Giving customers a little bit of bad news helps to keep them loyal

The customers most upset by bad news are often a brand’s most loyal, says Wayne Hoyer, marketing professor at the University of Texas in the US. In a new paper, he tests a novel but simple strategy to help brands retain their most valuable devotees in the wake of moderate controversies. 

“Everything in marketing is about promoting the brand, creating positive attitudes,” he says. “But now, another whole area is brand defence. How do we protect ourselves against the obvious attacks that we might get?” 

Hoyer’s research, with co-authors Omar Merlo and Andreas Eisingerich of Imperial College London, builds on prior studies whose findings might seem paradoxical: By intentionally exposing customers to weak negative news, a brand makes them less likely to abandon it (the brand) in future, even when worse news emerges. 

What would happen, the researchers wondered, if they tweaked the concept? Expose customers to the general idea of bad news rather than anything specific. Would it have a similar effect, strengthening their brand loyalty while also being more palatable to businesses? 

To test this hypothesis, they surveyed more than 1,100 postgraduate students and online volunteers about three of the world’s biggest brands: Amazon, Facebook and Nike. 

In each study, respondents were asked about their future intent to purchase or use the brand,. From there, they were split into three groups: 

• A ‘bad news’ group was asked to rank agreement with statements such as “My relationship with Amazon is not affected by negative information about it”. 

• Members of a second group ranked their overall attitudes toward the brand, from dislikable to likable. 

• A third, which served as a control group, was asked no additional questions. 

All three groups started with similar levels of purchase intention. A week or two later, they were given specific items of moderately negative news. The news was fictional for Amazon and Nike, and real in the case of Facebook – an attack by Apple on its user privacy practices. 

Respondents were then asked again about their purchase and usage intentions. The results were consistent across the three studies. Those in the ‘bad news’ group, who had been asked about resistance to negative news, were far more likely to keep using the brands than members of the other two groups. 

Why? Hoyer points to a well-established concept called the ‘measurement effect’, in which measuring people’s intentions can affect their subsequent behaviour. 

Asking customers how they would respond to hypothetical negative information creates cognitive dissonance, he explains. They may resolve it by thinking of all the things they like about the brand. That process reinforces those positive beliefs and makes them more readily accessible in the future. 

The immunising effect works only with customers who already have some level of affinity for a brand, he adds. “It’s just reinforcing existing attitudes and could even make them stronger. This won’t work on people who have no positive feelings.” 

But the most loyal customers are precisely the ones whom brands should obsess about retaining, Hoyer says.  

Many marketers already survey customers, such as loyalty programme members. So, it would be relatively simple to add a few questions about their resilience to negative information. 

The study is published in the Journal of the Academy of Marketing Science.