A single dissatisfied customer can cause significant damage to a company, but this can be prevented with an effective customer satisfaction management system.

It will be difficult to avoid customers rating you. They will rate you in front of friends, on social media, or directly to you if you allow it. Naturally, it is good for your company to have more positive feedback than negative. However, you must realize that people are much more willing to spread bad experiences with a product/service than good ones. If your potential customer reads this, it can prevent them from making a purchase.

As many as 82% of consumers read reviews from those who have already purchased a product or service before their first purchase. The feedback from these buyers serves as their social proof of whether the product/service is worth buying. It gives them a kind of assurance that they will also be satisfied with their purchase. Positive feedback is especially helpful in this regard. However, you might also receive some negative feedback. It's not a problem if there's a bad review among the good ones; it only increases the credibility of the writing. We've already written about how negative feedback is also an excellent opportunity to turn it to your advantage with the right response. The problem arises when this information doesn't reach you, or you notice it too late, and the damage is already done.

Examples of Negative Social Proof in Slovenian Companies

We have prepared some practical examples from Slovenian companies when customers had a bad experience. Because the companies did not have an effective customer satisfaction management system in place, customers wrote about their experience on social media, where it had a wide reach.

GRAWE Insurance and Compensation Denial

The most "sensational" case by far was when GRAWE insurance denied coverage for damage because a lawnmower was allegedly not garden equipment. The policyholder had property insurance that also included garden equipment insurance. However, when lightning damaged the policyholder's lawnmower, they denied compensation. An outraged policyholder shared the denial letter on their social media, where they have over 600 friends. The reach of the post is indicated by the numbers: 777 people liked the post, 160 commented, and as many as 2,650 shared the post with their circle of friends. Therefore, more than 100,000 people learned about his bad experience. Since the case also reached the media, with Finance and several online portals reporting on it, this number is even higher. The case caused significant damage to GRAWE insurance. To be clear, we are not claiming that the insurance company did anything wrong operationally; they acted in accordance with their business terms. However, they could have handled the customer communication process better. The customer experienced pain during their interaction with the company and was prepared to communicate it to the company. The company did not respond adequately to the customer's complaint, leading the customer to start communicating their side of the story on social media in a way that does not allow for a 'fair' representation of the company. Grawe practically had no opportunity to present its side of the story. Thus, over 100,000 people received partial information in the style of 'The corporation is exploiting us,' thereby forming their own opinion about Grawe insurance. Will the company suffer because of one angry customer? Very likely. The loss of just 50 customers who decide not to choose this insurance will cost the company (considering the lifetime customer value) between EUR 50,000 and EUR 100,000.

What would be the correct approach?

Immediately after processing the damage claim, the customer should receive an invitation to assess their satisfaction with the claim resolution. The customer would first communicate their dissatisfaction to the company (rather than posting it on social media). This way, the company would immediately learn about the customer's problem and could start addressing the customer's pain point immediately. Companies dedicated to providing an excellent customer experience often choose to resolve such cases in favor of the customer, recognizing that it is more effective to retain an angry customer than to lose them and risk the negative social impact of an angry (former) customer.

Systematic Prevention of Negative Social Proof

Every customer counts, and every customer can do a lot of good, as well as a lot of damage, to a company. Companies that systematically collect customer feedback do so with the aim of identifying customer pain points and resolving them. Unresolved pain points create experiential loops in which new customers become 'caught,' directly affecting customer churn and long-term company profits. Do you know how many similar cases occur in your company? Most dissatisfied customers lack the motivation to contact the company proactively and express their dissatisfaction. Why would they search for the appropriate number, email, or person in your company and relive the entire experience? Most dissatisfied customers simply leave and share their dissatisfaction with their circle of acquaintances and friends. Do you know how much such and similar cases cost you?

The Artur system invites every customer to submit their opinion. This allows the customer to communicate with your company in a simple and unobtrusive way. This way, you will learn about potential dissatisfaction before it escalates into a PR problem. You can resolve the situation in a timely manner and prevent significant potential damage.