Marketing Momentum

Sunday, March 19, 2006

How Damaging is Word of Mouth?

If you've ever wondered just how damaging negative word of mouth is, the Verde Group and Wharton School at the University of Pennsylvania recently released it's Customer Dissatisfaction Study. The study provides lots of good data and quantifies the importance of good customer service.

Key highlights:
  • More than 50% of Americans reported that a negative shopping experience of a friend or colleague deters them from shopping at a particular retailer.
  • As shopping problems are repeated, they often get embellished and become up to five times more damaging to customer retention than the initial negative shopping experience.
  • For every 100 American shoppers, 64 will be told about a store's poor products or services and no matter what that store does to entice shoppers -sales, promotions, advertising, marketing - they will not shop at that store.
  • Dissatisfied shoppers are five times more likely to tell a friend about their experience than contact the company.
  • Top problems include timeliness, merchandising, and front line staff.
  • The bigger the store, the more likely poor customer service.
  • Department stores and mass merchandisers have more customer service problems related to time and accessibility.



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