Customer Experience Drives Word Of Mouth

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

Written by 

I am an experience management transformist, helping organizations improve business results by engaging the hearts and minds of their customers, employees, and partners. My "job" is Head of the Qualtrics XM Institute. The Institute is still being established, but our goal is to help organizations around the world thrive by mastering Experience Management (XM). As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. And, as many people know, I love to speak about these topics in almost any forum. Prior to joining Qualtrics, I was managing partner of Temkin Group (leading CX research, advisory, and training firm), co-founder and chair of the Customer Experience Professionals Association (CXPA.org), and a VP at Forrester Research. I'm a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Check out my LinkedIn profile: www.linkedin.com/in/brucetemkin

10 thoughts on “Customer Experience Drives Word Of Mouth”

  1. 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?

    1. 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

  2. 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

    1. 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.

  3. 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!

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