sales/marketing information, it is self-reinforcing as more people praise a brand's products, and it is self-spreading. In essence, when businesses find their fans, they can empower them to sell for them.

Providing a place for customers to rant and rave is a necessary tool to employ if organizations are going to engage, support and connect with the groundswell. And when they rave, they should be somehow rewarded--coupons, discounts, specials.

However, if they are ranting they need to be provided support to turn them into satisfied, repeat customers. 

Trying to keep the customer satisfied can get costly.

How costly could it be? For United Airlines...a whopping $180 million!
How so?

In 2008, flying United Airlines,  Dave Carroll's $3,500 Taylor guitar was destroyed by baggage handlers. Carroll made numerous attempts to be reimbursed by United for his loss, all were denied.

A songwriter by profession, Dave took his talents and $150 and created 'United Breaks Guitars,' a video he posted on YouTube. It instantly went viral. Within the first four days, there were already one million views. United's stock plummeted ten percent...a value of $180 million.

United finally relented. But look at what it cost them!

It’s no longer okay to sit back and watch others participate, now brands must listen to and engage with the groundswell in order to get its attention and help influence the conversation.

Connected consumers simply will not accept brands that aren’t participating, aren’t listening, or aren’t responding to them in real time. And when faced with with the choice of choosing the alternative, if the competition is doing it right, consumers will not hesitate to move on.

(reading response #2)