The Silent Killer: how negative customer experiences quietly destroys business growth

By Christopher Roberts

In the realm of business leadership and decision-making, the journey to success is a multifaceted one. Whether a business is striving for increased sales or exponential growth, a fundamental principle guides every business leader’s path: the art of increasing awareness, sparking interest, nurturing desire and facilitating a purchase. While this might seem like a straightforward business operation, there exists a silent killer that often goes unnoticed, quietly eroding the very foundations of organisational success. The profound impact of negative customer experiences on businesses acts as an insidious force, jeopardising growth and prosperity. But how?

Hidden parasites in a business

Imagine a scenario where a business diligently invests resources in advertising and social media campaigns to bolster awareness. The more people who know about a product or service, the higher the likelihood of successful conversions. However, lurking beneath the surface, negative customer experiences can be likened to a hidden parasite feeding off hard-earned gains. One notable case that is that of a popular EdTech company. The company executed a well-crafted strategy with popular film personalities as its brand ambassadors, invested in extensive advertising and hired persuasive salespeople, ticking all the right boxes for customer engagement. Yet, the relentless pursuit of sales success led to a shadowy underbelly of discontent. Its aggressive sales tactics and the resulting negative customer experiences created a storm of detrimental word-of-mouth and loyalty, massively impacting business revenue and brand reputation.

The power of negative word-of-mouth

Negative word-of-mouth has an uncanny potency that often outweighs its positive counterpart. One must not forget that bad news sells and spreads quite rapidly. Much faster than good news.
For every negative tale encountered, individuals need to hear at least five positive stories to consider a brand positively. This lopsided impact, akin to a cancerous growth, disrupts the equilibrium of hard-won progress. While sales and growth may flourish on one end, negative word-of-mouth spreads like wildfire on the other, imperceptibly tarnishing prospects and eroding potential.

The risks of frail customer loyalty

The implications of negative customer experiences does not stop at potential clients. Existing customer loyalty becomes fragile, vulnerable to the consequences of dissatisfaction. For instance, if a company’s retention rate is typically around 90%, a poor customer experience could cause this rate to plummet to 50%, effectively halving the customer’s average lifetime with the company.

Beyond one bad experience

But the impact extends further. Negative experiences with one product or service within a company’s portfolio can cast a pall over other offerings. This can diminish the share of the customer’s wallet dedicated to the brand. A prime example of this phenomenon is seen when a customer’s frustration with a particular service prevents them from engaging with other offerings they might have otherwise considered.

Turn the Tide: overcoming the silent killer

However, there exists a beacon of hope amidst these challenges. The resolution lies in a twofold strategy:

The creation of exceptional customer experiences; and, the strategic identification and rectification of underlying causes.
Figuring out exactly why some of the customers are unhappy with a business can be like searching for a needle in a haystack. Trying to find out who or what is causing those negative experiences takes experience and expertise, and an outside-in unbiased view. This is a recommended high-level four-step process:

Step 1: Define the customer strategy to make a business worthy of recommendation
An organisation that wants to make its business worthy of recommendation by its customers must shape its customer strategy such that it ensures that customers will want to recommend it to others. They must develop a defined CX statement that includes functional and emotional elements and a value proposition. This is akin to laying the groundwork.

Step 2: Measuring customer strategy and delivering planned emotions
If emotions are not measured, they cannot be managed. It’s important for businesses to measure what’s going on by training an eagle’s eye at the experiences their customers are having and whether they are delivering what was promised. They need to determine exactly which product, service, process or policy is creating detractors for their business. This is where they can start figuring out what’s working and what needs to be changed or modified.

Step 3: Neutralise All Detractors
As soon as a business identifies a detractor in their customer research, they must contact them directly, understand their issue in greater detail and take action against their specific feedback. Not only will the client appreciate this gesture, but the business itself can stop any negative word of mouth instantly. This conversation where an organisation takes accountability is a great way to convert a Detractor into a Brand Ambassador.

Step 4: Embedding an organisation-wide discipline to identify negative customer experience themes and take corrective action
It’s important for a business whose CX is either flatlining or going on a downward slope to get things back on track. They need to make sure that their whole team is on board with fixing any issues that are causing negative experiences. This will help them turn things around and make them better.

Take Control

The silent killer of negative customer experiences presents a formidable challenge to business leaders and decision-makers. Its ramifications, while discreet, hold the potential to undermine even the most robust strategies for growth and success. By acknowledging its existence and taking proactive measures, businesses can transform negativity into positivity, replacing dissatisfied customers with loyal advocates.