Study: ‘Ghosting’ Customers Leads to $2.4 Billion Loss in Retail Sales

Study: ‘Ghosting’ Customers Leads to $2.4 Billion Loss in Retail Sales

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Even if you haven’t heard the term “ghosting” before, you’ve almost certainly experienced it.  Ghosting, or ending a relationship by suddenly withdrawing from all communication, is the exact opposite of what brand marketers are going for when they work to cultivate and deepen their relationships with customers. And yet, according to a new study, by SOCi,  it’s a practice that’s happening with increasing regularity, with the average brand ignoring 54% of online feedback, reviews, and questions posted on platforms like Google, Facebook, Instagram, and Yelp.

“Unfortunately, this is a bit of an overlooked area in marketing … We see evidence of it when we look at the numbers — more than half of all feedback basically gets left unanswered,” says SOCi CMO Monica Ho. “We’re hopeful that our report, shedding light on the impact ghosting has on brand equity, discoverability, and, most importantly, revenue growth, will give the industry a much-needed wake-up call.”

When it comes to ghosting, identifying the problem is easier than finding the root cause. 

Ho says the issue likely stems from the fact that there’s no one-size-fits-all playbook for multi-location brands on how to handle feedback across so many unique platforms, and that scaling that kind of responsiveness across multiple platforms can be a real challenge for brands with limited budgets. However, SOCi’s numbers show that there’s a lot at stake.

According to the data, ghosting shoppers leads to $2.4 billion in annual losses for the U.S. retail industry, with $58,000 in sales lost per store location.

In an audit of 588 retailers across 39 industry categories, researchers found that the average brand ignores more than half of online feedback, reviews, and questions posted online, along with an incredible 92% of customer questions posted on retailer Google profiles.

Failing to address complaints or questions, or not thanking consumers for their feedback, can lead websites dropping in search rankings, or falling prey to “digital invisibility.” 

Search engines consider engagement factors, like query, feedback, and review responses in their algorithms when ranking online listings, and Ho says actively engaging with customers and being responsive is one of the smartest things retailers can do to optimize their rankings.

Ho is hopeful that understanding the negative impact of ghosting will encourage brand marketers to take a more active role in responding to online queries, and that the industry at large will start leveraging more innovative technology solutions to respond to consumer engagements happening in search, social, and ratings websites.

“Managing these critical consumer engagements in a timely and efficient manner across multiple platforms for hundreds to sometimes thousands of locations have gotten very complicated without the right processes and technologies,” Ho says. “Add to this the lack of education at both the local store and corporate level on the importance and value of these engagements in not only building strong customer relationships, but their ability to propel a brand’s digital visibility above that of their competitors, which is key in driving more traffic and local sales.”

She also suggests that companies look at implementing automation where possible to improve the efficiency of their local visibility efforts. Generative AI has the potential to help brands with their localized marketing optimization at scale. As time goes on, it’s likely that more martech platforms will integrate the technology to perform repeatable tasks, like responding to local reviews or social engagements.

“The first step is to stop ignoring the elephant in the room,” Ho says. “If you’re giving your customers the silent treatment, you’re not just hurting your brand loyalty, you’re also missing out on potential sales.”

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.