The Impact of Social Media and Online Recommendations

by Diane Berenbaum

Marketing is no longer in a company’s control. Organizations have much less influence on their brand perception due to the multitude of ways customers can share their viewpoints online.  According to Melanie Ingrey, research director of Nielsen’s online division, the number of consumers engaging with companies via social media is up from 23% in 2008 to 38% in 2009.

And what they are saying is not always very positive. 

With social media, customers can speak their minds and say how they really feel about your products and services.  And they are taking advantage of it:  Research shows that 1 in 5 people lash out negatively about a brand or product online.

How much can a negative comment hurt?  A lot more than you might think*:

  • Nearly half of consumers report that they always or often use an online posting or blog to get others’ opinions about a company’s customer service reputation.  And they give greater credence to the negative reviews than the positive ones (57% and 48% respectively).

  • 78% of those online trust recommendations from complete strangers more than they do the company’s marketing efforts.

  • One negative review or comment on Twitter, YouTube or Facebook can cost a company about 30 customers.  Each comment on these sites reaches an average of 45 people; and two-thirds of these individuals would either avoid the brand or stop doing business entirely with a company with a bad review.

  • Customer expectations for service quality are rising…they reward the ones who deliver and damage the reputation of those who don’t.  Organizations need to recognize that the quality of every single interaction is more crucial than ever before.  Now is the time to create a culture where consistently exceptional service is the norm.  Your brand and reputation are at stake.

     Euro RSCG Worldwide
     Convergys Corporation
     American Express Global Customer Service Barometer

Diane Berenbaum is a long-time contributor and former editor of the MAGIC Service Newsletter. She has more than twenty-five years of experience as a consultant, coach, and facilitator. Diane is the co-author of How to Talk to Customers: Create a Great Impression Every Time with MAGIC® .
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