It's cold and rainy and the parking lot outside the store is packed, except for a spot way out in the corner. The shopper pulls up, only to find a shopping cart blocking the space. Inside, the store is jammed. The digital cameras are hard to find, and it's impossible to know why one costs $150 and another $300. The two models that are on sale are out of stock, and it takes a clerk five minutes to bring another one from the back of the store. At checkout, the line is stalled while those on either side are flowing smoothly. Finally, when the customer reaches the cashier, he is told his $25-off coupon is not valid until the next day.
Wharton marketing professor Stephen J. Hoch, who suffered through this scenario first hand during a recent shopping trip, says customers are bound to talk about these kinds of experiences. And, according to new Wharton research, such word-of-mouth communication should be a big cause of concern to retailers.
Results of The Retail Customer Dissatisfaction Study 2006 -- conducted by The Jay H. Baker Retailing Initiative at Wharton and The Verde Group, a Toronto consulting firm, in the weeks before and after Christmas 2005 -- show that only 6% of shoppers who experienced a problem with a retailer contacted the company, but 31% went on to tell friends, family or colleagues what happened. Of those, 8% told one person, another 8% told two people, but 6% told six or more people. "Even though these shoppers don't share their pain with the store, they do share their pain with other people, apparently quite a few other people," says Hoch.
Overall, if 100 people have a bad experience, a retailer stands to lose between 32 and 36 current or potential customers, according to the study.
The complaints have an even greater impact on shoppers who were not directly involved as the story spreads and is embellished, researchers found.
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