June 23, 2015

Marketing Chart: How a customer experience #fail affects brands

SUMMARY: United Airlines breaks guitars.

How do I know? Social media.

A viral video is an anecdotal example of customer response. In this Chart of the Week, we take a look at data from 947 customers to discover how social influencers react to customer experience failures.
by Daniel Burstein, Director of Editorial Content

In a survey of 947 customers, SDL asked customers about a customer experience failure with a business. The survey then asked …

After you kept doing business with (FAILNAME), which of the following best describes how you treated (FAILNAME) as a result of the failure?

Now, thinking about all of the different social networks you are a part of, how many individuals would you estimate you are connected to or follow in these networks?

View Chart Online

Click here to see a printable version of this chart

Social influencers are more likely to actively disparage brands that don’t serve customers …

This chart cross-tabulates the answers to the two questions listed above it, showing the average network size for groups that gave each reply to how they deal with a customer experience failure.

As you can see, customers with a bigger social footprint respond to failures more aggressively. The group that said, "I actively tried to disparage [the business that delivered a failed customer experience] every chance I got through social media and other online publishing channels" had an average social network of 1,560 — far more than any other group.

For a big brand, this can come at a major cost. For example, United Airlines spent $43.9 million in 2012 to advertise air travel, according to Kantar Media. It also spent significantly to sponsor the U.S. Olympic team at the Winter Olympics in Sochi two years later.

Much of that is feel-good branding. And yet, how much was that branding undercut by the now-famous "United Breaks Guitars" viral social media video? What if United had invested more in baggage handling to avoid that customer experience failure? What if its customer service staff had remedied the issue? The impact would not just have been on operational efficiency, but on the brand as well.

I’m not trying to only pick on one airline. No company is perfect. More on that in a bit. First, let’s take a deeper dive into discoveries from this research.

"Our recent research shows that consumers expect great experiences but are much more likely to remember negative experiences — and take them viral," Paige O’Neill, CMO, SDL, said. "Four out of five customers who leave the brand after a negative experience say they will never come back. With this is mind, brands need to make customer experience a priority."

… however, that is a small group

On the upside, those who actively disparage the brand on social media represent a small group. Only 2% responded in the survey that they actively disparaged the company on social media, while 36% were passive and did "Nothing. Went on as if nothing changed."

Yet, this small group can be the proverbial canary in the coal mine. Let’s take a look at why that is, and what we can learn from this data.

First, do no harm

The solution is an obvious one — don’t have customer experience failures. Of course, this is easier said than done. No organization is perfect.

Failures often arise from a misalignment between expectations and outcomes. As marketers, we help shape expectations.

One way to reduce customer experience failures is by making an honest promise with your marketing, advertising and website.

This should start by identifying an effective value proposition — a value prop that expresses the true value your products and services offer. A value prop should be compelling and engaging enough to attract customers, but also something your company can deliver on.

Ensure that your value prop is at the center of all customer communications.

It also means frequently evaluating the customer experience before a problem even happens. In fact, the data in the MarketingSherpa Ecommerce Benchmark Survey showed that customer-centric organizations are more successful.

But if you do, perhaps you should thank this vocal minority

Not all customer experience failures are due to an overpromise from marketing. Sometimes, something goes awry with even basic service. For example, United Airlines flies 16.6 million passengers every year. A few guitars are bound to break.

In those instances, don’t necessarily look at this active and influential social group as a bad thing. Here’s why.

While 36% of consumers said they would do nothing if a brand failed them, the majority of respondents were not so forgiving — 22% stopped recommending the brand, and 42% actively changed their habits (either started to look for competitors to buy from or disparaged the brand by word-of-mouth or through social media).

For these 64% of consumers who change their behavior, most of these changes are silent to you as a marketer.

The one exception to this silence is that crucial 2% who are voicing their concerns on social media. While it’s a small number, take them seriously because they are expressing the suffering that the silent majority is going through as well. They are providing valuable customer intelligence to your organization.

If you can learn from these active social media posters, you can improve the product and the customer experience, and reduce the likelihood of future failures that turn the silent majority off to your business.

Beyond gaining customer intelligence, you can use customer service to make things right for these individual social customers. This creates the opportunity for some positive social sharing from this group.

"To prevent a customer from leaving the brand, our research indicates the top steps that can help ... include offering a genuine and personal apology, admitting the failure and offering discounts [or] credits related to the failure," O’Neill said. "Technology can help by empowering all customer-facing employees with the right information about consumers so they can be knowledgeable and empowered to help solve problems, thus avoiding breakdowns in the experience."

Many companies are taking note. While conducting interviews in the MarketingSherpa Media Center at IRCE 2015, marketer after marketer told me about the importance of customer service and the new investment and focus their companies were placing in it.

For example, Joseph Jaconi, General Manager, Tech Armor, said "We really built our brand around service and support. We’re a small company, but over 60% of our human resources is dedicated to customer service and support … that’s including sales, marketing and everything we’re doing."

Now that’s putting your org chart where your mouth is.

Related Resources

Subscribe to MarketingSherpa Chart of the Week — Gain access to the data and discoveries to help you better serve customers and improve your marketing performance

Ecommerce Research Chart: Customer feedback and ecommerce success

An exceptional customer experience considers the full customer journey (by James Ainsworth on SDL’s theDigitalExperience blog)

Marketing Research Chart: Does a good customer experience really affect business success?

Live from IRCE 2015: The importance of handling customer reviews

United Breaks Guitars (Wikipedia description)

Value Proposition Development online course (from MarketingSherpa parent research organization, MECLABS Institute)

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