Marketing Genius from Maple Creative


Marketing tips, observations & philosophy, plus a few rants and random musings - from those who practice, preach and teach marketing, research, advertising, public relations and business strategy.

Thursday, May 15, 2008

Referrals and Service Recovery

At Next Generation Marketing, we recently presented a great deal of information about referrals. I wanted to share some additional information and resources about this important topic. It's worth a deeper look.

We all know that people live, socialize and communicate within networks ... and today across social networks such as blogs, forums, e-mail, Twitter, Facebook, etc. People talk about their kids, hobbies, their vacation destinations and their favorite sports teams; naturally people also share their experiences as consumers.

Studies prove this. The Coca-Cola Company conducted a study in the late 1960's and found that a highly satisfied customer is likely to tell four to five people, on average, about a positive experience. On the other hand, a bad experience will also be communicated—to an even greater extent. Coke learned that a dissatisfied customer is likely to spread the bad news to nine or 10 people.

Such information provides substantial motivation to the business owner to seek out and repair customer complaints. In fact, such situations create an opportunity for a company to inspire a loyal, engaged customer. (Remember, you cannot convert a customer to a loyal advocate. You have to inspire them to become advocates.)

When a company successfully recovers from a service snafu (i.e., makes it right for the customer and successfully addresses the situation), it can be a very powerful experience. The Coca-Cola study found that in service recovery situations the consumer is likely to share the news of the resolved problem with nine to 15 people. Today with the prevalence of social networking tools the numbers are likely multiplied. Still, the ratios are likely to remain intact.

As Justin Seibert explained: "You only have two opportunities to make a good first impression. One occurs upon initial contact; the other occurs after you've screwed up (and fixed things)."

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Blogger zowoco said...

That's really interesting what Coca Cola say in their marketing study. Let's just let that sink in: 4-5 referrals for a positive experience and 9-10 referrals for a negative!

For me this all boils down to whom you employ, their customer service ability, the time you take to train your staff in customer service. It doesn't matter how good your offer, if the customer gets a poor experience they will walk away unhappy, tell others, never come back!

So long term customer satisfaction is the ultimate goal of every business. When you run a one-man-band company or blog online then YOU have to get everything right, and this is a gentle balance between thinking things out first, and taking the time to communicate with your customers - ask them: what did/didn't they like. How can you improve?

Take the time, and always be willing to improve!

8:41 AM

Blogger Joe said...

I love your blog! I added a link to my blogroll. If you want to add a link to mine, the address is and the name of the blog is Joe's AdBlog. Let me know if you want me to remove the link. Take care.

1:45 PM

Blogger Skip Lineberg said...

Thanks for joining the conversation and for highlighting the importance of the Coca-Cola study's findings with respect to customer service. What a great reminder. It sounds like you are practicing what you preach. We appreciate your perspective and hope that you will return here often.


12:44 PM

Blogger Skip Lineberg said...


Thanks for stopping by ... and thanks for the compliment! Why not have a profile on your blog so we can learn more about who you are?


12:45 PM


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