Customer Research Shows Bad News Travels Fast

• Consumers have sounded a clear warning to brands in COLLOQUY’s latest research into the word-of-mouth (WOM) sharing practices of U.S. households: Bad news travels fast.
  
  Of 3,295 U.S. consumers surveyed by COLLOQUY, slightly more than one out of every four (26%) said they are far more likely to spread the word to family, friends and coworkers about a bad experience with a product or service than a good one. COLLOQUY, owned by LoyaltyOne, is a provider of loyalty marketing publishing, education and research.
  
  In a survey finding of equal significance, even among consumers who are most loyal to, engaged with and willing to recommend brands they like -- a group COLLOQUY calls WOM Champions -- 31% said they are far more likely to share information about a bad experience with a product or service than a good one.
  
  Among key demographic groups, Affluent consumers, at 30%, scored highest for saying they’re far more likely to spread a bad experience. Seniors scored the lowest at 19%. In the other demographics, 25% of Young Adults and 25% of Women said they’re far more likely to share a bad experience. Hispanics’ score was 21%.
  
  COLLOQUY experts have adopted a little known term, “Madvocates,” as an apt name for consumers predisposed to engage in negative WOM practices after suffering a bad experience. The corresponding attitude can be called “Madvocacy.”
  
  “Negative word of mouth is a function of the bad experience we all may have on occasion,” said COLLOQUY Managing Partner Kelly Hlavinka. “Rather than uncover a separate group of brand curmudgeons, we instead discovered an overlap of positive and negative stances found among all groups.

“It’s notable that the Madvocacy attitude is significantly more prevalent among word-of-mouth champions (31%) than the general population (26%),” Hlavinka added. “One lesson is clear, hell hath no fury like a champion scorned. Since Madvocacy is an attitude that nearly a third of all champions share and are willing to act upon, loyalty marketers must accept their responsibility for the impact their programs can have on generating both positive and negative word of mouth.”

COLLOQUY's WOM survey, featuring completed responses from 3,295 U.S. consumers nationwide, was conducted in December 2010. COLLOQUY will publish a white paper March 18, 2011, presenting the complete results of its latest WOM research. The paper will be available free of charge at www.colloquy.com/whitepapers. The Madvocacy findings released today represent a portion of those results. COLLOQUY previously published a 2009 study titled The New Champion Customers: Measuring Word-of-Mouth Activity Among Reward Program Members.

Other key Madvocacy findings include the following:

Just 7% of the general population are “Pure Madvocates” -- consumers who aren’t connected to brands and aren’t willing to advocate for them, but who are oriented to negative WOM.

75% of the general population said that when they’ve had a bad experience with a product or service they advise friends and family. That surpasses the 42% who said they always recommend a product or service they really like; the 71% who said they’re always looking to experience something new; and the 67% who said they love telling people about something new they’ve learned.

“Marketers trying to locate WOM Champions will have a far better chance if they look within their rewards programs rather than outside of them. COLLOQUY’s research shows, in fact, they would be three times more likely to find Champions within a rewards program than not,” said COLLOQUY Partner Jim Sullivan.

“Loyalty marketers have already built a great WOM platform, the one provided by their rewards program,” Sullivan noted. “WOM Champions can spread the good word or switch to Madvocacy mode, depending on the treatment they receive,” he added. Sullivan provided the following three brand conversation best practice tips for turning Madvocates into Advocates:

Make sure customers not only have an opportunity for a dialogue (not a monologue) with the brand, but with each other. That’s what COLLOQUY calls the ‘trialogue.’ Get the conversations started by asking for opinions and insights, and recognize contributions.

Involve customers in WOM programs by forming online social sharing communities, panels and co-development platforms. Do your own social media.

Be innovative and make sure content is relevant, fresh and rewarding. Start by transforming your marketing mindset from “incentive” to “service.” Be sure to nip any service problems in the bud and head off any negative WOM that can quickly go viral from these well-connected customers. "
 

About COLLOQUY

COLLOQUY® comprises a collection of publishing, education and research resources devoted to the global loyalty-marketing industry. COLLOQUY’s research division develops research studies and white papers including industry-specific reports, sizing studies and insights into the drivers of consumer behavior. Info: www.colloquy.com.
 

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