Guest Blog: How Much Does A Negative Review Hurt A Business?

This week on our Friends on Friday guest blog post my colleague, Michael Becker, talks about how negative reviews and poor customer service can impact your business. I believe a negative review, like any complaint, is an opportunity to show how good you are. – Shep Hyken

Ever wondered what the impact of a negative review is?

You’re almost ready to buy. But if you’re like 60-90% of people, you flip open your laptop and quickly search for “[company or product] reviews.” You see a few bad reviews, and suddenly are second guessing a purchase.

The world of company and product reviews sometimes seems like a lawless, unpoliced land of only the bad and the ugly. Bashing, trash talking, and criticisms are the rule, not the exception. People are eager to vent about negative experiences with others – they’re just waiting for that opportunity to do so. And many users hide behind the mask of online anonymity.

Negative customer service is often the root of a negative review. And a flurry of bad reviews can have detrimental effects on reputation and revenue.

The reality is that the majority of people look for reviews prior to purchase. Unfortunately, it only takes one minor slip up or bad service experience for customers to run rampant. And the vast majority (95%) of consumers share bad experiences with others.

Of course, most reasonable people understand that no company or product is without flaws. You shouldn’t get caught up in one or two bad reviews. The key is to look for trends. If you see multiple poor reviews on multiple different sites, then it’s time to take a look at more deep-seated issues like product functionality or service quality.

While businesses like to think they can regulate and monitor their brand reputation, customers most certainly define it – now more than ever.

Only about 1 in 20 people who have a bad customer experience will take the time to leave a review online. But that’s all it takes to do damage. When these start to add up, it can be like a ripple effect. Let’s say that over the course of a year, of the hundreds of thousands of interactions customers will have with a large consumer-facing company, 5,000 have a bad customer experience. On average, then, 250 are writing about their negative experience online!

The more negative reviews prospective customers are exposed to, the worse. Recent research by Moz found that a company risks losing:

• 22% of potential customers when a single negative review of your product, service or company is found
• 59% of potential customers when 3 negative reviews are found, and

• 70% of potential customers when 4 negative reviews are found

  Data source: Moz

Popular consumer-driven review sites like Yelp, TripAdvisor, Glassdoor, Yahoo!, and even Facebook and Twitter all allow open forums that make it easy for people to voice their opinions about experiences with a company:

In this case, one customer is frustrated with a long time on hold, and would prefer to engage with a customer service rep online – like web chat, email, or an online portal. On Twitter, especially, others are happy to jump in and offer their thoughts.

This brand lost this customer because she couldn’t figure out how to get in touch with someone to help.

According to the White House Office of Consumer Affairs, a bad customer service experience reaches more than 2x as many ears as praise for a positive one. Not good news for companies that lack an omnichannel customer service tool, a highly-trained team, and efficient processes.

More consumers are talking about their bad experiences, too. 58% of consumers are more likely to tell others about their customer service experiences than they were 5 years ago (Zendesk).

But it’s also clear that people do share good experiences. 1 happy customer will tell roughly 9 other people about their positive experience. And with the rising costs of acquiring new customers, it just makes good sense to let already happy customers do that for you.

It’s clear that the key to avoiding a harmful outbreak of negative reviews is to provide amazing customer service. Serving angry customers and resolving their issues efficiently is the best – and easiest – way to prevent bad reviews in the first place. It’s also crucial to make sure that you find a partner with the tools and guidance that can help your customer service agents be more efficient, better prepared, and more serviceable.

Michael Becker is a content strategist at Sharpen, a cloud-native contact center provider. He has experience in marketing for two SaaS companies and is passionate about the overall customer experience. He graduated from Butler University in 2014 with a B.A. in integrated communications and journalism. Connect on Twitter.

For more articles from Shep Hyken and his guest contributors go to customerserviceblog.com.

Read Shep’s latest Forbes Article: Customer Experience by Walking Around