Blood, Beer, And Bourbon: How To Turn Negative Word Of Mouth Into Positive Promotion

In the best of times, and the worst of times, social media can be used to effectively engage—and learn about—your customers.

One might not think bourbon, beer, and loyalty programs have much in common, but they do when it comes to turning an oops into an opportunity.
All three proved as much when faced with the prospective fallout of negative word of mouth.

In the case of bourbon, the popular distillery Maker's Mark realized the depth of its customers’ dedication—and anger—when it announced it would reduce its alcohol level to meet demand. Its customers howled and Maker’s Mark quickly changed its decision, deepening engagement in the process.

The beer boon took place after a Red Cross employee mistakenly sent a tweet referencing a four-pack of Dogfish Head beer with the message, "when we drink we do it right #gettngslizzerd." Dogfish Head quickly jumped on the hashtag and asked its fans to donate to the Red Cross. The Red Cross, meanwhile, responded with humor: "the Red Cross is sober and we've confiscated the keys."

Both of these events lead to a theory—that negative word of mouth may actually indicate brand passion and lead to increased sales and engagement—if acted upon appropriately and quickly. (Of course, there are notorious examples of lost causes.)

So when the Air Miles Reward Program, operated by LoyaltyOne, recently made a couple of program changes, it decided to closely follow the social media response. The results are in a report coauthored by researchers at Northwestern University, called "The Positive Power of Negative Word-of-Mouth."

The research revealed some unexpected numbers, particularly regarding perception and, in the case of loyalty programs, increased redemptions. As the report puts it, "The very instance of negative engagement is both a warning and, when best practices are employed, an opportunity."

Among the findings: Those customers who posted comments to social media were 70% more actively engaged with the brand than non-posters.

Surprising Activity

The study analyses the outcome of when the Air Miles Reward Program made a couple of key program changes. One of these changes affected guidelines for reward miles redemption, a sensitive area for loyalty customers.

Realizing this, and knowing that engaged members tend to express their opinions when program rules change, LoyaltyOne flagged the shared member commentary on its community website. Researchers and linguistic analysts from Northwestern University's Medill IMC Spiegel Research Initiative examined all posts related to the program’s changes. Linking each post and related viewing activity to LoyaltyOne’s transaction and redemption data, the analysts compared behaviors for a 15-week period against a control group of 10,000 offline loyalty program members.

They expected some verbal pushback, but they were surprised by actual member activity afterward.

First, the researchers determined that those members who posted comments were generally more valuable customers—70% more actively engaged—and that their negative comments stemmed from their emotional connection with the brand. They were, as the report describes it, "more passionate in expressing their opinions." A similar phenomenon took place in the story involving Maker’s Mark.

Passion can lead to activity, and it did for air miles. About one-third of those who posted comments redeemed reward points soon afterward. They also increased their collection activity by 36%. That compares with a 21% lift among redeemers in the control group.

How did the researchers account for such positive results? During the commentary period, LoyaltyOne responded to specific questions and clarified any inaccuracies when they were posted. This is a critical point of the research: LoyaltyOne’s strategy at the time was to offset the negative perceptions and comments with simultaneous positive experiences, basically exposing its most dedicated members to the core values that initially attracted them to the brand.

This brand-love approach is similar to how the Red Cross restored its reputation by relying on its crisis-management expertise (with humor) and how Maker’s Mark depended on its quality (with alcohol).

Turning Frowns Upside Down

Through the research, LoyaltyOne found that brands could challenge the loyalty of even emotionally engaged consumers. It is up to the organization to monitor the relationship regularly and reinforce the elements that make it positive. This goes double when implementing change.

If we have the data and the resources to launch a timely response plan that is genuinely worded, we can turn negative word of mouth into good publicity and improved business.

Here are some tips for leveraging that brand passion and keeping the relationship strong:

Use the data: Analyze transactions, redemptions, and social media traffic data from both social media posters and viewers during and after any period that may provoke negative word of mouth.

Be fleet of foot: Prepare to act quickly if negative commentary begins to contribute to unwanted media buzz and declining sales. A targeted response plan should express genuine appreciation for the comments and promote positive product or brand qualities.

Watch your own word of mouth: Let customers know their opinions are welcome. Recognize their commentary and react in a nonconfrontational manner to reassure posters and viewers alike that the brand cares about what they have to say.

Go public: Angry comments can diminish brand integrity and cause other readers to second guess their own purchases. Publicly responding through the same social media channels can ensure that the positive changes are seen.

As always, it’s best to prepare for a response plan by first identifying what makes customers loyal to the brand in the first place. Because, whether it’s bourbon or beer, loyalty programs or the Red Cross, any brand can make a mistake. But it takes passion on both sides to turn it into an opportunity.

Bryan Pearson is president and CEO of and author of The Loyalty Leap: Turning Customer Information Into Customer Intimacy and the forthcoming e-book The Loyalty Leap for B2B: Turning Customer Information Into Customer Intimacy. Follow Bryan at www.pearson4loyalty.com.

[Image: Flickr user Tony Webster]

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2 Comments

  • Anthony Reardon

    Very good Bryan,

    I found it quite interesting how you framed this because this is a subject I specialize in, but I approach it differently. I talk about using social media to develop "superior market intimacy".

    So from my perspective, what stands out to me is the mental model or ingrained assumption many companies have about using social media and the web to interact with customers. There are some powerful assumptions that go along with viewing social media as just a digital alternative to traditional media channels like print, radio, and television. The most basic of these is that it is one way for more press release type communications. Traditionally, a brand was the authority exercising control of the messaging and relating to customers as an "audience". You can still see the strong influence of this "We sell/ You buy" thinking being pushed across the industry. However, a lot of people find that kind of interaction to be obvert manipulation, unwanted solicitation, condescending, and an insult to intelligence. The web is actually a level playing field where companies do better to appreciate individuals with mutual respect- that people have the same authority as the brand actually wants to exercise.

    The second major aspect I would point out is the concept of social interaction. For a lot of companies, they look at the social activity as primarily the scope of their audience among each other, to get people talking about a brand, and subsequently for the word to get out virally through their spheres of influence. However, an alternative view on this that deserves more emphasis is the idea of social referring to the direct interaction between companies and their market.

    So this entails some adjustments of paradigm. Instead of putting out press releases through social media and monitoring activity for situations where you need to step in and do damage control, you would be engaging people directly with every intention of a two way feedback loop, and you would be anticipating how to proactively interact across the multitude of perspectives- both positive and negative.

    I generally point out that every complaint is an opportunity to improve. We've already established that negative sentiment travels greater and longer across the web, probably represents a weight of 10X market reach, and it is by far more cost effective to maintain than break through to new customers. Yet there is a lot more to it when you talk about social media and developing communities around brands.
    For example, if you are engaged with a customer base, should you even roll out a wide sweeping change to your products and services? Your stakeholders are "right there in it with you", but in many cases where people are complaining after the fact, it has a lot to do with a company neglecting to involve them in the decision process. The supply push mentality of rolling out some change amounts to educated guessing when really you have the opportunity to ask people what they want, like, and don't like- before you ever decide what is a practical course for your business. Even if you are concerned with being too transparent in a competitive marketplace, you still have opportunities to get at least a sample of your community behind closed doors and involved in what you are thinking.

    When someone complains, you should not be concerned with damage control or spinning positive messaging over it. That is the wrong priority basis, can easily amount to sweeping under the rug, and has everything to do with fatal flaws in your underlying assumptions. I think it is critical to accept complaints for their merits, especially understanding that what you are getting may actually be getting derived from passion about your brand, and ideally to take it in and do something substantial with it. I see many cases where companies view these situations as though customers need to be corrected, when if they really have a passion for their customers, they would do better to be more accountable and correct themselves. That in itself will go a long way in developing your brand reputation.

    When you are thinking about how to increase engagement and sales, you might consider involving your customers in the conversation.

    Best, Anthony