Negative WordofMouth by Dissatisfied Consumers A pilot Study

Negative Word-of-Mouth by Dissatisfied Consumers: A pilot Study Antoine Riprêt Tom Tenenbaum Lesueur Monica Tye Andrea Vindiola Alexis Alfroy Baptiste Mulliez #Viral. Marketing. Questions

What is Word of Mouth? • WOM is the passing of information from person to person by oral or written communication • In marketing, WOM is an unpaid form of promotion—oral or written—in which satisfied customers tell other people how much they like a business, product, service, or event. • If customers are dissatisfied they can create negative WOM, telling others about their bad experiences with a company, product or service.

5 principles of WOM In the case of the WOM, the message has to be: • • • Credible Repeatable Social Respectful The impact must be measurable • In the case of the NWOM, the rules are the same. • i. e. : broken bike chain

Your point of view

The dissatisfaction proccess Hirschmann (1970) Various possibilities when a customer is dissatisfied – Complain to the supplier (voice) • Loyal => Voice • Unloyal => exit – Exit (to another supplier) • Exit costs • Customers loyalty works as a barrier to exit – WOM (talk negatively to friends and relatives) – Some people don’t do anything

Example of Negative Word-of Mouth • British Airways lost customer luggage • He spent $1, 000 for his tweets to be promoted • The tweets could be seen by more than 300, 000 followers of British Airways

Findings in negative WOM • WOM and Problem Severity As the severity of the problem associated with dissatisfaction increased, the tendency to engage in negative WOM increased. • WOM and Attributions When the greater the blame for dissatisfaction is placed on marketing institutions than on the consumer, there will be more WOM.

Findings in negative WOM • WOM and Retailer Responsiveness Individuals who have low confidence in the effectiveness of making complaints are more likely to tell others about their dissatisfactions than those expecting remedy The more negative a customer’s perceptions of retailer responsiveness to complaints, the more likely the individual is to engage in negative WOM.

Issues of negative WOM • A customer would better want to express his dissatifaction than his satisfaction. • Words used and implication of the consumer might be stronger in negative WOM than in positive (strong feelings involved) • Negative word of mouth has a bigger impact on the person that hears it than positive • Fake WOM (Yelp, Trip Advisor, etc…)

Influence of negative WOM on diffusion of innovation • NWOM of innovators and specialists influence followers àAvoid NWOM especially at the begining • NWOM would be less critical if done during the majority of difusion

Antecedents to satisfaction with service recovery from W. Andreassen (1998) • Managment discovers the organization’s inability to satisfy customers via: q Exit customer stops buying q Voice complaints • Service recovery: When companies respond to dissatisfied customers’ complaints. • Service failure triggers negative affect and emotions in the customer • Service recovery is needed to change these to positive ones • FINDINGS: q Low expectations encourage positive disconfirmation: POSITIVE AFFECT AND EVEN WOM q High expectations encourage negative disconfirmation: NEGATIVE WOM, NO REPURCHASE

Conclusions and Implications If minor dissatisfaction experienced • Consumer’s responses are minimal • Neither complain or spread negative WOM If dissatisfaction is serious: • Consumers complain If complaints are encouraged: Retailer can remedy the situation Win back a customer who may also make positive reports to others Even if complaints are not completely settled, the customer is more likely to repurchase than if no complaint is made.

Conclusions and Implications If complaints are discouraged: - Fewer consumers complain – These may tell others of their unsatisfactory experience – May not repurchase in the future NEGATIV E WOM There will be some deffects and dissatisfied customers, but the way management deals with these dissatisfactions can have important impacts on brand store image. -Detailed warranty -Complaint procedures information on labels -Toll-free telephone numbers to receive complaints -Store signs -Positive employee attitudes May avert WOM and may even create positive WOM

Conclusions and Implications Consumer perceptions of institutional responsiveness depended on which product was the source of dissatisfaction • Perceived responsiveness for complaints about appliances was lower than for clothing items – More expensive to remedy a dissatisfaction concerning an appliance – Retailers may be reluctanct to make these expenditures and make complaint procedures difficult