Watch out for the ‘negative bias’ in customer feedback

It’s so easy to complain these days that negative feedback is often over-represented in the data.

James McCusker

James McCusker

Back in 2007, David H. Freedman wrote a very perceptive article about customer comments. It was titled, “Ask and You Shall Be Misled.” Freedman explained: “Customers can tell you a lot. But sometimes they don’t know what they’re talking about.”

It is a helpful reminder that information gathered from customer comments or evaluations often contain elements that are irrelevant, inaccurate, mistaken or biased. And if you don’t cull those out somehow, you could end up modifying or dropping a product or service that the overwhelming majority of your customers really want and like.

Internet use has expanded greatly since 2007, but it does not seem to have improved the quality or general validity of customer comments. Most people by now have probably made an online purchase that was disappointing, even though it had high customer ratings. And most of us have made at least one hurried purchase that turned out to be perfect, even though, belatedly, we discovered that most customers didn’t like it.

Human psychology plays an important role in making and interpreting customer comments, and two of our behavior patterns are especially important. Our psychological makeup predates the internet, of course, but these patterns have assumed more importance now that it is generally easier to access, compile and analyze that type of information.

Two behavior patterns or tendencies stand out:

• Customers who are not satisfied with a product or service are more likely to submit comments than customers who were satisfied.

• And negative information travels faster, and farther, than positive information.

Of these, the first is the one most businesses must deal with. The second has been accelerated by the internet and, especially, “social media,” where truth doesn’t always win out. Fortunately, most smaller businesses don’t have to deal with that on a routine basis.

The tendency of unsatisfied customers to express complaints while satisfied customers are silent can be countered to a degree by more actively seeking responses, instead of just waiting for the incoming comments. This is usually the reason why your inbox is filled with requests for your opinion on a purchased product or service. Some of these requests are ridiculously out of proportion to the transaction. Our office, for example, was recently presented with a two-page survey regarding our level of satisfaction with a purchased light bulb.

Firms have to be careful not to wear out their welcome and not assume that the customer has nothing better to do than fill out a response form. Routinely sending out response, evaluation or opinion forms to follow up on every purchase shows a disrespect for customers and invites a “no-response” in return.

A more productive approach to the problem of negative-comment bias is to analyze the data that you already have. For most companies, the best measure of customer response is found in the customer activity file. A satisfied customer comes back; most dissatisfied customers are never heard from again.

While most retail businesses are highly dependent on repeat business, other businesses can vary widely regarding the nature and importance of repeat customers — and the role of referrals. There are some businesses or services where repeat customers are not expected. If you successfully defend someone in a murder trial, for example, you would not ordinarily expect that the client will return for another. A successful outcome in civil litigation, though, might lead to more legal service, either for that client or through a referral.

If you have set up your sales system correctly, you already have the repeat customer information, although you might have to reshape it into a form that supports analysis and decision support. If you cannot access that kind of data with your information system, change the system.

Comparing the data on repeat customers with the data from customer comments and responses to surveys will allow you to estimate the level of negative bias in the comments and responses. This will help you to decide whether you have a problem that is serious, one that can be managed or one that can safely be ignored.

Managing a customer dissatisfaction problem is expensive, and you will need to develop a decision system which takes that into account when responding to a customer’s negative comment. If the customer is contacted, though, it should be done with the idea of accepting the challenge of converting that dissatisfaction into lasting loyalty. It costs money, but a converted customer is not likely to keep it a secret — a behavior pattern that can help build your potential customer base. That can’t hurt, especially in these times when the cost of acquiring a new customer is so high.

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