Monday, April 18, 2011

Customers who self-identify with your business

Another great study, this one in the latest issue of the Journal of Consumer Research. They found that when people have a falling out with a company that they use regularly because it has good prices or good products, they get angry and take their business elsewhere (obviously).

BUT, when they have a falling out with a company with which they self-identify (which marketers usually love because it generates lots of loyalty), they don’t just get angry, they also feel shame and guilt and embarrassment. So they are much more likely to do something vengeful. Self-identifying brands are ones like Whole Foods, Patagonia, or some other brand that shares your “values.”

If you are lucky, they will just throw away or break the products they have of yours. But in some cases they can be much more public in their retaliation. With social networks, the scope of the bad publicity can be much bigger than it used to. (Former) customers might rant and rave about how bad you are to all their Facebook contacts.

They found that these falling outs don’t have to be based on some kind of incident like bad customer service. Even if they just slowly get tired of the company over time, they may retaliate. The authors recommend that in these cases, you may be better off promoting a smooth disengagement rather than trying to win them back, which could just be more emotional. Send them a coupon for a similar product by another company. Sounds counter-intuitive, but it may be a way to limit the damage.

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