Upset Customers Less Likely to Badmouth Socially Responsible Companies

January 20, 2015 DATAMARK

Nobody’s perfect. Companies are bound to make a mistake and upset a customer. But that angry customer may be willing to forgive and forget if they see that the company supports causes that the customer also values.

Demonstrations of corporate responsibility–donating to charitable causes or accommodating employees’ needs, for example–can ease customers’ anger at service failures, according to new research from the Carson College of Business at Washington State University.

“Whereas most studies have focused on reactive strategies, such as apologies and compensation, little is known about the effect of proactive strategies, such as corporate social responsibility (CSR), on consumer behavior following negative events, said the study’s lead author, WSU Marketing Professor Jeff Joireman in an interview with the university’s news department. “If CSR buffers firms against service failures, firms may be more willing to adopt preemptive CSR Initiatives that maximize returns.”

The researchers conducted two studies. In the first, they found that environmentally conscious customers who experienced a service failure were less likely to be upset and badmouth a company if the company supported environmental causes that aligned with the customers’ values.

“We found that when a firm donates money to environmental causes, environmentalists ‘cut the firm slack’ following a service failure, but non-environmentalists don’t,” Joireman said.

In the second study, the researchers found that customers were less likely to spread negative word of mouth, and actually increase positive word of mouth if the company gave the customer a choice in the company’s allocations toward corporate social responsibility.

An abstract of the research article is available at the web site of the American Marketing Association Journal of Public Policy and Marketing.

The post Upset Customers Less Likely to Badmouth Socially Responsible Companies appeared first on Outsourcing Insights.

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