I was just looking at an interesting presentation I found on SlideShare on this subject and one of the slides presented the following 2 facts

- A London School of Economic study showed that a 2% reduction in negative word of mouth increased sales 1%
- A Dell study on Word of Mouth showed that average customer is worth $210 in revenue, an average detractor costs a company $57 and an average promoter generates $32 in sales.

In tradional marketing, reputation management is somwhat easier to manager but with the lightening fast pace of social media you have to be ready for rapid reactions to negative word of mouth as well as quickly promoting good word of mouth.

Taking this into consideration, how much effort and resources do you or your clients put into reputation management in your social media efforts? As I am just heading down this road with a couple of clients we are just beginning to plan for dealing with bad word of mouth and I am interested to hear from people who are actively doing this.

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I actually spoke to a few vendor a few months ago about their online reputation management solution. For clients who dont have a budget, I recommend using the free tools - like Google Alerts and to include all types of alerts.
In regards to the sentiments of the type of comment, negative comments stir curiosity and action to learn more about the product or services while positive comments may only stir curiosity. Good study to research further.

Oddly, I agree with your assesment of bad comments versus good comments as when I search for a product I tend to read the bad comments first to see if they are valid or if they are just put up their by cranks.

But with really high-products (enterprise wide application software for example) bad comments are just that, bad. If I am getting ready to spend 6 figures on a solution that will effect my whole company I want to see lots of positive comments.

I agree with high end product bad reviews. Being a market researcher, I also wonder if these bad comments are legit or planted by spies so it is important to do your due diligence and ask for a trial or free version, if possible, just to test drive it. There were a few 5 figure softwares that I got the test version and tested it out. This way, I discovered if it works for my goals or not. Sometimes this route is not possible and thus, relying on reviews becomes more necessary. It is always good to find legit review sources and user comments.

Bad reviews are going to come from one of four sources:

1. corporate spies/saboteurs
2. really disappointed/frustrated users
3. cranks who are never going to be satisfied regardless of what the product offers
4. in some rare occaisions, spammer/scammers who are looking to stir up crap and get people to look at their products.

I have seen all four and once you get used to the way they phrase their comments you can tell who the real reviews are and who are just noise to be ignored. But as you say, due dilligence is important.

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