The argument that all press is good press is not always true. In some cases, any press will drive a brand forward, but negative word of mouth and negative PR is often debilitating for a company. PR companies specializing in crisis management exist to help companies mitigate and recover from negative word of mouth and press.
Word of mouth works differently from the general press and media. When a person directly leaves a bad review or spreads negative information directly, the audience is more likely to believe that information. Any first hand information is immediately more credible. Companies use positive testimonials, case studies and reviews as sales tools for this reason. Any positive first-hand information builds trust, and increases conversion potential. Negative word of mouth, however, has an adverse effect.
Word of mouth is dangerous and negative information can escalate into more elaborate stories than reality. The ability to quickly communicate negative comments through social media and digital outlets also amplifies the effects. Information spreads rapidly, and a single post can spiral out of control. It can also start a conversation in which multiple negative experiences are shared within the same publicly visible conversation.
Negative word of mouth is evident at the cash register. According to a Spiegel Research Center, those who viewed negative remarks on social media channels reduced spending by 12 percent. Purchase frequency was also reduced by 5 percent. These are significant numbers that can cost a small business a significant portion of its projected sales, and potentially may cost a large company millions of dollars.
While negative word of mouth has an immediate effect on business, it does not need to be lasting. Offering individuals the opportunity for another experience, can mitigate negativity and it may improve future spending patters. This is especially true when the individuals note the change after the new experience on social media channels. The latter study notes a 58 percent increase in spending, after a negative reviewer has a new, positive experience. Not only can a business mitigate the negative word of mouth, it can increase profits.