I was in a hobby store yesterday buying model rocket engines (think venture scouts making jet propelled barbie cars). Anyway, I noticed a new restaurant had opened up in the same strip mall. While the attendant at the hobby store was ringing up my 24 rocket engines I asked him if he had tried out the new restaurant. His response:
Not sure that I heard correctly and a little taken back at the language I said, "Excuse me?" He went on to explain that he hadn't eaten there but a fellow worker had and she had been sick the rest of the day. He also said his manager had ordered a taco and it cost him six bucks and was no bigger than what you can get at Taco Bell. As he handed me my receipt he concluded emphatically once again, "It's [bleep!]" I thanked him and made my way to door once again marvelling at the power of word of mouth.
Think about what happened there. Put yourself in the position of the owner of the new restaurant that just invested multiple thousands of dollars and has been open now for just a few weeks. I doubt he or she has any idea that virtually right next door someone who has never even been in the restaurant is giving out negative recommendations (with neighbors like that who needs enemies...).
It gets worse, studies have shown that irritated customers are five times more likely to vent to a friend than a store rep and on average they will tell four friends. It doesn't say anything about how many people those four will tell, but here I am telling all of you. The study did report that those told about a friend's bad shopping experience are up to five times as likely to avoid the store in question as the original unhappy customer! (read about it here)
What's the solution? First, strive to make every customer experience remarkable. Right behind that has to be a system that consistently invites each customer to tell you how they felt about the experience.
With modern technology, there is no excuse for not inviting your customers to give you feedback. I recently rented a car from Enterprise. A week later I got a call asking how the experience was for me. Phone calls can be expensive, so use the internet. Set up an online survey and hand your customers a card directing them to the url to tell you what they think. Of course there is always the written feedback card. Just make sure you review the feedback regularly and respond to it. The only thing worse than not asking for feedback is asking for it and not responding.
Certainly not all of your customers will respond, but enough will to give you an accurate idea of how things are going and give you the opportunity to "save" a few that were about to tell their four friends who will now be five times as likely to avoid your business!