Denise Shiffman’s Engage Daily Blog

Scott McNealy (Sun Microsystems’ chairman) used to say that any press is good press. I doubt he sticks by that today. Bad news has a long half life in the era of Web 2.0.

What concerns CEOs at this moment is a wealth of online comments, product reviews and blog posts from their customers. Word of mouth has replaced mainstream press and what customers say matters.

Understanding customer loyalty (or lack there of) isn’t a new discipline. It has however changed. Today, customer sentiment is public and executives want to know what to do about negative comments.

When Fred Reichheld introduced us to Net Promoter Scores it gave businesses a straightforward way to measure brand equity and brand loyalty. And it helped companies to understand that all employees can impact the customer’s experience. But most companies focus on how to make service better, and how to increase positive word of mouth. When in fact, it’s more important to decrease the number of negative comments.

A few years ago, the London School of Economics viewed Net Promoter from the other side of the fence. They measured negative word of mouth and it’s impact on the brand and product revenue.

What did they find? Every 1% reduction in negative word of mouth correlated to .41% growth, while a 1% increase in positive word of mouth correlated to just .14% growth. In other words, reducing negative comments could grow revenue by 300% over increasing positive comments.

The bottom line, monitor what’s said about your brands online and enact a plan to reduce negative comments. Dell has done it with IdeaStorm.com. Comcast is doing it with a simple (and free) Twitter feed (@comcastcares).

There are many tools available to monitor your customer comments (free and for a fee). Here are just a few:

Nielson BuzzMetrics
Radian6
Attensity
co.comments
Google alerts

Here are some thoughts on changing customer sentiment.

If your customer service team can help a customer in distress then they should contact that person directly (in an informal, personal voice).

Create an advocates program that highlights, informs and interacts with your most active and vocal users.

Start a blog or use your blog to talk openly about issues in the company or with the product that you’re fixing. Ask readers for their help and input.

Allow users to comment on, review, rate, and bookmark any content (including products) on your site.

Set up a process to evaluate comments found on the Web or on your site and escalate issues that can be resolved.

Incorporate learning in your marketing and product development.

Give recognition to users whose ideas are implemented.

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This entry was posted on Tuesday, October 21st, 2008 at 12:21 pm and is filed under Marketing fundamentals. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.