Customer service can now be delivered through social media channels (Social CRM) in addition to traditional closed channels like feedback forms (closed in the sense that the issues described are not made public). But there are benefits and costs to using social media as a channel for receiving complaints.
Complaints voiced on social media about a product might greatly affect a potential customer’s decision to buy the product. So, brand owners have a clear incentives to respond to and resolve complaints on social media.
On closed channels like call centers or customer service email addresses since there is no danger of negative feedback being seen by and influencing another person’s buying decisions.
So, social media gives users a greater bargaining power compared to traditional complaint channels. This gives brand owners one more incentive to resolve complaints – it is no longer just a question of a complainor’s satisfaction, but also of an unknown potential buyer’s impressions of the brand.
So, there is a clear incentive for firms to respond to customer complaints on social media channels.
However, a recognition of the greater bargaining power on social media combined with the greater ease of voicing a complaint on a social media channels might give users an incentive to choose social media channels instead of closed channels to voice negative sentiments.
So, if a service provider does not listen and respond to complaints voiced on social media, there might just be fewer expressions of negative sentiment on social media in the first place.
So, you can argue both for and against using social media channels to handle customer complaints. In this whitepaper we attempt to study the opposing motivations using game theory.