How Much is Negative Online Word of Mouth Costing Your Brand?



Most everyone knows that negative online Word of Mouth  -- critical online reviews, harsh comments in social networks and online forums --  is bad for your business and brand.

But the actual cost of negative online WOM may be dramatically higher than you think.

Our analysis shows that negative online WOM can cost a company an amount that's equal to about 25 percent of its total annual revenue.

In other words, the financial impact of negative online WOM for a company with $100 million in annual revenue may be $25 million a year or even more in cases when online WOM is especially hostile.

An Unhappy Customer Tells 5 People...Wait, Make that 5,000

Remember the old saying that an unhappy customer will tell five people about a negative experience with your company?

Thanks to the power of social media, it's time to update the old adage and make that 5,000 people.

And by the way, that's 5,000 people who were shopping for your product or service on Yelp, TripAdvisor, Amazon, or asking friends for recommendations on social networks.

The "Silent Sales Killer"

I call negative online WOM the "Silent Sales Killer" because rarely if ever will prospects contact you to say they decided to buy a competitors' product after reading complaints about your product.

They just take their business elsewhere.

And PS: they go out of their way to warn friends about your company and products. Ouch! More lost revenues.

How Does Negative Online WOM Affect Your Business?

Left unchecked, negative online WOM has many negative impacts on your business including:

  • Decreased sales and revenues
  • Decreased customer loyalty (customers churn out faster and in higher percentages)
  • Increased difficulty attracting and retaining employees
  • Increased difficulty attracting partners and investors
  • Lower market valuation and stock prices

How to Combat Negative Online WOM

Of course, you should respond consistently to negative reviews, posts, and Tweets. And it goes without saying that you need to identify and fix the issues that are causing customers to bash you online.

However, a critical key to fighting negative online WOM is to go on the offense. 

That means you need to have a systematic, pro-active program to identify, mobilize, and amplify your highly-satisfied customers and other defenders, i.e., your Advocates.

Mobilize & Amplify Your Advocates

Here are four powerful ways to activate your Advocates:

1. Enable and encourage your Advocates to post positive reviews, stories, testimonials, videos, photos, and other original content.

2. Make it easy for them to share positive news about your company and products.

3. Give them rewards for referring friends and peers.

4. Invite them to join an Advocate hub, where they can learn about ways to recommend and refer plus earn points, status, and badges.

When PC Mag named the new Neato Botvac Connected D7 an "Editor's Choice," Neato Robotics encouraged its Advocates to share the exciting news with friends.

When PC Mag named the new Neato Botvac Connected D7 an "Editor's Choice," Neato Robotics encouraged its Advocates to share the exciting news with friends.

Waiting Costs You $$$... So Why Wait?

Prospects are making decisions TODAY about whether to buy your product, enroll in your school, eat at your restaurant, or stay in your hotel.

These choices are being heavily influenced by what's online about you today.

So waiting to address negative online WOM is costing you money right now. More reason to get started now to launch a systematic WOM advocacy program.