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Saturday, April 15, 2006

New study reveals that bad news not only travels fast, but it gets amplified along the way

In my prior career as a quality professional I'd heard that positive word-of-mouth about a company's products and services may be passed along to three people, whereas bad news transmits much further -- to at least twice as many individuals. This is a powerful inducement for businesses to go all out to avoid bad will. A new study, done in part by the prestigious Wharton School, adds a great deal of insult to the injury caused by customer complaints: As reported in the April 17th Business Week magazine and previously by CBC News, the stories about bad products and/or service become magnified with each re-telling, so that people down the line are up to 5 times as likely to avoid the business in question as the original unhappy customer. Evidently Hollywood is well aware of this phenomenon, because when they know a major movie will be a bomb, they roll it out to as many theaters as possible to maximize revenue the first weekend before the bad buzz can kill it.


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