Why Positive Word-of-Mouth is Insanely Powerful

by Jeannie Walters

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What do you think when someone tells you about something that’s “gone viral?”

These days, your first thought may be Covid-19, but going viral is still a surprisingly common way of describing a funny video, cringe-worthy comment, or parody of the latest topic in the zeitgeist that gains mass popularity.

I don’t know about you, but I don’t think of customer experience as a recipe for going viral. Cat videos? Absolutely. Great customer service? Not so much.

That’s why I find some of the latest data on what drives negative and positive word-of-mouth publicity so compelling for customer experience leaders like you.

It’s our role within the organization to offer exceptional, word-of-mouth (WOM) experiences for our customers. And whether we deliver an amazing experience or an awful one, there is equal opportunity to go viral.

 

We humans are emotional, irrational and often irate!

Misery loves company, and it’s become common to lean on the idea customers will share negative experiences more often and to a wider audience than positive experiences.

But here is the issue with statistics – they get old quickly, and once they are quoted they are hard to ignore. Have you seen this one yet?

News of bad customer service reaches more than twice as many ears as praise for a good service experience.
Source: the White House Office of Consumer Affairs via Help Scout 

How about this one?

A dissatisfied customer will tell 9-15 people about it. And approximately 13% of your dissatisfied customers will tell more than 20 people about their problem.
Source: the White House Office of Consumer Affairs via CSM

Wow! Those are compelling!

But as I searched for the original quotes, I was stumped.

There doesn’t seem to be a site for the White House Office of Consumer Affairs. The quotes surely came from somewhere, but seem to be at least four years old.

So I did some more investigating to find more current data about how customers share experience both good and bad.

Here are some stats that deserve attention:

Replyco’s 32 Customer Service Facts You Can’t Afford to Ignore  is well-researched and full of interesting facts about how customer service affects both our customers and our organizations. Here are a few that stood out to me when it comes to word-of-mouth:

1. Obtaining new customers costs significantly more than retaining existing ones.

According to the Harvard Business Review, selling to new customers is between 5 and 25 times more expensive than existing customers — mostly because of the resources required to attract and obtain new customers.

This means that dedicating fewer resources to new customer sales — and funneling those resources toward exceeding existing customer expectations — can save your company money while making it more efficient.

2. Better customer service means higher revenues

In further support of the previous point, a recent study by Bain & Company concluded that companies delivering better customer service earn revenues between 4% and 8% above their market’s average.

They also found that improving customer retention by 5% can lead to a 25% to 95% profit increase.

3. Positive CX Leads to more recommendations

A report from The Temkin Group states that as many as 77% of respondents report recommending brands to friends after just one positive customer experience.

4. Negative customer experiences get people talking too

According to a study from American Express, happy US shoppers will share their good experience with approximately 11 people, while angry customers will share their bad experience with around 15 people.

Check out Replyco’s full article for more stats.

The bottom line: referred customers mean more to your company.

  • Referred customers are more loyal and less likely to leave you.
  • Referred customers spend more throughout their relationship with you.
  • Referred customers require less capital to obtain.
  • AND referred customers refer more new customers themselves.

So…what are you waiting for?

A better customer experience is not only good for your word-of-mouth marketing, it’s good for attracting the very best customers to your brand.

And who knows? Maybe you’ll be a viral sensation. But it might help to make a cat video. Cats will always be viral.

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Jeannie Walters

Jeannie Walters is the CEO/Founder of Experience Investigators, a global Customer Experience consulting firm. She has 20 years of experience helping companies improve loyalty and retention, employee engagement, and overall customer experience.

Jeannie is a Certified Customer Experience Professional (CCXP,) a charter member of the Customer Experience Professionals Association (CXPA,) a Professional Member of the National Speakers Association, a Forbes Coaches Council Member, a C-Suite Network Advisor, a LinkedIn Learning and Lynda.com instructor, and a TEDx speaker.

Learn more here.

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