Customer Experience Drives Word Of Mouth

June 10, 2009 10 Comments

Word of mouth is a popular term, but I wondered what it actually meant for companies. So I looked at this issue in a recently published report called How Customer Experience Drives Word Of Mouth.

We asked more than 4,500 consumers how often (in the past 90 days) they had told someone about a good or bad experience with firms across 12 industries: airlines, banks, cell phone service providers, credit card providers, hotels, insurance firms, Internet service providers, investment firms, medical insurance companies, PC manufacturers, retailers, and TV service providers. 

Here are some of the findings:

  • More consumers share good experiences. For eight industries, more consumers talked about a good experience than they talked about a bad one. The four exceptions: credit card providers, health insurance plans, Internet service providers, and TV service providers.
  • Bad news is discussed more frequently. For all industries except retail, consumers discussed bad experiences with more people than they discussed good ones.
  • PC manufacturers and airlines generate the most discussions. When consumers have either a good or bad experience with a PC manufacturer or an airline, they tell more people about it than they tell about experiences in any other industry.
  • Airlines face the largest negativity gap. While consumers will tell an average of 5.6 people about a bad experience with an airline, they will only tell 4.4 people about a good one — the largest negative gap across any industry.
  • Gen Yers are the most chatty. Across every industry, Gen Y consumers were the most likely to talk to someone about a good experience. They were also the group most likely to talk about a bad experience in 11 of the industries. The only exception: More Older Boomers talked about their bad experience with health plans.
  • Gen Xers spread their bad experience. For 10 industries, Gen X was the generation to tell the most people about a bad experience.

The bottom line: Give customers a good experience to talk about

Filed under Customer experience

About Bruce Temkin, CCXP
I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about these topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

10 Responses to Customer Experience Drives Word Of Mouth

  1. Andy Hanselman says:
    June 11, 2009 at 10:07 am

    Word of mouth works well – word of mouse works even better! Have a look at this example over here in the UK of a disgruntled customer who spread a lot of bad news:
    http://www.andyhanselman.com/2009/06/03/the-power-of-a-rage-rover-customer/

    Reply
  2. Ken Stampe says:
    June 11, 2009 at 11:33 am

    Who are the top companies in proactively generating positive word-of-mouth and putting customer experience above corporate profits to engender long-term customer loyalty?

    Reply
    • Bruce Temkin says:
      June 12, 2009 at 7:39 pm

      Ken: I’m not sure great companies put customer experience above corporate profits. They understand the relationship between customer experience and business success, so they make good decisions about priorities when it comes to customers. A few companies that come to mind: USAA, Zappos, KeyBank, Cleveland Clinic, Chi-fil-A, Apple, Logitech

      Reply
  3. Tom says:
    June 12, 2009 at 9:00 am

    I am familiar with web hosting companies and they get a fare share of negative word of mouth. Most web hosting companies are interested in acquiring new accounts but tend to have obsolete control panels, poor data centers, and no customer support. There is one player is contrary to this and that is http://www.mediatemple.com

    Reply
    • Bruce Temkin says:
      June 12, 2009 at 7:41 pm

      Tom: You make a good point. Some companies focus so aggressively on customer acquisition that they forget to treat existing customers well. They grab some customers in one area and lose them in others. Not very sustainable.

      Reply
  4. Jason Mittelstaedt says:
    June 12, 2009 at 4:00 pm

    Great statistics Bruce, thanks for sharing. In our annual RightNow Customer Experience Impact report we saw similar results. Harris Interactive, our partner on the research, found that 84% of consumers will tell someone else about a bad experience, which was up from 67% in 2006. To net it all out, I think it is pretty fair to say that whether the experience is good or bad, the consumer is going to tell their friends about it … so we better make those experiences the best we can!

    Reply

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