Tag Archives: Word of Mouth

The differential impact of brand loyalty on traditional and online word of mouth: The moderating roles of self-brand connection and the desire to help the brand

March 11, 2018 403735sr Leave a comment

As we all might know, word of mouth (WOM) plays a significant role within the business field. Indeed, a popular refrain is mentioned by Merlo et al. (2014, p. 82) that “word of mouth is associated with increased customer loyalty”. Several studies (Matos & Rossi, 2008; Watson et al., 2015) have also confirmed this by their research on the relation between customer loyalty and WOM. In this paper, the authors went one step further in this aspect, and investigated how the relation between loyalty and WOM is ‘’affected by the shift from offline to online communication channels and from traditional, face-to-face conversations (i.e., in-person WOM) to online WOM(i.e., eWOM)” (Eelen, Özturan & Verlegh, 2017).

The authors conduct 4 studies in this paper. For the first study, they conduct a survey with regards to ten preselected consumer packaged goods (CPG) brands among 1061 consumers. They follow up with three experiments. In these experiments, they acquired a total of 1473 participants from Amazon MTurk that participated.

For the first experiment, the second study they conducted, the authors replicated the survey. This time however, instead of measuring they tried to manipulate brand loyalty and self-brand connection by asking participants theirselves to come up with brands they could think of.

The second experiment, the third study the authors conducted, focused on loyal consumers and their intentions to engage in in-person WOM and eWOM. The intentions were linked to their perceptions of social risk and psychological benefit. Lastly, the third experiment, the fourth study that was conducted, investigated the actual eWOM behavior of the participants (Eelen et al., 2017).

The findings of the article show that brand loyalty is positively related to word of mouth for CPG products, however, they also indicate that this relation is much weaker for eWOM than for in-person WOM. Another finding was that it appeared that loyal consumers were more willing to engage in eWOM, if there was a self-brand connection present. The last finding was based on the actual eWOM behavior, which indicated that consumers could be motivated to engage in eWOM if they were told that this would be helpful for the brand. It turned out that this approach was effective for loyal consumers, but not for the occasional users (consumers) of a brand (Eelen et al., 2017).

These findings may have several managerial implications. First of all, it provides marketers and brand managers with new insights. As these findings already implied, marketers and brand managers could consider an actionable strategy for stimulating their loyal customers to spread eWOM. Moreover, two specific types of motivation are considered when thinking about tackling this issue. First, the brands could link their customer engagement programs to the consumers’ need for self-presentation. Secondly, it could be done by strengthening the consumers’ identification with the brand. Additionally, brands could also provide customers with several eWOM tools that make it more applicable when the brand is top of mind (think of after purchasing etc.). Lastly, as can be concluded from the paper, that there was a positive relation between eWOM and the use of online media. Marketers may also think of targeting the customers that make heavily use social media, but are not necessarily brand loyal (Eelen et al., 2017).

A good example made in the article itself, was when the business Nutella, was able to organize an online action where its customers could design their own Nutella Jar. The customers were especially people who used social media a lot, but were triggered to also buy the brand, because they had to visit a store and purchase the jar of Nutella first before they could use the label (Eelen et al., 2017).

The article finds its strength in conducting a research that looks into the products side of in-person WOM and eWOM, instead of the service business. As it is also mentioned in the article, a lot of study has been done on the service business (58) but just a few on the product side (8). Another strength of the article would be the several manipulation checks and in-differences methods, to increase the robustness of the findings. Lastly, the article is able to present convenient managerial implications and theoretical contributions (Eelen et al., 2017).

Now, when considering the weaknesses of the article, one of the most notable would be the fact that the authors tend to fail on exploring more possible differences between subtypes of eWOM. When thinking about the different online channels possible, e.g. Twitter vs. Facebook vs. brand site itself vs. store platform for reviews etc., these channels could all have different implications and customer usage of eWOM. To understand the differences more, the article could have studied the various dimensions that underlie these differences of the channel. Therefore, better insight could have be given to marketers, based on more specific channels for usage, also on which is more effective than the other (Eelen et al., 2017).

Eelen, J., Özturan, P., & Verlegh, P. W. (2017). The differential impact of brand loyalty on traditional and online word of mouth: The moderating roles of self-brand connection and the desire to help the brand. International Journal of Research in Marketing, 34(4), 872-891.

Watson, G. F., Beck, J. T., Henderson, C. M., & Palmatier, R. W. (2015). Building, measuring, and profiting from customer loyalty. Journal of the Academy of Marketing Science, 43(6), 790–825. http://dx.doi.org/10.1007/s11747-015-0439-4.

Merlo, O., Eisingerich, A. B., & Auh, S. (2014). Why customer participation matters. MIT Sloan Management Review, 55(2), 81–88.

de Matos, C. A., & Rossi, C. A. V. (2008). Word-of-mouth communications in marketing: A meta-analytic review of the antecedents and moderators. Journal of the Academy of Marketing Science, 36(4), 578–596. http://dx.doi.org/10.1007/s11747-008-0121-1.

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Which is Worse; the Product or the Reviewer? The Effect of Word of Mouth Attribution on Consumer Choice

March 11, 2018 adrazilovic Leave a comment

It is no surprise that the consumer purchase environment has changed with the rise of the internet. Next to the fact that consumers don’t need to leave their house, can choose between a much larger (international) assortment of products, they are also exposed to significantly greater levels of information; consumer reviews, in particular. Nowadays, consumers have access to a large amount of word-of-mouth (WOM) – expressed in online consumer ratings – to make better informed purchase decisions (He & Bond, 2015).

Consumer Review Characteristics
He & Bond (2015) in their paper named ‘Why is the Crowd Divided? Attribution for Dispersion in Online Word of Mouth’, identified this phenomenon and they chose to focus not only average rating score, but also rating distribution. They authors built a framework that argues that when consumers are exposed to dispersed WOM, they attribute the dispersion on either product performance or reviewer characteristics (He & Bond, 2015). To extend existing literature further, He & Bond (2015) attempt to predict the attribution by looking at taste similarity.

High Distribution

Low Distribution

Figure 1: High and low distribution example (Source: He & Bond, 2015)

Attributions for Dispersion
He & Bond (2015) argue that when consumers are aware of WOM dispersion, they will attempt to find an explanation. In principle, explanations behind dispersion can vary greatly. However, overall people’s attributions of the cause of WOM can be categorized in two ways: (1) product sources, or (2) reviewer characteristics.

Consumers could one one had attribute the cause of WOM to product sources – performance, in particular (He & Bond, 2015). However, different consumers might simply value product attributes differently, resulting in different reviews for the same product (He & Bond, 2015). Folkes (1988) indeed found that negative WOM is oftentimes perceived by consumers as incorrect product usage by the reviewer, rather than the product performance.

I hear you asking: when do consumers attribute WOM to a product source and when to reviewer characteristics?
The authors raise the principle of taste similarity. They argue that when consumers read WOM, they judge how similar the reviewers are to each other (He & Bond, 2015). When there is a high consensus (low dispersion) consumers are more likely to attribute the WOM to product sources (He & Bond, 2015). Alternatively, when consensus is low, consumers might be more likely to attribute WOM to reviewers (He & Bond, 2015).

Consequences of Attribution
When consumers attribute high-dispersion WOM to product performance, this might induce performance uncertainty, possibly resulting in a negative customer response (He & Bond, 2015). This effect might be less prominent with WOM attributed to reviewer characteristics and might even be beneficial to consumers to learn about their own preferences (He & Bond, 2015).

Based on the above, the authors formulated three hypotheses:
H1: The negative influence of WOM dispersion on product evaluations is stronger for
taste-similar domains than for taste-dissimilar domains.

H2: The moderating influence of taste similarity on product evaluations is mediated by attributions for WOM dispersion.

H3: The moderating influence of taste similarity on effects of WOM dispersion will be stronger among consumers with greater openness to experience.

Figure 2: Conceptual Model (Source: He & Bond, 2015)

Method
The authors conducted four studies. Study 1 examined the effect of dispersion and product domain on consumer choice (He & Bond, 2015). Study 2 measured the effect of dispersion on attribution and purchase intention. Study 3 investigated the effect of different taste similarities within a product domain. Lastly, study 4 examined whether people that are open to new experiences react more positively in cases of high dispersion and taste dissimilarity.

Figure 3: Experimental Conditions Example (Source: He & Bond, 2015)

Findings
All hypotheses were supported. Consumers were more willing to accept dispersed WOM when the product domain was represented by dissimilar tastes (He & Bond, 2015). Also, the second experiment revealed that participants preferred low dispersion, but were much more tolerant of dispersion in product environments with dissimilar tastes. Furthermore, study 2 proved taste similarity was indeed responsible for the attribution process by which consumers attribute WOM to either product or reviewer. Study 3 revealed that when consumers know tastes are dissimilar in a product domain, negative attitude towards the product will drop, whereas negative attitude will increase when they perceive the tastes to be similar (He & Bond, 2015). Finally, study 4 revealed that participants with a low level of openness had lower product evaluations on average. Participants high in openness were more positive about WOM dispersion, given dispersion was attributed to reviewer characteristics (He & Bond, 2015).

Strengths & Weaknesses
One strength of this paper is that it takes a new approach to explaining consumer reaction on WOM dispersion. Where previous literature focused on reference dependence as explanation of negative consumer response (uncertainty increase), this research takes it back a step and provides understanding of how consumers actually perceive the WOM by explaining their attribution process. Also, taste similarity was not included in any prior research, while He & Bond (2015) proved this to be an important mediator. Furthermore, the authors highlighted that where reference dependence argues dispersed WOM is mostly negative, this is not always the case (He & Bond, 2015).

A limitation is that all experimental conditions showed consumer reviews on a 10-point scale. The authors do not test whether the found effects are still present in different length scales. For example, consumers might perceive responses on a 5-point scale as dispersed more easily, as the values are closer together. If the majority of people is very high up in the 10-point scale and then 1 individual gives a 1-star rating, this might have less effect than with 5-point scales. The authors themselves identify the possible effect of different WOM dispersion perception with different physical appearances of the scales (He & Bond, 2015; Graham, 1937). The authors could create more experimental conditions where they also alter scale length, to better the generalizability of their study, as not every company uses the same scale length.

Furthermore, the authors took into consideration similarity between reviewers, but not similarity between the consumer and the reviewers. The results might possibly differ if the consumer finds out the reviewers are drastically different from him/herself (or very similar). An improvement could be to include experimental conditions where the ‘average reviewer profile’ is described, so people could judge how similar they are to the reviewers – and of course explicitly state this to make it measurable.

So, now that you know more about review scales; on a scale from 1 to 10, how likely are you to interpret the reviews the same way as you did before reading this post?

References
Folkes, V. S. (1988). Recent Attribution Research in Consumer Behavior: A Review and New Directions. Journal of Consumer Research, 14(4), 548 – 565.

Graham, J. L. (1937). Illusory Trends in the Observations of Bar Graphs. Journal of Experimental Psychology, 20(6): 597 – 608.

He, S. X. & Bond, S. D. (2015). Why is the crowd divided? Attribution for dispersion in online word of mouth. Journal of Consumer Research, 41(6), 1509 – 1527.

Continue reading Which is Worse; the Product or the Reviewer? The Effect of Word of Mouth Attribution on Consumer Choice →

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Attitude Predictability and Helpfulness in Online Reviews: The Role of Explained Actions and Reactions

March 11, 2018 tedbolsius Leave a comment

Introduction

Online word of mouth (WOM) reviews are becoming increasingly important for both consumers and firms. Different types of reviews for different kinds of products can have an impact on the ultimate purchase decisions of the review readers. This paper focusses on the linguistic content, also called explanation type, of the online WOM reviews by focusing in what way review writers explain their ‘actions’ or ‘reactions’ to certain product types.

Background

The article makes a distinction between utilitarian products and hedonic products and the distinction between explained actions (‘I chose this book because..’) and explained reactions (I love this book because..’). Utilitarian products are bought out of necessity and exhibit more cognitive and functional attributes, whereas hedonic products are primarily more luxury products exhibiting more emotional and sensory aspects. Therefore, a compatibility between explanation types (explained actions vs. explained reactions) and products types (utilitarian vs. hedonic) is suggested.

It is hypothesized that review readers find explained actions more helpful for utilitarian products and explained reactions more helpful for hedonic products, because of an increase in the ability to make their attitudes towards the product more predictable. Thereby, increased attitude predictability and review helpfulness will increase the ultimate product choice of the review reader (see figure 1). Increased attitude predictability makes individuals more certain of how they will like the reviewed product. Whereas review helpfulness increases the level of understanding of the product and being able to better assess to products due to having read the review. As mentioned before, an increase in the two above mentioned variables will most likely also increase sales, which is interesting from a managerial point of view.

Schermafbeelding 2018-03-08 om 11.11.48

Results

The main hypothesis is tested along five different studies, each having a different set up and focusing on different aspects.

Study 1
The first study provides insights in whether review readers favor – and review writers provide – different explanations across products types. Reviews from different books, both nonfiction (utilitarian) and fiction (hedonic), were gathered from Amazon and studied. It was found that nonfiction reviews included more explained actions sentences and fiction reviews contained more explained reactions sentences, they were also found to be more helpful, in line with the hypothesis (see figure 2).

Schermafbeelding 2018-03-08 om 11.38.25

Study 2
The second study was done through AmazonTurk and 132 participants were assigned the role of review writer or reader and had to fill out the blanks in reviews for certain product types. They found that product type significantly influenced the sentence choice, as predicted. Nonfiction reviews contained more explained actions, whereas fiction reviews contained more explained actions.

Study 3
159 Participants from a panel had to imagine writing a review about a photo camera for professional use (utilitarian) or fun (hedonic). It was found that participants chose more explained actions for the professional camera and more explained reactions for a camera used for holidays. Review readers perceived these explanations also as more helpful. This study also proved that the hypothesis holds in a different product category.

Study 4
Study four finds that explained actions allow review readers to better predict their attitude towards utilitarian products, whereas explained reactions increase the attitude predictability for hedonic products. Thereby, increase in attitude predictability increases the likelihood of buying the product by the review reader.

Study 5
The last study finds that review readers prefer explained actions for utilitarian products and explained reactions for hedonic products, as this increases attitude predictability. In turn, increased attitude predictability increases review helpfulness and the intention the purchase the products.

Strengths & Weaknesses

As the article dives into the aspect of the linguistic features of WOM, it contributes valuable information to the existing literature. One of the strengths of the article is that it tests its assumptions in different set ups and through different channels. This enhances the reliability of the study and its findings. Thereby, the implications provide helpful managerial insights for consumers and marketers. By knowing what kind of specific language is used and perceived as most helpful in WOM, online retailers can encourage review writers to write with the most desired linguistic features in order to boost sales.

Although the research focusses on explanation type, the explanation content can also be very valuable, especially when consumers are deciding on particular product specifics or choosing between similar products. Thereby, the article assumes that ‘attitude prediction’ and ‘review helpfulness’ both influence the product choice and purchase intention. However, other variables such as price, perceived brand perception and many others variables can influence whether people buy the product or not, this is however not considered in the article. Thereby, purchase intentions can yield significantly different results in real life, as real purchasing decisions can differ from the intention of purchase. This could have been tackled by monitoring real life purchasing decisions, instead of asking for purchase intentions.

Conclusion

In conclusion, the linguistic features in WOM reviews are very important when it comes to utilitarian and hedonic products, as each category requires different explanations types, as to be viewed as most helpful and increase likeliness of product choice. This research clearly states that explained actions are most valuable for utilitarian products and explained reactions are most valuable for hedonic products. Further research in this field of WOM can increase the implications for both consumers and marketers, as to increase satisfaction and sales.

Reference

Moore, S. (2015). Attitude Predictability and Helpfulness in Online Reviews: The Role of Explained Actions and Reactions. Journal of Consumer Research, 42(1), pp.30-44.

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How communication channels impact word of mouth

March 5, 2017 aradavording Leave a comment

Word of mouth has become an important aspect of marketing. More specifically, word of mouth marketing is the most trusted form of marketing among consumers. According to Nielsen – a leading global provider of information and insights into what consumers watch and buy, 92 percent of consumers trust word of mouth and recommendations from friends and family above all other advertising forms (Nielsen.com, 2012). Moreover, there are different channels through which word of mouth can be communicated. Examples of communication channels include social media, e-mail, face to face, or instant messaging, to name a few. Berger and Iyengar (2013) aimed to study the effects of how the communication medium can shape the message of word of mouth.

The main aim of their study was to uncover whether self-enhancement motives (i.e. wanting to seem cool or smart) and synchronicity (i.e. level of delay between the statement and response) of the communication channel impacts the brand or product being discussed. Furthermore, the authors distinguished the communication channels according to their modality (i.e. spoken or written). After conducting five related studies – three experiments and two field studies, the authors found that modality in fact influences what is discussed. Writing rather than oral communication leads to more interesting products and brands being mentioned. Regarding the impact of synchronicity, the studies showed that the asynchronous nature of written communication allows for greater construct and refinement of the discussion. Furthermore, asynchrony provides the opportunity to self-enhance, which in turn affect topic selection. On the other hand, when consumers have very little time to construct and refine their message (e.g. in oral communication), or have little urge to self-present, accessibility drives the topic of discussion. In these situations, consumers are more inclined to mention brands or products that are top of mind, regardless of how interesting these brands or products may be. (Berger and Iyengar, 2013)

In summary, these findings indicate that written word of mouth is the communication channel that naturally leads to the discussion of more interesting brands and products. This includes written discussions in blog posts, online reviews, and social networking sites, among others. The findings of this study are more relevant for explaining consumer behavior, however some managerial implications can be considered. Taking these findings, and the aforementioned fact that word of mouth and recommendations are regarded as the trustworthiest marketing channel, into account, impacts companies’ word of mouth strategy. Corporate blogs, in which employees interact with consumers in a more informal setting, have been around for a while, and many companies have attempted to launch viral campaigns, in order to stimulate word of mouth among consumers. However, some of these viral campaigns have caused backlash. For instance, McDonalds attempted to stimulate word of mouth by asking their followers on Twitter to share their #McDStories. However, this did not pan out the way they expected, as one user tweeted the following #McDStories:

All in all, it is important for companies to carefully consider their word of mouth marketing campaigns, as online communication channels have allowed for more elaborate and witty responses among consumers. This links back to the theory suggested by Berger and Iyengar (2013) that written communication channels provide consumers for better construct and review of their statement. Despite good intentions, a campaign can always pan out differently, as #McDstories has showed.

References:

Nielsen.com. (2012). Nielsen: Global Consumers’ Trust in ‘Earned’ Advertising Grows in Importance | Nielsen. [online] Available at: http://www.nielsen.com/us/en/press-room/2012/nielsen-global-consumers-trust-in-earned-advertising-grows.html [Accessed 5 Mar. 2017].

Berger, J. and Iyengar, R. (2013). Communication Channels and Word of Mouth: How the Medium Shapes the Message. Journal of Consumer Research, 40(3), pp.567-579.

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Sephora’s community looking beautiful

March 11, 2016 376833ml Leave a comment

Nowadays the way we market things have become incredibly different with the digital transition. What is noticeable about this transition however is that word of mouth has always played a role. In the past people used to talk to each other and give advice or opinions on products and services. The same happens now too, but in a different way, as we all seem to search for products online and therefore the interaction takes place online as well.

Continue reading Sephora’s community looking beautiful →

Business Case

Increasing sales? Focus on word of mouth marketing is not enough!

May 2, 2015 343924mb Leave a comment

Coolblue is an online retailer in the Netherlands and Belgium. They started in 1999 and now have 332 specialized webshops and 7 physical shops in the Benelux. This makes Coolblue one of Netherlands biggest webshops. And they are doing quite good when looking at their awards: Best webshop in the Netherlands in 2011, 2012, 2013, 2015 and second place in 2014. Looking at their social media platforms they are performing well with an online fan base of more than 204.000 fans. In 2013, Coolblue was the highest entering company in the Best Social Media Award with a 3th place. In 2014 they even came closer with becoming NL’s best social media with a second place. On social media they perform outstanding, having great word of mouth marketing and looking at their growth in revenue with last year growth of 45% a TV campaign is an interesting step. In January 2015, Coolblue launched their first TV campaign. But why does Coolblue need a TV campaign while they have such good functioning social media platforms and became huge with word of mouth marketing?

In today’s world it is almost impossible to think about living without social media. Everybody knows or at least has some vague idea about what social media are, and at the same time almost everybody is involved in it daily. Facebook, Twitter, Instagram and so on are examples that will most likely ring a bell for practically everybody. If we look at Coolblue, they use their Facebook page in such a way that we can all watch and follow the company. Mostly it is used at keeping customers up to date and informed about new product, but they also use it to amuse their audience with entertaining content. With people who liked Coolblue’s social media content they want to use e-Word of mouth marketing to create more brand recognition. Brand recognition is a problem for Coolblue, which they can’t solve with word of mouth behavior only. Coolblue’s CEO Pieter said:’’ Untill now we have been growing for years with word of mouth marketing, but now it’s time to grow even faster with our new tv campaign. Then they can experience our service and products, and most of the time our customers are so impressed word of mouth behavior will follow automatically.’’ Also when we take a look at Google trend with Coolblue (blue) and their biggest competitors, Bol.com (red) & Wehkamp (yellow), we see that Coolblue is still way less popular.

If we look at their social media strategy nowadays their focus on social media platforms are on (professional) fans, and sometimes even a focus group within this fan base (Example: People who love cats). These fans are people who know Coolblue, already bought a product at Coolblue and experienced their service & delivery propositions. These fans show word of mouth behavior, but clearly it is not enough to become as big as their competitors if we look at brand recognition. Looking at this Coolblue case, word of mouth marketing (online & offline combined) can grow a company with cheap marketing. But if you want to become de biggest, you still have to invest in old fashioned marketing to increase brand recognition at the mass.

References
– http://www.coolblue.nl
– http://nieuws.coolblue.nl/coolblue-start-tv-campagne
– http://www.facebook.com/coolblue- http://www.google.nl/trends/explore#q=coolblue

Business Case

Word of Mouth and Social Media: The Case of Superdry

May 1, 2015 dedierstolk Leave a comment

Superdry is a clothing company that was founded in 2003. The owner of the company started with a cult clothing store in Cheltenham (United Kingdom) in 1985. In 2003 the founder decided to work together with a designer to create a new in-house brand: Superdry.

Although the company only existed for 1 year at that time, it started growing exponentially in a short amount of time in the year of 2004. What was the event that led to this exponential growth?

Social media and word of mouth played a great role in the quick success of Superdry. Superdry focused on creating a unique brand that was different from the mainstream clothing companies. The founder of Superdry made a gamble by sending some pieces to David Beckham, and hoped that he would get some media attention as a result of Beckham wearing his clothes in public. David Beckham was generous enough to wear his clothes, and this soon led to Superdry becoming a famous brand.

Alongside with the support of the celebrities Justin Bieber, Kate Winslet. Nicole Scherzinger and Zac Efron, people started recognizing Superdry. This enabled the interaction between the company and its customers, but also the interaction between customers. People that had seen the celebrities wearing Superdry started to talk to their friends about the brand. This word of mouth marketing proved to be really valuable for Superdry. Normally companies have to pay millions to let celebrities wear their clothes, but Superdry did not have to pay anything. It was all part of their word of mouth marketing strategy.

In general, there are three types of engaging consumers through social media and word of mouth: functional, social and emotional. For Superdry the most important type of engagement is social. Social engagement refers to people expressing their uniqueness to increase their reputation. You can probably imagine that people that had seen the celebrities wearing their clothes wanted to be as unique as the celebrities. This social type of engaging customers fits perfect with a word of mouth marketing campaign.

Superdry even launched a YouTube channel called SuperdryTV as part of their social media marketing: https://www.youtube.com/user/SuperdryTV.

On this channel Superdry promotes their clothing especially for niche markets, such as snow jackets or rugby clothing. By engaging with customers on social media their brand is more likely to be shared within these communities. Superdry solely focuses on this social media and word of mouth marketing, and makes almost no use of traditional forms of marketing.

I would say that Superdry has proven that social media and word of mouth can be just as valuable as traditional marketing types. Do you know any other companies that have been successful in these new types of marketing? Feel free to comment them.

Sources:

http://www.supergroup.co.uk/our-history
http://www.websitemagazine.com/content/blogs/posts/archive/2014/11/26/how-important-is-word-of-mouth-to-your-web-marketing-strategy.aspx
http://www.dailymail.co.uk/femail/article-1295553/Superdry–David-Beckham-Kate-Winslet-helped-trendy-label-grow.html

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Word-of-mouth: oral versus written

April 30, 2015 344068lb 2 Comments

Word-of-mouth has always been important. It has a crucial impact on customer behaviour. If someone recommends a certain product, it is more likely (more than 50%) that in the end this person purchases the product. Currently, it becomes even more interesting because the digital era makes it easier to communicate with each other. Nowadays there are more different channels you can use to spread the word easy and fast. Different channels of communication will influence the potential customer. But is there a difference between oral and written communication? Does the way of communicating affect a certain message? And could this be an opportunity for a company?

For me there is a difference in a way that written communication feels more anonymous. This is why I first thought that this would cause low-content and less interesting messages since people feel less responsible for their own messages. However, if I think a bit further I do think that in written communication someone feels also less social pressure to answer right away, which means that they have more time to think about their message. This could result in more refined, complex and interesting messages. At the same time written communication can feel more permanent (you cannot remove it easily) and the writer can be worried about the receivers’ expectations: e.g. my audience is expecting the world from me, now I have to live up to that by writing something really valuable. This is related to your online reputation.

Berger and Iyengar (2013) were curious and therefore did some research about the difference between oral and written communication and how this affects the content of the message. The results show that if there is more time to construct and refine a message (i.e. asynchrony), people will indeed talk about more interesting products and brands. Also a higher level of self-enhancement will support this effect. When there is enough time to construct and refine a message, people with a higher level of self-enhancement will take the opportunity to use this time to choose interesting products and brands to talk about.

Knowing the fact that asynchrony improves the interestingness of the message, written communication scores higher than oral communication. If someone asks you to tell something about a certain topic, you will feel the pressure to answer within a few seconds. You probably feel less confident about the topic and would tell more straightforward, less interesting and more accessible things. However, if someone asks you to write it down, the first thing that you probably think is: how shall I formulate this? What would be the most appropriate way? etc. There are immediately multiple things to think about before you are actually writing something down. You will give yourself more time to construct the message. This supports the research, which shows that in written communication interesting products and brand are mentioned more often.

But how could companies benefit from these findings? Companies want customers to talk about their interesting products and, as we have seen, written communication is an appropriate way to do so. At the same time there is an upcoming trend of digital communication: the impact of digital word-of-mouth is powerful because of reasons such as speed and its one-to-many nature. This means that companies should respond to this trend by investing in written communication platforms and a strategy for digital word-of-mouth.
People obviously prefer to talk about interesting brands. So in addition to supporting written communication platforms, companies should also give customers a reason to talk, evoke interest and surprise people by engaging, equipping and empowering customers. Like NikeSupport is doing with responding on conversations on websites (engage). These three E’s are important for building up a digital strategy and to make sure that customers are evaluating the brand as a more interesting one. Companies should take these insights into account to spread the positive word of mouth.

References:
Berger, J., & Iyengar, R. (2013). Communication channels and word of mouth: How the medium shapes the message. Journal of consumer research, 40(3), 567-579.

http://www.forbes.com/sites/kimberlywhitler/2014/07/17/why-word-of-mouth-marketing-is-the-most-important-social-media/

http://www.socialemailmarketing.eu/2010/05/wordofmouth-in-the-digital-age-introducing-wordofmouth-equity/

http://www.dotrising.com/2015/01/16/how-important-is-word-of-mouth-in-the-digital-age-infographic/

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Fire your sales team, Boost e-WOM participation!

April 26, 2015 luutwillen Leave a comment

Imagine, you’re on a birthday party without a mobile phone, tablet or laptop but you would like to have some information about a certain experience good because you’re considering a buy. I guess you might ask your friends or family relatives about their findings and opinions. Think again how you’re purchase decision looks like after they share a negative story about that related product….

In contrast with the traditional word of mouth ( face-to-face context ) , consumers use blogs, search engines, internet communities, social media, and consumer review systems to gather information and make informed purchase decisions. Due to the rise of internet and the development of phones, tablets or laptops, traditional word-of-mouth interactions are replaced/substituted by electronic word of mouth. So e-WOM, defined as “any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet” (T. Hennig-Thurau, 2003) is an important source used during the path to purchase or so called customer journey. Upon that, previous research conducted by Bickart and Shindler, show that customers actually pay more attention to the information provided by other customers rather than those of the salesperson or marketers because they have used the product and is considered as more trustworthy.

Understanding the importance of e-WOM, e-commerce sites attempt to encourage their customers to produce more e-WOM because consumer-produced information provides potential customers with a sense of trust. But how can firms (Online retailers), encourage their customers e-WOM participation, what are customers motivations and how does it affects e-Loyalty (customer loyalty in the internet market) ?

Research done by Yoo, C.H et al. in order to examine the impact of e-WOM participation on e-loyalty, has shown that both intrinsic and extrinsic motives have an impact on e-WOM participation. Specifically, it was found that internal motivation most influences customer’s participation (fig 2). Customer’s participation is operationalized as the actual level of involvement and frequency in e-WOM writing and reviews. Customers participation behavior does have a significant impact on formation of Site identification. Site identification can be devided in (1) Personal site identification; the extent to which a customer thinks the image of an online shopping site matches his/ her own image, and (2) Social identification which refers to the identification that a customer feels with respect to interactions, via the e-WOM system, with other customers on the same online shopping site.( C.H, Yoo, 2013)

e-WOM participation behavior enhances social identity among customers. Additionally social identity plays a role in using the e-WOM system. It is for this reason important to maintain an e-WOM system for customers so they can develop a strong social identity on the site through enhanced interaction with other customers.

Finally, both personal and social site identifications have a significant influence on customer e-loyalty. Remarking, that personal identification has a stronger impact on e-Loyalty.

Conclusive, based on the conducted research, when e-WOM is well managed, it was shown that it has positive effects on the customer evaluation of the company and on intentions to repurchase.

Created by : Luut Willen

References :

Bickart, R.M. Schindler, Internet forums as influential sources of consumer information, Journal of Interactive Marketing 15 (2001) 31–40.

Hennig-Thurau, G. Walsh, Electronic word-of-mouth: motives for and consequences of reading customer articulations on the internet, International Journal of Electronic Commerce 8 (2003) 51–74.

Chul Woo Yoo, G. L. (2013). Exploring the effect of e-WOM participation on e-Loyalty in e-commerce. Decision Support Systems :DDS (2013)

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Be famous and (dramatically) increase your number of followers!

April 26, 2015 360727mv Leave a comment

Only then you are credible…

I almost wanted to start with: “You cannot trust product tweets of celebrities…” But if that would be a surprise to you, I have some other shocking news to you: Santa doesn’t exist. However, if everyone knows the tweets are set up by the brands themselves, and the celebrities are paid for such tweets, why would brands still spent million dollars to celebrity social media product endorsement?

Opendorse did research to those product endorsement tweets: a tweet from Cristiano Ronaldo is valued $304.000(!) (See source beneath for more numbers). Note that this is the actual value of the tweet for the brand itself, so it does not say celebrities are really paid that amount.

As we know that those tweets are valuable and that it does not matter that we, actually, all know that those tweets are not “real”, what makes the “fake opinion/tweet credible to us, the consumer. That is what Jin and Phua investigated in 2014: “ Explicate the conditions under which celebrities can be leveraged as effective catalysts for brand-related E-WoM on Twitter.” They created semi-fictious celebrity twitter pages, where after they let students (east coast of US) fill in a questionnaire based on these profiles (which off course included a product endorsement tweet).

Jin and Phau found that high numbers of followers results in higher credibility of the celebrity (more physical attractive, trustworthy and competent). On top of that, positive brand tweets of a celebrity with a high number of followers results in higher product involvement/buying intention. This effect is strengthened in case of a prosocial celebrity. In contrast, a celebrity with a low number of followers does not effect product involvement.

(In order to differentiate between types of celebrity (prosocial/antisocial), participants read an article of the celebrity either engaged in charity work or involved in drug abuse and/or adultery scandal.)

On top of that, it is interesting that “we” are more willing to share a tweet if it is coming from a celebrity with a low number of users and if it is negative about a specific brand/product. Probably because we think that a tweet from someone with a high number of followers will be not new to our own followers.

Concluding, celebrities are more credible than ordinary users towards twitter users. If a brand wants to start with twitter celebrity marketing, they need to focus on the number of followers (not only because of the reach, but also because of the credibility) and the behavior of the celebrity. Maybe it would be even better to contact a not that well-know celebrity and let him upload a negative tweet about a competitor. It will be shared more often by other twitter-users, and then it will maybe get more attention.

However, we must not forget that a celebrity, who will promote a lot of products using twitter, will be less credible in the end. Besides, I doubt if everyone knows how much followers his or her followers have.

Then I got one last question to you: if you had to set up one celebrity tweet for Microsoft surface tablet, who would tweet what text, and tell me why? Besides, tell me why this tweet didn’t worked out well:

In turn I got one tip for Santa to be credible for old and young again: Open a twitter account and dramatically increase your number of followers… You are already famous!

Note: If you didn’t see Oprah’s mistake, take a look with what device she uploaded the tweet.

Seung-A Annie Jin & Joe Phua (2014) Following Celebrities’ Tweets About Brands: The Impact of Twitter- Based Electronic Word-of-Mouth on Consumers’ Source Credibility Perception, Buying Intention, and Social Identification With Celebrities, Journal of Advertising, 43:2, 181-195.

http://opendorse.com/blog/top-75-highest-paid-athlete-endorsers-2014/

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So Whaddya Think? Consumers Create Ads and Other Consumers Critique Them

April 25, 2015 349212jp Leave a comment

With the availability of online creative tools, consumers create ad-like communications on their own or in response to company contests. These consumer-generated ads (CGA) are like word-of-mouth (WOM) in that they are consumer-to-consumer communications, yet they have the look and feel of traditional advertising. Ertimur and Gilly (2012) examine consumer responses to both contest and unsolicited CGA and company ads using data gathered from consumers via netnography and depth interviews.

What makes CGA highly relevant for consumer researchers?
They allow consumers to communicate on behalf of (or in opposition to) firms and participate in creating brand images. The resulting ads constitute evidence of consumers perceptions of the brand as well as the firm. Consumers say they are more likely to be influenced by user-generated content (UGC) than by information coming directly from advertisers and marketers and that UGC outranks other forms of advertising in terms of gaining consumer trust.

The paper gave the example of a school teacher named George Masters, who in 2004 showcased the 60-second animated ad he had created for the iPod Mini by uploading it to his personal website. The video could have easily been mistaken for an ad produced by Apple. The unsolicited ad caught the attention of fans, bloggers, and marketers, and was viewed more than 500,000 times within a month. This is an example of a CGA.

With CGA, consumers create ads for products. Essentially, there are two types of CGA: 1) those solicited by companies through contests and 2) those created by consumers on their own. While unsolicited CGA are initiated as well as created by consumers, solicited CGA can be viewed as hybrid forms of content that are firm-initiated and consumer-created. With both types of CGA, consumers perform tasks that were previously handled by companies. Hence, this new type challenges the traditional view of advertising as a form of company-controlled communication.

Ertimur and Gilly (2012) found in their research that consumers respond to both types of CGA by engaging with the ad rather than the brand, much like an ad critic, while company ads elicit brand associations. Unsolicited CGA are seen as authentic, but not credible, while contest ads are seen as credible, but not authentic, revealing a boundary condition to the conventional view that authenticity leads to credibility.

I think that CGA will be more and more important for companies, because consumers have the availability to online creative tools. Companies should always be aware of this and make use of the CGA.

Reference:
Ertimur, B. and Gilly, M. (2012). So Whaddya Think? Consumers Create Ads and Other Consumers Critique Them. Journal of Interactive Marketing, 26(3), pp.115-130.

Articles

The different roles of product originality and usefulness in generating word-of-mouthcc

April 25, 2015 dedierstolk Leave a comment

Have you ever heard of a product that failed because it was so original? The authors of this article argue that the Newton PDA, launched by Apple in 1993, failed partly because of its originality. After some problems with the initial version of the Newton PDA, huge negative word-of-mouth was generated in a short amount of time. This negative WOM destroyed the Newton’s reputation permanently.

This research investigates if product originality can lead to negative WOM, which harms rather than promotes a product. The authors explore when and whether product originality can lead to negative WOM.

Word-of-mouth (WOM) is known as the passing of information from person to person by oral communication (the free dictionary). WOM consists of two attributes: amount (how much people talk about a product) and valence (if people talk positively or negatively about the product).

This paper explored how originality and usefulness of products has influenced the word-of-mouth about these products. The authors hypothesize that usefulness is a moderating factor for product originality and product success.

One of the most interesting theoretical parts of this paper is that the authors assume that negative WOM (as with the case of the Newton PDA) is created partly because of the originality of the product. I personally belief that the product features of an entirely new product category play a more important role, and that negative WOM is just a logical response to bringing a new product to the market that is not working as it should.

The most interesting practical part of this paper is that the authors use a wide range of products to test the usefulness of products, ranging from memory sticks to massagers and even furniture. To test their hypotheses the authors used three separate studies with students from their university.

I would argue that some individuals perceive the usefulness of a memory stick differently than others. One of the individuals might know a lot about computer equipment and therefore knows the potential usefulness of a memory stick, whereas another individual might not know a single thing about computer equipment and therefore does not know the potential usefulness. This might lead to a misperception about the perceived usefulness and the potential usefulness of a product.

I would therefore want to debate about the following statement: The authors should also take prior knowledge of the students about the products in to account. This will reduce the bias of the students towards certain products.

Source:

Moldovan, S., Goldenberg, J., & Chattopadhyay, A. (2011). The different roles of product originality and usefulness in generating word-of-mouth. International Journal of Research in Marketing, 28(2), 109-119.

Articles

Electronic Word of Mouth and Amazon.com

April 2, 2015 annedegroot123 Leave a comment

Figure 1: ‘Understanding’ online star ratings

Amblee and Bui (2011) have researched the effect of electronic word of mouth (eWOM) on the sales of digital microproducts. They studied amazon.com ‘shorts’: short stories (e-books) that are made available for a set price of 49 cents. They classify these shorts as digital microproducts.

This article focusses on their study on de effect of social commerce on product reputation and sales (hypothesis 1). Amblee and Bui (2011) studied this effect from three different perspectives: Valence (how positive or negative a rating is), the presence of a rating versus no rating and volume (thus the amount of ratings). Interestingly, they do not find a significant correlation between valence of the rating and sales. Amblee and Bui (2011) suggest that this might be due to the generally positive ratings, and thus a low variance between positive and negative ratings. Second, they also find that the presence of a rating is a good predictor of higher sales, as compared to no ratings. Furthermore, they also find a significant correlation between the volume of ratings and the volume of sales.

In their discussion, Amblee and Bui (2011) propose a better scoring system which allows users to score the e-book on different dimensions such as content, writing style and so on. While this suggestion might lead to a bigger variance between ratings, I wonder if it would have a positive effect on sales in the end. Amblee and Bui (2011) point out that the majority of past research on valence suggests that valence is not a reliable predictor of sales. However, by including more ratings to fill in like Amblee and Bui (2011) suggest, you might achieve a negative effect: that customers are no longer willing to fill in the rating. And the importance of the presence of the rating, and moreover the volume is exactly what is found to be so important to spark sales by Amblee and Bui (2011).

Fast forward to 2015. Did Amazon.com change the rating system? I went to Amazon.com and I filtered on short stories and on kindle editions. This is what I found:

Figure 2: Average customer review of shorts on Amazon.com, 2015

Figure 3: Layout of customer reviews of shorts on Amazon.com, 2015.

This shows that the great majority of the ratings is still very high (roughly 84% of the ratings are 4 stars or more). However, it seems like Amazon has added some space for customers to motivate their rating. Furthermore customers can also identify reviews as helpful, and Amazon shows me the most helpful reviews first. By using this system, Amazon.com leaves it up to its customers if they want to motivate their rating (and spend more time rating a book) or not. What do you think, has the system improved? Do you think it will lead to more sales? Please comment below!

References:

Amblee, N. and Bui, T. (2011) ‘Harnessing the influence of social proof in online shopping: The effect of electronic word of mouth on sales of digital microproducts’, International Journal of Electronic Commerce, Vol. 16, No. 2, pages 91-113, DOI 10.2753
Featured image: GTP Headlines, accessed 31-03-2015, http://news.gtp.gr/2014/11/25/amazon-com-launch-travel-service-enter-the-world-online-booking/
Figure 1: quora.com, accessed 01-04-2015 http://qph.is.quoracdn.net/main-qimg-80cd8d435bc1eed5a48d8732857f5aa7?convert_to_webp=true
Figure 2: Amazon.com, accessed 31-03-2015, http://www.amazon.com/s/ref=sr_nr_p_n_feature_browse-b_2?fst=as%3Aoff&rh=n%3A283155%2Cn%3A%211000%2Cn%3A17%2Cn%3A10300%2Cn%3A10307%2Cp_n_feature_browse-bin%3A618073011&bbn=10307&ie=UTF8&qid=1427828706&rnid=618072011
Figure 3: Amazon.com, accessed 31-03-2015,http://www.amazon.com/When-Fall-Love-Blue-Series-ebook/product-reviews/B00HE1PEZO/ref=cm_cr_dp_see_all_summary?ie=UTF8&showViewpoints=1&sortBy=byRankDescending