I listened to a story on NPR this afternoon about the negative impact of bad word-of-mouth, you can listen to it here. Very scary. This is part one of a two part story by Wendy Kaufman, hopefully the second part will bring out the positive aspects from good word-of-mouth.
The basis for the article comes from research by the Wharton School of Business. They found that 1 out of 2 customers has a customer service problem when they shop. Worse is the fact that they then tell friends, family, and colleagues about it and embellish the story in the retelling. The overall result is that 1/2 of those that hear the bad news story won't shop at those places they heard about. Ouch! Those that improve on the situation certainly create a business advantage.
It goes to show the need for businesses to hear from their customers, the bad news as well as the good. Hearing the bad news you can make efforts to correct the situation so that bad embellished stories won't be spread. You even have the opportunity to turn a detractor into a promoter. You can also get to the root cause and fix it to reduce future bad experiences.