The warning comes after a study published in the journal of the Institute for Operations Research and the Management Sciences (INFORMS), which examined the history of compliments and complaints by several hundred consumers on Twitter and company responses.
Led by Professor Liye Ma from the University of Maryland, the research team found that on one hand, addressing complaints on social media does improve customer relationship with the company.
On the flip side, however, it also increases customers' expectations to receive help, and makes customers more likely to speak up in the future. That is, responding to complaints has the downside effect of encouraging even more complaints, said the team.
"People complain on Twitter not just to vent their frustration," said Ma. "They do that also in the hope of getting the company's attention. Once they know the company is paying attention, they are more ready to complain the next time around."
Ma added that what people say about a company on social media does reflect their true perceptions, but only to a certain extent:
"There are also other important factors that affect what they say, the company's past responses to complaints being one of them,” she said. “This is a key takeaway for understanding and managing service interventions on social media."
'double edge sword'
The team used a dynamic statistical model to investigate both how consumers' relationships with the company evolve and how they decide whether to compliment or complain.
Accounting for both aspects turned out to be crucial in revealing these opposing effects of social media complaint management, said the team.
"Social media is a double edge sword - companies need to watch out and weigh the plus side against the down side for marketing and service interventions," said professor Sunder Kekre from Carnegie Mellon University.
“The viral effects of social media need to be unlocked and leveraged to harness the state of the art in marketing science."
The team noted that despite the side-effect of encouraging further complaints, addressing complaints is still worthwhile, in fact they said that improved customer relationship from such effort outweighs any downside of encouraging more complaints.
However, if companies only look at what customers say on social media without recognizing this "squeaky wheel" effect, they will underestimate the effectiveness of their service intervention, the authors warn.