I was reading the Sunday New York Times when I came across a letter from a reader referencing the old saw that ‘one dissatisfied customer can cost you 10 new customers’.
I don’t know if there’s been much independent verificaton of the factual veracity of that statement, but if you believe in the power of word of mouth and personal attributions, I think it’s fair enough to give it the benefit of the doubt.
It’s worth thinking about how the ‘1 costs you 10′ rule of thumb has changed in the internet age. Has technology changed the applicable ratio? It used to be that only those with a prominent pulpit (a television show, a newspaper column) could have an outsize impact. But today, with everyone potentially a publisher to the masses via blogs, discussion boards, or just through email distributions, just about anyone has the potential to deliver pain to companies which displease them.
Also, maybe this ‘1 costs you 10′ idea is far too crude. Perhaps all customers are not created equal, especially in terms of word-of-mouth potential. Perhaps the customer’s WOM value is directly tied to the size of his or her sphere of influence. A hermit living in a cave without internet might only offer a 1/1 ratio. Your average person might be 1/10. The typical high school kid with a blog and a large social network might be 1/50. Tick off someone with a popular blog, and 1 could cost you 100.
Companies might want to take this into consideration when deciding how much effort to apply to customer satisfaction. Perhaps a standard query before deciding whether to accept a return hassle-free: “Excuse me, but do you blog?”