The Hidden Power of Being Vulnerable: Negative Reviews Can Boost Sales by 40%

jaakko_photo1_.jpgA franchise doesn’t just become one overnight. We know that the franchise community is composed of leaders who understand the tremendous value of earning and keeping committed customers. The reason why so many people return to franchise brands time and time again — from McDonald’s to Servpro — is that the brand has built a level of trust that compels them to return.

Getting to that level of trust is easier said than done. And things are changing in an era of constant online feedback from customers.

Think about the last one-star review you received. It sticks around online even when you resolve the issue. No matter the location or territory where those customer escalations happen, they impact the brand as a whole. Part of what a franchise sells is brand recognition, a time-tested model consumers trust and franchisees can rely on to guide them as business owners. So when a franchise receives negative feedback, it stings.

But what happens when a brand takes negative feedback, empowers a customer with a resolution and proactively publishes information about the resolved complaint online?

The answer may surprise you.

Why complaints matter

According to Dimensional Research, 52 percent of consumers stop buying from a company after a bad experience. For a franchise, that kind of loss impacts not just your local franchise owners but corporate too — it’s a loss in potential royalties and it can tarnish your brand’s reputation. That’s why it is important to take action when you see an unhappy customer complaining online. Focus on winning her back and train franchise owners to think that same way.

A majority of customers aren’t actually expecting brands to respond to complaints. So those that take the time to make things right have an added advantage. Just 42 percent of consumers complaining online expect a reply from a brand.

Taking the time to respond can translate into more revenue. Customers who engage with companies over social media spend anywhere from 20 to 40 percent more money with those companies than other customers, according to Bain & Company. And resolving complaints convinces 70 percent of customers to do business with you again, according to research from Lee Resources.

Resolving complaints also makes customers more loyal to a brand. Studies show that customers are willing to stick with — and even pay more — to brands who aim to resolve issues publicly. According to Harvard Business Review, customers who received any kind of response to their tweet were willing to pay almost $9 more for an airline ticket and $8 more for a wireless carrier’s monthly plan.
 

Become a franchise that stands out from the rest

According to Forbes, consumer expectations are shifting from items to experiences. A study found that 67 percent of Americans feel purpose-driven companies care more about them and their families than traditional brands.

Focusing on the experience of customers who interact with your franchise can pay huge dividends as we have seen with some of the numbers shared in this article.

But how do you make that happen? How do you take a bad experience and make it a better one?

I want to provide a six-step solution, a basic outline to follow. The first few steps are typical when it comes to facing a bad customer experience. But the third step is where we start to shift the narrative.

  1. A customer wants something
  2. She encounters a problem before she can get that something
  3. At the peak of her despair, a guide (that would be your franchise) steps into her life
  4. The guide takes action
  5. That action helps her avoid failure
  6. That action ends in success. The customer understands you have her back

Making this your franchise story for how you solve problems helps you empower your customer — she becomes a loyal advocate because you were willing to be vulnerable and take ownership of an issue.

Better still, that can become content that helps you further advance your franchise story. Imagine, during the franchise discovery phase, when a franchise prospect asks you: How does your franchise deal with customer complaints? You can tell them: We face them head-on. And we have a system in place that helps our franchise owners increase revenue by solving those complaints. Your current franchise owners will thank you too in the long run.

Being vulnerable can open doors for your franchise. It makes your brand even more authentic and trustworthy.

Franchising is built on relationships. And the best relationships are built on people opening up to each other, making themselves vulnerable.

Jaakko Timonen is the Founder and CEO of No No No, a platform that brings together consumers and businesses to resolve complaints. What makes No No No different is that they offer businesses a fair opportunity to respond. Consumers are only able to rate and review the outcome of the resolution, unlike in any other platform.

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