customer reactionIt’s axiomatic that you find out how good a business really is when it has already screwed up once; the speed and nature of the fix show the firm’s true nature. After shipping you the wrong item, do they just offer to refund your return shipping? Do they overnight the correct item to you, no questions asked? How quickly do they resolve the problem?

It turns out that the way companies respond to bad online reviews makes a difference, too. As reported by Mediapost, a Harris survey showed that 18% of those who posted a negative review of the merchant and got a reply ended up becoming loyal customers and buying more.

In addition, and perhaps an even bigger surprise, nearly 70% of those consumers receiving replies reversed the negative content either by deleting the bad review or posting a second positive one. Considering the power of word of mouth, and in particular negative word of mouth, that’s a stunning accomplishment.

While salvaging one out of five unhappy customers is a laudable goal (and, I suspect, a lot cheaper than prospecting for new customers), I have no doubt the benefits extend far beyond that number. Countless other buyers reading reviews will see a proactive response to a problem instead of an unanswered (and apparently ignored) complaint. (Indeed, when I’m evaluating an online purchase I usually visit the firm’s forum to see how quickly and effectively they respond to problem reports. Unanswered complaints are a huge red flag.)

Without a doubt, this issue is a no brainer. Monitor where your customers post – Twitter, Facebook, blogs, review sites, etc. – and engage them quickly and constructively. Don’t try to win an argument about who’s right; remember, you may have just ruined important plans, and the customer is upset. Offer a simple but sincere apology, and state how the problem can be resolved with minimum customer pain. Not only do you have chance to retain that customer, but you’ll have influenced many others as well.