chapter  12
12 Pages

Black buzz and red ink: the financial impact of negative consumer comments on US airlines

There is growing acknowledgement of the financial value of consumerto-consumer recommendations for a brand. Reichheld1 and others have tracked and measured the relationship between market success and product advocacy (or recommendation activity) for various industries. Running in parallel to the belief that positive word of mouth is good for business is another belief that negative word of mouth can have an equally powerful but harmful impact on business success.The effects of negative word of mouth have not received nearly as much attention as the effects of positive word of mouth.And more importantly little work has been done to compare the financial value of positive recommendations to the financial value of negative recommendations. These are important questions to consider because the marketplace is a mixed bag with every brand having strong advocates and many times equally strong detractors. I recently looked closely at these issues within the

context of the US domestic airline industry and posed the following questions:

What is the financial value to an airline when one of its customers says something positive about it to an acquaintance?