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Consumer Talk in the Cloud about Poor Customer Care Impacts the Bottom Line

New Study Finds Australians Boycott Organisations Based on What They See on Social Networking Sites
  • 01 September, 2009 12:10

Sydney, Australia (1 September, 2009) – The consumer conversations taking place on the social web about poor customer experiences can negatively impact an organisations’ bottom line and reputation. So says a new survey investigating how Australian consumers want organisations to engage with them through sites like Twitter, YouTube and Facebook.

The study, commissioned by RightNow™ Technologies (NASDAQ: RNOW) and conducted by StollzNow Research, found that nearly a quarter (23%) of online-Australians have boycotted an organisation after reading a negative comment on the social web about how that organisation treats its customers. Of those boycotting organisations in this way, 42% said they had previously been a customer of the organisation.

The prolific use of social networks by Australians and their willingness to create their own content(1), compounds the impact of negative customer experiences on a brand’s reputation:

· Nearly a fifth (18%) of those polled have posted something about their poor customer experiences on Facebook

· 11% have actually joined a group on Facebook opposed to the company in question

· Others have Twittered, blogged or found negative videos on YouTube about the company and shared them with friends and family

· In every case, the top reason Australian’s took the action they did was to dissuade others from doing business with the organisation

The social web as a customer service channel: While negative consumer-to-consumer conversations or comments on the social web can have a detrimental effect on consumer spending, there is also massive potential for organisations to engage and interact with consumers through the social web to foster brand loyalty and to turn ‘badvocates’ into advocates. For instance:

· 60% of Australians said; if they posted a negative comment about an organisation on a social networking site, they would welcome contact from the organisation to try and resolve the issue

· 66% said; they’d also welcome contact from the organisation following a positive comment posting

· Three-quarters of Australians believe companies should listen to what customers say about their products and services on social networking sites and follow up with the people who have commented

The social web as a potential revenue channel: Similarly, for organisations successfully engaging consumers on the social web, whether through direct dialogue or carefully executed advertising campaigns, there is an opportunity to generate sales through the social web. For instance:

· More than a third of Australians (34%) have seen a positive discussion about a company’s products/service between consumers on the social web and then visited that company’s website AND made a purchase

· 13% said they have had a dialogue with a company through the social web and then made a purchase

· 51% have seen an advert on a social networking site and clicked on it to reach the company’s website AND half of those who clicked on the advert went on to make a purchase following what they found on the website

The social web and industries: While the study’s findings suggest that social networking sites offer organisations another channel through which to engage, serve and sell to consumers, it also asked those polled to identify the industries they were most likely to post a comment about on the social web and whether the comment was positive or negative. The study found that:

· Telco’s receive the highest number of comments (18%), and most negative commentary 71%

· Travel & leisure companies are the most likely to receive positive comments (73%)

· Government agencies receive 8% of posted comments, 63% are negative

· Financial Services receive 7%, 62% of these are negative

· Retail gains 15% of posts, 47% are positive, 36% are negative

· Electronic goods providers receive 12%, of which 48% are positive and 35% are negative

Commenting on the survey’s findings, Brett Waters, RightNow’s Vice President of Asia Pac – South, said: “The survey’s finding serve up a stark warning for all organisations, both commercial and public, that ignoring the viral nature of the social web can be detrimental to revenue and popularity. Any execs considering what social networking sites mean to their business should take heed of the survey’s overriding message; consumers WANT you to interact with them through sites like Twitter. Of course that doesn’t mean organisations now have carte blanche to start ‘stalking’ customers! Rather, they must take a considered approach; monitoring conversations so they can learn the where, when and how of positively influencing badvocates and fostering further loyalty among advocates.”

1 ‘The Australian Adult Social Technographics® Revealed’, Steve Noble, Forrester, December 1, 2008 About StollzNow Research

StollzNow Research is a leading Australian insights and research advisory based in Sydney that specialises in understanding human behaviour in a way that goes beyond reportage and focuses on the future.

The survey interviewed 505 respondents from the online panel of Research Now / Valued Opinions in July 2009. Quotas were set for age, gender, and state of residents so that the findings are representative of the total Australian population. The confidence level is plus or minus 4.3% at the 95% confidence interval.

About RightNow Technologies

RightNow (NASDAQ: RNOW) delivers on demand CRM solutions that help consumer-centric organisations deliver great customer experiences. Approximately 1,900 corporations and government agencies worldwide depend on RightNow to better meet the needs of those they serve. RightNow is headquartered in Bozeman, Montana. For more information, please visit RightNow Technologies. RightNow is a registered trademark of RightNow Technologies, Inc. NASDAQ is a registered trademark of the NASDAQ Stock Market.

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