Factors influencing word of mouth effectiveness: receiver perspectives
The Authors
Jillian C. Sweeney, University of Western Australia, Crawley, Australia
Geoffrey N. Soutar, University of Western Australia, Crawley, Australia
Tim Mazzarol, University of Western Australia, Crawley, Australia
Acknowledgements
The present study was funded by an Australian Research Council Linkage Grant.
Abstract
Purpose – Word of mouth (WOM) is becoming increasingly recognized as an important form of promotion, particularly within professional services environments, where credence qualities play a critical role in consumers' choices. The present paper seeks to explore the factors that are likely to enhance the chances that receivers of positive word of mouth might be influenced by such information.
Design/methodology/approach – The study examines findings from six focus group discussions and 103 critical incident forms.
Findings – The findings suggest that the potential for WOM to impact on perceptions or on actions depends on the nature of the sender-receiver relationship, the richness and strength of the message and its delivery, and various personal and situational factors.
Research limitations/implications – The findings are tentative and based on a relatively small sample; however, they provide a useful framework for future research into the process of WOM.
Practical implications – The importance of WOM in marketing, particularly professional services marketing, is widely accepted; however, little is known about how to enhance its occurrence. The paper provides marketing managers with a better understanding of the factors likely to influence receivers of WOM.
Originality/value – Most WOM research focuses on the sender of WOM. In contrast this paper provides insights on the impact of WOM on the receiver, something that is currently a “black box” in the marketing literature.
Article Type:
Research paper
Keyword(s):
Services marketing; Consumers; Consumer behaviour.
Journal:
European Journal of Marketing
Volume:
42
Number:
3/4
Year:
2008
pp:
344-364
Copyright ©
Emerald Group Publishing Limited
ISSN:
0309-0566
Introduction
In an environment in which there has been a reduction in consumer trust of both organizations and advertising, as well as a decrease in television advertising, word of mouth (WOM) offers a way to obtain a significant competitive advantage (International Word of Mouth Marketing Conference, 2005). However, there has been very little research into this important topic. Further, little past research has focused on what happens when WOM is received (Bansal and Voyer, 2000; Gremler, 1994) or on the conditions in which WOM will be most effective in enhancing a receiver's perceptions or actions.
The important role WOM plays has been long recognized by diffusion of innovation researchers (e.g. Ryan and Gross, 1943), and has been acknowledged as the most important communication source between consumers (Derbaix and Vanhamme, 2003). At its core, WOM is a process of personal influence, in which interpersonal communications between a sender and a receiver can change the receiver's behavior or attitudes (Merton, 1968). The role that interpersonal communication plays in influencing opinions has also long been acknowledged by sociologists, who identified the importance of “opinion leaders” in this process (Katz and Lazarsfeld, 1955). The ability of individuals to influence other people's opinions is of particular interest to organizations seeking to market products and services, especially those marketing offerings that cannot be easily trialled prior to purchase (Rogers, 1995).
While the potential power of WOM as a form of promotion is generally accepted (e.g. Arndt, 1967; Buttle, 1998; Dye, 2000), it is important to understand that the generation of positive WOM is not sufficient for it to be an effective source of communication; the recipient also needs to react positively to the WOM. Merton's (1968) definition supports this dual process conceptualization of WOM. However, the majority of WOM research in marketing has focused on its generation (e.g. Harrison-Walker, 2001; Brown et al., 2005). The factors that improve the chances of a consumer acting on such advice and the changes in the recipient's perceptions and behaviour with respect to the focal organization remain less well understood. WOM is not homogeneous in its impact as people vary in how they react to WOM. Hence, an understanding of the factors that enhance WOM effectiveness would help marketers determine how to better harness WOM as a promotional and relational tool. (Wilson, 1991)
Further, previous studies have identified some positive, functional consumer outcomes of WOM. Since WOM is known to convey vivid novel experiences that are pleasant when positive and denigrating and complaining when negative (Anderson, 1998), WOM receivers may be affected emotionally as well as rationally; the present study was an attempt to improve our understanding of these factors.
WOM can play a particularly important role for service organizations, as intangibility makes the pre-purchase trial of services impossible (Berry, 1980; Zeithaml, 1981; Zeithaml et al., 1985). WOM is particularly important when services are complex or have high perceived risk (Berry, 1980; Zeithaml, 1981; Zeithaml et al., 1985) because it is seen as a highly credible information source as the sender is usually independent of the organization providing the service and is not seen to gain directly from advocating the service (Silverman, 2001). Thus, WOM may play a particularly significant role for those services that have high credence qualities, such as professional and financial services.
The present study therefore had three major objectives, namely:
- to identify the variety of receiver outcomes that follow WOM delivery about a service organisation;
- to identify the factors that are likely to enhance the chances of a receiver acting on such WOM; and
- to develop a conceptual model that relates to a consumer's experiences when receiving such WOM.
Before discussing the present study, however, a review of prior research is presented as it provided the foundation for the approach taken in the present case.
Literature review
Sociologists and psychologists have examined the impact of interpersonal communications on attitudes and behaviour for many years. For example, Hovland (1948) noted that social communication involved four factors, which he termed the communicator (sender), the stimuli (message), the receiver and the response. While each of these elements is worthy of research, Hovland (1948) noted that the receiver and their responses were the most difficult to study, while Hovland and Weiss (1951) highlighted the difficulty in measuring or controlling such diffusion. Nonetheless, given the well-established importance of WOM, it is surprising that so little research has been conducted on the topic compared with the more extensive domain of interpersonal influence, which was particularly prominent in psychology from the 1950s to 1970s.
Further, the majority of research addressing WOM has focused on its generation. The lack of attention paid to the effect of WOM has on receivers is surprising and represents a significant gap in research addressing WOM activity (Charlett et al., 1995; Bansal and Voyer, 2000). Moreover, studies that include WOM from a generation perspective, often use WOM as only one of several useful outcomes of another focal construct, such as service quality (e.g. Hartline and Jones, 1996; Parasuraman et al., 1988). Even recent studies that focused on WOM specifically, such as the investigation into word of mouth constructs by Harrison-Walker (2001) and the examination of WOM development by Brown et al. (2005) were focused on the WOM giver. The present study, in contrast, addressed the receipt of WOM, focusing on receivers' attitudes and behaviour and the factors that enhance such outcomes.
Outcomes of WOM
WOM has a strong influence on product and service perceptions, leading to changes in judgments, value ratings and the likelihood of purchase (Arndt, 1967; Fitzgerald Bone, 1995; Peterson, 1989). Martilla (1971) found that WOM was more important in the final stages of the purchase process as it reassured consumers and reduced post-purchase uncertainty. In earlier stages, customers were more likely to rely on impersonal communication. However, the primary impact of WOM, which may mediate these relationships, is on perceived risk. Positive WOM reduces risk during the evaluation stage of the consumer purchase cycle (Woodside and Delozier, 1976). WOM has been recognized as a key risk reducer for various forms of risk, including functional, time, financial, psychological and social (Roselius, 1971; Settle and Alreck, 1989). These risk types can usefully be classified into functional or financial risk, which is product-focused and concerns performance, and financial loss and social or psychological risk, which is consumer-focused and results from the consumer's interaction with their social environment (von Wangenheim and Bayón, 2004).
Perceived risk is inherent in many purchase situations, which explains why consumers like to undertake a pre-purchase trial. Services, however, are often indivisible and, hence, impossible to trial (Berry, 1980; Zeithaml, 1981; Zeithaml et al., 1985). This, along with their intangibility, heterogeneity, perishability and inseparability, leads to high-risk perceptions in service contexts (Mitchell and Greatorex, 1993; Murray, 1991; Zeithaml, 1981). Thus, as already noted, WOM is likely to be more important in service contexts.
Other outcomes are also likely. Research has suggested electronic WOM (eWOM), such as online customer forums, generates greater empathy, credibility and relevance, than does information generated by the organisation itself, such as through a corporate webpage, apparently because eWOM relates personal experiences and stories (Bickart and Schindler, 2001).
However, research on a receiver's psychological state following WOM is scarce. Balasubramanian and Mahajan (2001) showed customers participating in WOM, that is WOM senders, rather than receivers, obtained social and economic value from such activities. Given the little research into a receiver's state following WOM, the present study was undertaken to explore a range of outcomes when WOM is received.
Factors impacting the degree on influence of WOM on such outcomes
While WOM has a powerful influence on a receiver, as many studies suggest (e.g. Arndt, 1967), several factors enhance its influence. These are described below.
Characteristics of the sender and the receiver and their interrelationship
Two key motivations to the acceptance of WOM are the perceived interest of the giver in the receiver and the expertise of the giver (Dichter, 1966). These aspects underlie the importance of the credibility of the messenger. Opinion leadership research has highlighted the impact of source expertise on interpersonal influence. Bansal and Voyer (2000), Gilly et al. (1998), Fitzgerald Bone (1995) and Wangenheim and Bayón (2004) investigated the importance of sender's and receiver's expertise and opinion leadership on the influence of a sender's WOM on a receiver. Their studies (two of which investigated WOM receipt when it has been actively sought, rather than in regular conversation, when WOM occurs serendipitously) supported the impact of source expertise and opinion leadership on the effectiveness of WOM. However, the effect of receiver expertise on the impact of WOM on outcome, which was suggested to be negative, has not been supported (Fitzgerald Bone, 1995; Gilly et al., 1998; Bansal and Voyer, 2000), suggesting further investigation is warranted.
A great deal of innovation research has examined the role WOM plays in transferring ideas and in the adoption of new technologies (Mahajan et al., 1984). The flow of information about new ideas or products often occurs through informal social networks, in which early adopters play an opinion leadership role, providing WOM to others in their networks (Czepiel, 1974). The ability of WOM to operate within a consumer network appears to be influenced by the tie strength, or the intensity of the social relationship between consumers (Bansal and Voyer, 2000; Granovetter, 1973; Iacobucci and Hopkins, 1992), and by how similar (homophily) or dissimilar (heterophily) such consumers are in terms of their backgrounds, opinions, likes and dislikes (Steward and Conway, 1996; Gilly et al., 1998). Granovetter (1973) noted that social networks include close primary family and friendship relationships (i.e. strong ties) and more socially distant and weaker secondary associations (i.e. weak ties). Despite their relative weakness, “weak ties” seem to play a key role in the transmission of information throughout social networks, bridging the gaps between more socially cohesive primary groups (Granovetter, 1983, 1985). The impact of one customer passing WOM to another is known as a “ripple effect” (Gremler and Brown, 1999) and its importance and the significance of managing such “ripples” was recognized at the first International Word of Mouth Marketing Conference (2005).
WOM also plays an important role in social learning and it is likely that “weak ties” provide a more efficient outcome in the diffusion of an idea than if contacts are more frequent and information obtained from numerous sources (Ellison and Fudenberg, 1995). Face-to-face WOM seems to diffuse knowledge through a population and there is evidence that such diffusion takes place rapidly when there is high homophily. It also seems that the ability to overcome knowledge gaps between homophilous sub-populations is dependent on their level of education (Morone and Taylor, 2004). This suggests that WOM will be more effective when additional information, such as advertising, is available. However, previous research has only found weak support for the role tie strength or perceptual homophily has in WOM contexts (Bansal and Voyer, 2000; Gilly et al., 1998).
The context within which interpersonal and non-interpersonal factors interact
Several situational factors seem to impact on WOM acceptance. WOM seems to be more effective when the information was sought by the receiver (e.g. Bansal and Voyer, 2000; East, 2003; Gremler, 1994), although research into this issue has been limited. Further, little research has addressed the impact that the type of product has on WOM influence. However, researchers agree WOM is most important in high risk, high involvement contexts and for more complex services, such as professional services (Ennew et al., 2000; File et al., 1994; Hogan et al., 2004). It is not clear if WOM is more effective in these services or only more important.
Message characteristics
Curiously, the characteristics of the WOM activity itself have not been widely considered. WOM has been suggested as vivid, which relates to whether information is emotionally interesting, concrete and imagery provoking and “proximate in a sensory, temporal or spatial way” (Nisbett and Ross, 1980, p. 45). Anderson (1998) described WOM as vivid and novel, adding that, while positive WOM refers to pleasant experiences, negative WOM includes product denigration, unpleasant experiences, rumour and private complaining. Indeed, Mazzarol et al. (2007) identified two facets of WOM beyond its valence, which they termed the strength of advocacy and the richness of the message.
However, no research has investigated the impact these aspects have on WOM influence, although Gremler (1994) suggested messages have more impact when delivered enthusiastically. Further, the power of the message delivery may impact on people's ability to recall WOM (Gremler, 1994; Herr et al., 1991). This suggests WOM outcomes might be influenced by the vividness of the information, with negative WOM likely to be more easily remembered as it is more vivid. Clearly, while there has been considerable research into WOM, the points raised in this review need to be addressed and a study, which is discussed in the next section, was undertaken for this purpose.
The present study
A total of 54 participants, representing customers and potential customers of a financial institution, that was a partner in the research project, attended a series of focus groups The group profiles included current customers (four groups) and consumers who had made general inquiries about becoming customers (two groups). All of the focus groups, which lasted for an hour and a half on average, were facilitated by an experienced moderator using a common discussion protocol that was prepared by the research team. Overall, the sample was balanced with respect to gender, while participants were aged from 18 to 64 years and came from a wide range of occupations.
Focus groups enable a facilitator to enter the reality of the respondents (Stewart and Shamdasani, 1990). A focus group approach is suitable for studies in which the shared experiences of a group of people are of interest and researchers wish to participate in that shared understanding (Hines, 2000). While care must be taken in the way focus groups are designed and facilitated, they offer insights that cannot be gathered by personal interviews, although triangulation is desirable (Yin, 1994). To assist in this triangulation, participants completed an individual critical incident technique (CIT) form before the session. The form asked participants to discuss a memorable positive and negative WOM experience in the past year when they had received WOM from someone they knew. A total of 103 critical incident reports were obtained in this way.
The discussion within the focus groups was based on WOM in a variety of contexts, although a short period at the end of each session focused on the financial institution itself. Prior to the focus groups beginning, the moderator explained the procedures and the purpose of the session. The groups addressed issues such as the meaning of WOM and the outcome of WOM to them. Participants were also asked about the factors that were likely to influence a person, whether themselves or others, to act on WOM, or the kind of person who might or might not act on WOM and why WOM might be an effective means of promotion.
The six focus group sessions were audio recorded and transcribed into a word processing package. These transcriptions and the CITs were subsequently analyzed in accordance with Miles and Huberman's (1994) suggestions. Recurring themes that were related to the research were first identified. Horowitz and Newman (1964, p. 642) described these themes as “ideas”, each idea being “an utterance that expresses a thought in a meaningful, relevant and unique way”. They also noted there are likely to be “subordinate ideas” that add to established ideas or add understanding or amplification to previously expressed ideas, but are not additional ideas. Such responses were also highlighted and coded on the transcripts. The themes were generated in a grounded approach, the analyst being open minded while acting within the knowledge of previous research and theory (Miles and Huberman, 1994). The transcripts were examined and codes or labels were assigned to each paragraph. Following this, broader categories or themes were developed that represented a series of such codes (Miles and Huberman, 1994; Strauss and Corbin, 1990). Finally, the themes, which are discussed in the following section, were validated and refined by reassessing the raw data.
The outcomes of WOM
WOM outcomes were investigated from a receiver's point of view. Overall, positive messages led to a sense of enthusiasm, confidence and optimism in the receiver. Such sentiments are consistent with the earlier discussion about the reduction in perceived risk created by WOM, which was expected based on previous research. Comments that reinforced this view included:
[After receiving positive WOM I was] happier about choosing the right agent, as it involved a great deal of my savings. I felt it reduced any risks as my friend had already used the service and was happy with it [CIT, travel agent].
[After receiving positive WOM] I felt encouraged and confident – the firm appeared to provide what I wanted at the right price and level of service [CIT, internet provider].
I was in a general conversation with colleagues who are computer technology enthusiasts. [After receiving positive WOM] I was encouraged about [internet provider], they appeared to provide what I wanted at the right price and level service [CIT, internet provider].
I asked my friend her experience with mortgage brokers. [After receiving positive WOM] I felt a bit more confident with respect to looking for a mortgage brokers to approach [CIT, mortgage broker].
A sense of relief was also evident:
[A friend] told me about the costs of his dentist, and that he only charges what [the health insurer] rebates. I felt relieved that [friend] could give me the information that I needed [CIT, dentist].
[A colleague] was talking about going overseas, and said their travel agent [X] had been very helpful. I felt happier about knowing the right travel agent since my trip was going to involve a lot of my savings [CIT, travel agent].
Positive WOM also led to an improved opinion of the firm:
My friends had been to a restaurant and commented on the friendly staff and how good the place was – set out for children to keep the kids and parents happy. I felt encouraged to go to the restaurant and try it myself [CIT, restaurant].
My friend was telling me about making a complaint about [telecom] services and that they received excellent service and also follow up service. I was surprised and found myself thinking of the bad publicity that they had received was not deserved [CIT, telecom].
Negative messages led to sympathy with the WOM provider, anger and a poorer image of the organization:
I was talking to friends when having a drink and was told that [cable company] is putting commercials on as much as local stations. I felt annoyed and frustrated [CIT, cable provider].
The girl making the comment was telling us about her haircut and color. She was rather distressed and annoyed, but ultimately blamed herself for choosing to use the service. I felt sympathetic for the girl, a bad haircut cannot easily be undone [CIT, hairdresser].
A friend mentioned the hassle he was having with [telecom]. He said “I tried to talk to them and they didn't want to know”. I felt sorry for his hassle, in a way, empathy [CIT, telecom].
We were driving to this seminar. My friend was telling me about her weight loss centre, she was disillusioned as she had not received satisfactory answers to her questions. I felt I wanted to help her [CIT, weight loss centre].
He was not happy about the way his bank drew his money out twice and now he was having to chase the refund. This is typical of a big institution, making people chase their own money and giving them the runaround [CIT, bank].
This person had received a letter from the company stating they owed $700. Bills had been sent to the wrong house and they had simply added interest when they did not receive the money. It was their mistake for sending it to the wrong place. I felt really angry that companies can get away with things like that. Lawyers and courts would be too expensive [CIT, telecom].
Someone in our group told us that his brother had to cancel his interstate trip because he felt very ill from eating in that restaurant. He was laughing when he said it. We all laughed along with him and felt scared to go there. I will never go there again and feel lucky that I did not get sick the couple of times we ate there [CIT, restaurant].
In some cases however, the recipient was somewhat doubtful of the credibility of the WOM:
I was talking to friends over a cappuccino, one was telling us about [a retail outlet], she was insistent in her description. I felt it couldn't be that bad [CIT, retailer].
A couple of friends had gone to dinner and mentioned that the food was average and prices were high at the restaurant (which had an upmarket profile). I will try it out myself and make up my own mind [CIT, restaurant].
Sometimes when people are telling you something good about something then I usually step back and think “Well who are you trying to convince?”. They can be too convincing and you think “Are you trying to convince me or yourself?” [male participant].
It seems that while previous research investigated the impact WOM has on purchase activity and perceived risk, and the present study supported this relationship, no research has investigated the psychological outcomes WOM has on a receiver. Positive WOM was found to increase receivers' perceptions of comfort, relief, confidence and enthusiasm, while negative WOM evoked feelings of anger, disappointment and empathy with the giver (as is shown in Table I).
Factors that increase WOM's influence
The following section explores the factors that the research suggested enhanced the impact WOM had on a receiver. These factors are reported in four sections (personal factors, interpersonal factors, situational characteristics and message characteristics).
Personal factors
When participants were asked to think about situations in which WOM may be most effective, three themes emerged. The first concerned the perceived credibility of the sender and the associated expertise of the sender and, as a consequence, the risk associated with taking the advice. Some typical comments were:
It depends where the information's coming from. If you get good information, the recipient is going to act on it if he knows the giver to be reliable [male participant].
It all comes back to the relationship you have with that person, the respect you have for that person and their opinion and the risk involved in that information if you are to act on it. Most people will give an opinion, but I would be qualifying it to see what the risk was [male participant].
If it's someone I know who knows nothing about wine, I won't be too interested in what they say about wine. But if it's someone I know who's got knowledge, I'll try this out [male participant].
Probably it is how you feel about the giver – the amount of respect or how they are perceived by you … The knowledge and how you feel about that person [female participant].
The second personal factor enhancing the effectiveness of WOM was whether a receiver needed reassurance or further information before making a decision because the purchase decision was complex or because they lacked experience with the product or the service being considered. In some cases the WOM was the final factor leading to the decision. For example:
A “first timer”, a person who's never been to a restaurant before, they will ask someone. The young person who's never opened a bank account before is more likely to ask and act on the advice [female participant].
Maybe a person who is in a situation where they could go one way or the other – they have heard a bit of word of mouth advice – the first good word they have heard on the subject so they think “oh I'll go there” and no more mucking round, end of story [male participant].
The factors associated with the sender that enhanced WOM effectiveness matched suggestions made previously, as can be seen in Table II. These factors were the sender's credibility, trustworthiness and reliability as an information source and, consequently, the value placed on his or her opinion leadership.
Table III outlines the “receiver” factors that seem to impact on the likelihood that WOM would be effective. The key issue was the experience a receiver had with a particular product or service, although this suggestion has not been supported by previous research.
Interpersonal factors
As well as sender and receiver characteristics, the personal relationship between the parties influenced WOM acceptance. The key aspect in this context was the closeness of a sender and a receiver. Additionally, perceptual homophily, or the degree of similarity of the giver and receiver, impacted on WOM effectiveness. This theme extended the first theme discussed in the results (the credibility of the giver of the message) to include a dyadic perspective. For example:
The amount of weight you put on it depends on how much you think they share your views and how much you respect their general judgement [female participant].
If I knew people really well and they all said, “Go to wherever”, then I would trust them. Whereas if I picked up the newspaper and got the same recommendation, I wouldn't believe it [male participant].
If somebody is telling you about their experiences then what you do is automatically assess the person telling you. If it's someone, for instance, of a lower socioeconomic group and they say “Oh this fabulous restaurant that we went to” and your idea of a good restaurant is somewhat more upmarket then you are going to assess that word of mouth for you [male participant].
There was also some evidence that WOM was not always dependent on “strong ties” but could be well received when given by more distant relationships, i.e. “weak ties”:
[WOM can be given to] me by people outside my immediate circle. But, generally speaking, I would want to know who the person is, what their background is, those kind of things [male participant].
I have found two of the best restaurants from people that I would regard as enemies. But I trust their taste on restaurants. They didn't tell me, I just heard that they liked these restaurants [male participant].
The relationship between the two people involved is the most telling point. Then it comes to your appreciation/trust of the person, even if you're not mates [male participant].
A stranger gave me information on a tiler and I trusted them – I think I know when to trust people or not [female participant].
In summary it seems that, WOM was more effective when there was a close relationship and a good rapport between a sender and a receiver that was based on trust and mutual respect. These characteristics are similar to the factors associated with a sender's opinion leadership role (Mazzarol et al., 2007) and are likely to impact on the effectiveness of WOM communication. Interestingly, previous research has not found strong support for interpersonal relationships increasing receptivity to WOM (Bansal and Voyer, 2000; Gilly et al., 1998). Indeed, the focus groups suggested that WOM could be favourably received from within “weak-tie” (i.e. more distant) relationships, but that reception seemed to depend on the nature of the opinion. These findings are summarised in Table IV.
Situational factors
The third theme concerned situational factors that did not relate to the sender, the receiver or the message. The first sub-theme related to the nature of the service being discussed, as WOM was seen as more valuable to a receiver in some service contexts than in others. WOM was least effective for highly involved, complex services involving higher risk. For example:
If it's something very simple, with little or no risk involved, you'll find that people will probably accept it … . But if it's a life changing decision, I don't think that people would act in the same way. They would think long and hard before making a decision. So it depends on the importance of the information and the subject matter [female participant].
I agree that the price of the product or service is fairly significant – I mean a hammer, I couldn't care less … But it would be the significance of the product or service and the impact of that on your life [male participant].
You might not take advice on banks but might happily go off to a recommended restaurant [female participant].
If you go eat out a lot, it is nice to go somewhere different. When you get good recommendation, you think “Why wouldn't you act on it?”. But then it is not a big deal, going out for dinner is not going to cost you a lot. But it is something going to cost you a lot, if it is a big decision, you can take on board what people say, but you have to be a bit more rational in behaving [male participant].
When services were highly involved or complex, WOM was most effective when it was received from multiple separate sources (i.e. WOM from different people or alternative sources converging to support the message):
The other factor is how many people you talk to. You wouldn't just listen to one person's advice, you would canvas a number of people. If they all say the same and they are all different people you would probably believe it [male participant].
WOM is only one source of information. These days we've got this tremendous number of choices. Not just banks and restaurants, but digital cameras and TV sets, etc. – it's just a nightmare. So we're asking as many people as possible and looking at other sources of information trying to decide [male participant].
WOM value also increased when a receiver lacked the information needed to make the decision:
Sometimes it's the only way to find out about something. Like where to get your car fixed. Where I was, there was no other way to find out who was any good [male participant].
As expected, WOM was most attentively listened to when the receiver had a vested interest in the conversation:
Whether you are sitting around in a group at morning tea or lunch – you say something and another person may not comment on it at the time but it will stick in their mind. Like a restaurant that has been praised by someone else – you think “I might try that” [female participant].
It depends how important the topic is. I might not need the fridge now, but might need one in the future, so you pile that away in the databank. If it is a Chinese restaurant, I hate the Chinese food, don't care about it, so you forget about it instantly. So something you might be interested in, you take notice [Male participant].
It was also clear that WOM was more valued when the information was sought by the receiver:
You have more respect for the opinion of the person you ask, rather than the person who offers advice without being asked for it. A general comment is fine but if it goes on to become almost a directive then you sort of feel not that comfortable with that information or that person [male participant].
Word of mouth maybe only works when a person has asked you for advice. Freely chatting about experience could be just gossip [female participant].
Finally, WOM was particularly valuable when the receiver did not have much time to investigate alternatives:
Time can also be a factor. You may not have the time to check something out. For example at a retail sale you could miss the opportunity [female participant].
Sometimes it is opportunistic, when you can act on WOM instantly. For example, walking through a shopping mall and someone says there's a good restaurant and you instantly try it [male participant].
While the communication process and actors (the giver and the receiver of WOM) were important to a WOM outcome, several situational factors also impacted on WOM receptivity (as is shown in Table V). These factors include the availability of information about the product or service, suggesting WOM is more effective when there is a lack of publicly available information and correspondingly when it is difficult (or impossible) to assess an offering prior to purchase, which is often the case in service contexts.
The value of WOM is also likely to be greater in high risk contexts, when the product is complex, high involvement, high cost or important to a receiver. Nonetheless, consumers are more likely to act on WOM in “simple” situations. WOM also seems to be an important source of information when time pressures exist in making a decision and further, had more impact when the receiver had a vested interest in the product or when the information was sought. Finally, WOM was most effective when a similar message was received from several sources (either from other WOM providers or from other media).
Message characteristics
The final, and perhaps most interesting, theme concerned the characteristics of the WOM itself. The perceived credibility of the WOM sender was important to the outcome, but the way in which the message was delivered and the nature of the message also impacted on WOM effectiveness. In particular, the richness of the message, including how vividly the message was portrayed, such as through story telling impacted on WOM receptiveness. Non-verbal communication, such as body language, also played an important role in WOM acceptance. For example:
The details, his emotions … He has had personal experience. Personal experience people act upon that [male participant].
My friend was telling me with great enthusiasm and I started visiting the store [CIT, supermarket].
I remember the comment because the hikers raved about the place [CIT, guest house].
I remember the comment because of the strength and tenacity in the person's tone and voice [CIT, retail outlet].
I remember a man telling me story he had with a car dealer and how he got his refund from his car and it was more that he liked to tell the story – it was a very enjoyable story – a good story and he loved telling it [Male participant].
WOM can also really be contradicted by a person's body language and gesture and the way he/she actually expresses themselves [female participant].
The intensity of the voice and intensity of eye contact [makes WOM more effective]. Just general gestures. If you really listen to people they will use certain words that are considered to be more persuasive and more convincing and powerful than other word [Female participant].
It is the words people use, “fantastic” or “outrageous”, the content and the words [female participant].
Table VI outlines the factors associated with the WOM message that increase WOM impact. As mentioned, while vividness has been recognized as a key descriptor of WOM (Anderson, 1998), no research has investigated the impact message characteristics have on WOM effectiveness. The focus group suggested the way a WOM message was delivered, or the way the WOM story was told, influenced the outcome. The non-verbal communication cues that senders use to convey the message also impacted on its effectiveness.
Discussion – a proposed model of WOM impact
Prior research, the focus groups and the critical incident findings, which were discussed in earlier sections, suggested a WOM impact model that includes sender and receiver attributes, the interpersonal relationship between the actors, the situational factors including the nature of the product or service that is the subject of the WOM message and the way in which the message is transmitted by the sender to the receiver. The suggested model is summarized in Figure 1.
As shown in the model, the key factors likely to influence the receiver's propensity to act on WOM are a combination of personal and interpersonal characteristics plus those associated with the message and the situation surrounding the communication. The present study found WOM was likely to be more effective when one of more of the four conditional or situational factors shown in Tables II-VI, and summarised in Figure 1, occur. The tables point out the limited previous research on WOM receivers and compare the findings from previous studies to those found in the present qualitative research. This study adds to previous research in two main ways.
While several outcomes of WOM (that is, how a receiver reacts) have been identified previously, these outcomes were functional in nature (e.g. purchase rate or product evaluations). The present study identified several additional psychological outcomes (other than a reduction in perceived risk) including increased relief, confidence and enthusiasm for positive WOM. While limited research has investigated the psychological motivation for a giver to offer WOM (e.g. Balasubramanian and Mahajan, 2001; Hennig-Thurau et al., 2004), no prior research has examined the psychological aspects of WOM from the receiver's viewpoint. Thus the present study represents an important step forward in WOM research. Similarly, psychological outcomes were found for negative WOM outcomes, such as empathy with the WOM giver.
Further, it seems a receiver's image of an organization (rather than a product evaluation) can be improved by positive WOM and a receiver's anger and disappointment with an organization can be increased by negative WOM. Such differences underscore the possibility that positive WOM may be more cognitive in nature and enhance cognitive perceptions, while negative WOM may be more emotional in nature and, in some cases, may result in strong and emotionally charged negative views of an organization (Sweeney et al., 2005). A review of the interviews and CIT reports, typified by the verbal quotes in the present paper, supported this suggestion.
Second, the role of several previously identified factors, including personal and interpersonal factors and situational factors, on WOM effectiveness were also evident in the present research. The study also found that message content and the way in which WOM is delivered impacted on WOM effectiveness. No research to our knowledge has addressed the effect of message characteristics empirically, although Anderson (1998) described positive WOM as vivid and novel experiences and suggested negative WOM led to product denigration, unpleasant experiences, rumour and private complaining. Gremler (1994) also argued that a receiver is more likely to act on WOM received from an enthusiastic recommender, Dichter (1966) and Gabbott and Hogg (2000) discussed the role face and body language played in supporting the spoken word. In summary, no research to our knowledge has conducted an empirical investigation of the impact of the nature of the WOM message and the message delivery. The present study strongly supports the impact of the nature of the message in terms of the strength and power of the words on WOM influence. A quote from the focus groups illustrates this (“It is the words people use, ‘fantastic’ or ‘outrageous’”).
Further, message content was enhanced through conveying the message through a story, which seemed to add to the richness and vividness of the message. The study also found the manner of delivery (i.e. the way in which the giver conveyed the message) also had a profound effect on WOM acceptance (e.g. “I remember the comment because the hikers raved about the place”). A sender's associated body language, such as gestures and facial expressions, clearly supported verbal messages (e.g. “WOM can also really be contradicted by a persons body language and gestures and the way he/she actually expresses themselves”).
Finally, the present study suggested a model of the factors that impact on WOM's influence and subsequent perceptions of risk, purchase intentions and firm perceptions as well as the additional psychological outcomes identified in the present study. The model, shown in Figure 1, provides the basis for future research as it integrates message characteristics into the model of WOM influence.
Conclusions
While these findings provide useful and rich insights into the WOM outcomes debate, the study had several limitations. The first was the small size of the sample and the fact that participants were recruited from the same financial services organisation in a single area. The present study needs to be supported by quantitative research that assesses the range of suggested antecedents, including message characteristics, and the various suggested outcomes, as well as the overall model that was shown in Figure 1.
This study provides some useful insights for managers seeking to systematically generate WOM as a promotional tool. Although many of the factors outlined in Figure 1 are beyond the control of the organisations seeking to market their goods and services, they suggest that WOM is likely to be more effective when the receiver needs further information about the product/service offering, when they have limited time for comparison and when they wish to reduce the perceived risk of the purchase. The chances of a sender providing WOM is likely to be enhanced when they are satisfied with the product/service experience and the receiver is more likely to act on this if they already have a good opinion of the product/service provider. The organisation that invests in both good customer service management and effective promotion of its image is likely to receive greater benefits from WOM when it occurs as it reinforces the information provided in the communication process.
The research raises some important issues that present fruitful future research avenues. While the limited research on word of mouth activity has focused largely on the sender (i.e. the giving of word of mouth), the present study, which focused on the receiver's view, emphasises that the full WOM cycle needs to be examined. That is, it is not enough to generate WOM as a receiver's attitude and behaviour with respect to that WOM is critically important in determining its eventual impact and this aspect needs fuller investigation.
Figure 1A suggested model of WOM impact
Table IReceiver outcomes following WOM
Table IIFactors associated with the sender
Table IIIFactors associated with the receiver
Table IVFactors associated with the interpersonal relationship
Table VFactors associated with the product or service
Table VIFactors associated with the message
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About the authors
Jillian Sweeney is an Associate Professor in Marketing at the University of Western Australia. Before starting an academic career, she obtained extensive experience in market research consultancies in London, Sydney and Perth, focusing on statistics and sampling, industrial research and consumer research. She was awarded a PhD in marketing in 1995. Her academic research focuses on services marketing as well as brand equity, relationship marketing and word-of-mouth. She has published widely, including in Journal of Retailing, Australian Journal of Management and Psychology and Marketing. Jill was on the National Council and State Chair of the Australian Marketing and Social Research Society until recently, and is on the Australia and New Zealand Marketing Academy Executive. Jillian Sweeney is the corresponding author and can be contacted at: jsweeney@biz.uwa.edu.au
Geoffrey N. Soutar is Professor of Marketing at the University of Western Australia. He is a Fellow and Life Member of the Australian and New Zealand Academy of Management and was one of three academics appointed as an Inaugural Fellow of the Australian and New Zealand Marketing Academy in 2004 and is a Fellow of the Australian Marketing Institute, a life member of the Market Research Society, a Fellow of the Australian Institute of Management and a Fellow of the Marketing Institute of Singapore. Professor Soutar has acted as consultant to a many organisations in Australia and internationally and has been active in research across a wide area, publishing over 100 papers in journals areas and presenting more than 200 papers at seminars and conferences.
Tim Mazzarol is Director of the Centre for Entrepreneurial Management and Innovation (CEMI) and an Associate Professor of Entrepreneurship and Strategy at the Graduate School of Management at the University of Western Australia. He has 15 years' experience of working with small entrepreneurial firms as well as large corporations and government agencies. He is the author of several books, book chapters and monographs, as well as numerous papers on the international marketing and management of services, entrepreneurship, small business management, innovation and commercialisation. He is also a member of the Editorial Advisory Board of the Journal of Small Business Management and Small Business Research: The Journal of SEAANZ. He holds a PhD in Management and an MBA with distinction from Curtin University of Technology, and a Bachelor of Arts with Honors from Murdoch University, Western Australia.