Consumer complaints: advice on how companies should respond based on an empirical study

Research with the aid of college students shows that a firm's manner of answering customers' mailed-in complaints can greatly affect its reputation. Ignoring complaints causes erosion of company image. A written response to complaints maintains the corporate image while a letter-with-a-free-good response enhances the image. This suggests that companies should adopt a defensive marketing strategy since losing customers could prove to be more expensive than trying to keep them. For one thing, dissatisfied customers often circulate negative word-of-mouth advertising for the firm.