Negative shopping experiences and the influence of social media: The case for a customer recovery strategy

Introduction

Delivering quality customer service, keeping customers satisfied and resolving issues with disgruntled customers, has evolved. Dramatically. A decade ago, a disgruntled customer might have complained about your brand, products or service to several friends and relatives. Today, with social media, one dissatisfied customer can reach hundreds, if not thousands, of friends and followers with a negative post on Facebook, Twitter, Google+, YouTube or other social media sites. Such posts can be forwarded to hundreds of others, picked up by search engines, and displayed for the world to see. These negative comments can influence potential customers searching for your brand name or products that you offer for years to come. You can prevent customers from venting their complaints about your company on social media, recover at-risk customers and strengthen customer loyalty by implementing a proactive customer service strategy that includes accessible channels of communication that customers can use to resolve issues. By resolving issues quickly and effectively, you can also motivate customers to use social media to sing your praises.

Today, with social media, one dissatisfied customer can reach hundreds, if not thousands, of friends and followers with a negative post.

If you leave customers dissatisfied, your company could find itself serenaded on social media with a song like United Breaks Guitars¹, a catchy YouTube ditty about poor service and an unacceptable customer service response. The song has been seen by over 13 million visitors on YouTube. Even though the situation was eventually resolved, the song is still on display and has an indelible impact on United Airlines’ reputation. The viral nature of this song begs the question: Does your company have a customer service plan in place to convert disgruntled customers into satisfied ones before they complain on social media?

Executive Summary

People are talking to their friends, family and contacts about your company, brand, products and service. They are doing this in person and by posting messages online through Facebook, Twitter, blogs, review sites and many other places. The emergence of social media has changed the way that we communicate about, and perceive, the retailers we visit – or choose not to visit. It is more important than ever that retailers have a customer service strategy in place based on best practices. The customer service strategy should include training to ensure that staff know how to minimize service issues and should empower them to resolve or escalate problems up the chain of command for resolution. Beyond that, companies need to monitor customer service levels by actively soliciting feedback and they need to take appropriate action if customer service issues arise and are not resolved at the store level.

Issues You Don’t Know About

When it comes to customer service, many companies have issues, but don’t know about them. Only a slim majority of consumers (53%) who have had a negative retail experience contacted someone at the company with their concerns, according to Service Recovery In The Age of Social Media, a comprehensive customer service survey conducted by Leger². That means nearly the same proportion of customers did not speak to anyone at the company when they had service problems.

Only a slim majority of consumers (53%) who have had a negative retail experience contacted someone at the company with their concerns.

Many of those who did not contact the company simply moved on to competitors. This underscores the importance of managing customer complaints quickly and efficiently. It also highlights the importance of preventing customer service issues, monitoring satisfaction levels and encouraging reticent consumers to come forward with issues so that they can be resolved. Otherwise, unsatisfied consumer will voice their frustrations to friends and relatives, in person and through social media, and simply move on to what they perceive as greener pastures.

Why are Customers Dissatisfied?

Dissatisfaction with sales associates is the most common reason for negative customer service experiences. Customers frequently say that they had to deal with associates who are rude or who are not knowledgeable about the products they sell. In addition, customers may be dissatisfied with the products purchased, misleading ads or coupon redemption issues.

Of those customers who contacted the retailer about their negative experience, 60% were dissatisfied with the response they received, according to the Leger report.

So not only were they upset by in-store issues, they were then disappointed with the company’s response to their complaint. Is it any wonder, with this double whammy, that 44% of customers who had complaints stopped shopping at that retailer altogether? Not only are retailers losing customers, but they then need to spend time and money replacing them with new customers if they hope to maintain sales levels. That is why managing customer complaints quickly and effectively becomes critical to success. Having a method in place to help you determine when customers are upset, and a way to resolve their issues, will help you keep them as customers. And it will help prevent them from spreading
negative news about your brand.

Impact of social media on the brand

Most companies underestimate the impact of social media on their brand. People post comments about their customer service experience online, with an emphasis on negative and unresolved issues, while others are reading the comments and forming opinions. Customer service is the last frontier for consumers; price is no longer the only issue. According to a new report from Forrester³ customer experience is more powerful in driving customer loyalty than the perception of value received for a given price.

According to the Leger survey, when consumers have a negative retail experience, virtually all (97%) will share that experience with someone, including those who take to social media to share their frustrations. If you think nobody takes comments on social media seriously, think again: 54% of consumers said they are “more exposed to positive and negative experiences at retailers” than they used to be as a result of social media; 60% of social media users said a negative post about a product has deterred them from purchasing that product.

In addition, 22% of consumers say that they often repost their friends’ comments about experiences with retailers. In other words, if one disgruntled consumer reaches 100 friends, then 22 of those friends will repost the negative message, reaching 2,200 more friends, and 484 of those friends will repost the message, reaching 4,840 friends. You can see how bad news spreads exponentially. These numbers may be low, as 22% of social media users have 300 or more friends or followers on sites like Facebook and Twitter.

One bad customer experience can instantly go from an isolated incident to a viral firestorm that could do irreparable damage to a company and its brand.

The customer experience has become a defining metric for retailers as consumers as one bad customer experience can instantly go from an isolated incident to a viral firestorm that could do irreparable damage to a company and its brand. Ask any restaurant operator about their greatest fear and you’ll get the same response: negative guest feedback. All it takes is one long wait in line, one cold plate of food, one inconsiderate waiter, or one mistake on the bill and the word begins to spread, in person and across social media, undermining the foundations on which a successful brand is built.

At the same time, retailers can harness the power of social media if they meet and exceed customer expectations. 52% of social media users say that they have “shopped at a store as a result of somebody posting that they had a good experience with that particular retailer” and 45% of social media users have purchased a product as a result of seeing one of their friends “post something good about it.” With a customer service strategy in place, social media can work for retailers.

Best Practices Required

So how do you stop the negative news from spreading and ensure that positive news is posted? How do you recover at-risk customers and strengthen customer loyalty? You implement customer service best practices. When it comes to customer services best practices, your organization should implement a three-pronged strategy that includes training, listening and acting.

When it comes to customer services best practices, your organization should implement a three-pronged strategy that includes training, listening and acting.

Train

Companies train staff on how to use cash registers and take credit card and debit card payments. They generally train them about products offered. But how often do they formally train them in how to greet a customer, how to assess a customer’s needs, how to interact and, if need be, empathize with a customer, and how to resolve issues a customer may have. Few companies empower staff to resolve issues that may arise on the spot, let alone teach them how to determine if there is a problem. Granted, some issues may be too complex or costly to resolve on the spot. But do companies draw clear lines in the customer service sand demarking what frontline staff can and cannot deal with? And does training include an accessible escalation process that ensures a positive outcome?

For instance, how many frontline staff know what to do if a customer is leaving the store in a disgruntled state of mind? Do they know what steps to take to ensure the customer knows how to resolve the issue? How many have a formal customer complaint resolution document that they can give to the customer if the issue cannot be resolved in place? It goes without saying, training is the first step to ensure that problems do not arise, or are nipped in the bud when they do.

Listen

As the Leger survey noted, almost half of dissatisfied customers leave a business without lodging a complaint. Yet they will tell others, in person or through social media, about their problems. While many companies use customer satisfaction cards, few customers notice them or pause and to fill them out – even if they’ve had a negative experience.The perception with comment cards is that they are not read with any sense of urgency. And if the cards are filled out, it is often anonymously, leaving management no opportunity to resolve the problem with the customer directly.

Companies need to implement a proactive listening strategy at the store level, one that lets them effectively monitor service satisfaction and, when required, take action. In addition, companies should set up systems to monitor social media sites for brand mentions – for complaints or positive comments.

Act

Once companies have systems in place that enable them to listen to customers, they then need to act on what customers are saying. They need to respond to and resolve issues – at the store level through an active listening and escalation process. Or if acting on a complaint on social media, responses must be positive and constructive, with trained community managers and clear guidelines for engagement and escalation. The goal is to calmly and courteously move public online complaints to private communication quickly to minimize the
negative ripple effect.

As indicated, staff should be trained and empowered to resolve problems at the point of purchase so that disgruntled customers can be converted to satisfied ones. When issues are complex or costly, a company may decide that frontline staff should not call the shots. However, frontline staff should be trained to communicate the company’s formal resolution process to customers in a genuinely helpful and courteous way. The explanation should come complete with contact names, numbers, email addresses and websites. This will help reassure customers that someone with authority will be able to listen to and resolve their complaints.

Have a plan in place to resolve the issue.

Reaching out to customers who have had negative experiences at the store level improves brand equity; 69% of customers surveyed in the Leger report said such an option improved their opinion of the company. If a company resolves a negative experience, 37% of customers would post the outcome on social media. Suddenly, a potentially negative issue is converted into positive communication, turning detractors into brand ambassadors, simply because the company had a plan in place to resolve the issue.

How Léger Metrics Can Help

As indicated by the survey, many clients do not complain at the store. Often this is because they have low expectations about the company’s ability to resolve issues or they may simply dislike confrontation. Leger Metrics, one of North America’s leading suppliers of Customer Experience Management solutions, works closely with clients to design effective Voice of the Customer programs. Providing statistically reliable data and meaningful insight on key customer experiences, Leger Metrics allows retailers to act quickly to resolve issues throughout the organization.

An invitation to complete a satisfaction survey is displayed on the customer’s cash register receipt that they may complete online or by voice, even on their mobile phone. When they complete the survey privately, they are more likely to honestly communicate their feelings without risk of confrontation with frontline staff.

The Leger Metrics Customer Experience Management solution enables companies to monitor customer satisfaction levels by region, retail location and even staff member. More importantly, customers are prompted to identify themselves so that management can resolve issues immediately, recovering customers even after they have left the store. While satisfaction surveys will never replace effectively trained staff, such tools can help resolve issues before bad news is spread by word of mouth and social media.

Leger Metrics also provides a way for community managers on social media channels to track and centralize online complaints, even providing disgruntled customers with a link that will initiate an immediate follow-up by the appropriate manager. The issue, any action taken to resolve it, and the outcome will be included in the customer satisfaction reporting that Leger Metrics distributes to its clients.

Customers are prompted to identify themselves so that management can resolve issues immediately, recovering customers even after they have left the store.

For customers who report a positive experience, Leger Metrics provides a way for them to share their feedback and endorsement on their social networks. In addition to boosting the brand’s social network followers, positive posts support the 52% of people who report shopping at a store as a result of seeing a post about a positive experience.

Conclusion

Delivering a positive customer experience has always been important. In the era of social media, it is essential. To thrive and survive in a competitive marketplace, retailers must ensure that effective and efficient customer service solution processes are in place. They must train staff to deliver reliable service, leverage customer feedback, and quickly resolve issues that may arise. Customer experience management programs present opportunities for merchants to truly understand the satisfaction levels, wants and needs of their customers across a large organization, and to convert dissatisfied customers into brand ambassadors.

Sources

¹ United Breaks Guitars

² The survey was completed online with 1000 Canadian consumers using a random selection of respondents from Leger’s panel of more than 600,000 Canadians. The research was conducted in April of 2013.

³  “Banks and Retailers: You Cannot Price Your Way Out of Bad Customer Experiences,” surveyed of more than 7500 U.S. individuals that customer experience accounts for about 55 percent of customer loyalty to banks, and about 46 percent to retailers.

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