Negative Word-of- Mouth by Dissatisfied Consumers : A pilot Study

1. Negative Word-of-MouthbyDissatisfiedConsumers: A pilotStudy AntoineRiprêtTom TenenbaumLesueurMonica TyeAndrea VindiolaAlexis AlfroyBaptisteMulliez #ViralMarketingQuestions

2. Whatis Word of Mouth? • 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. • WOM is the passing of information from person to person by oral or written communication • If customers are dissatisfied they can create negative WOM, telling others about their bad experiences with a company, product or service.

3. 5 principles of WOM In the case of the WOM, themessage has to be: • Credible • Repeatable • Social • Respectful • Theimpactmust be measurable • In the case of the NWOM, the rules are thesame. • i.e. : brokenbikechain

4. Your point of view

5. Thedissatisfactionproccess Hirschmann (1970) Variouspossibilitieswhen a customerisdissatisfied • Complain to the supplier (voice) • Loyal => Voice • Unloyal => exit • Exit (to another supplier) • Exit costs • Customersloyaltyworks as abarrier to exit • WOM (talk negatively to friends and relatives) • Some people don’t do anything

6. Example of Negative Word-of Mouth • British Airways lostcustomerluggage • He spent $1,000 forhis tweets to be promoted • The tweets could be seenby more than 300,000 followers of British Airways

7. Findings in negative WOM • WOM and ProblemSeverityAs 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.

8. Findings in negative WOM • WOM and RetailerResponsiveness 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.

10. Issues of negative WOM • A customerwouldbetterwant to express hisdissatifactionthanhissatisfaction. • Wordsused and implication of the consumer mightbestronger in negative WOM than in positive (strong feelings involved) • Negativeword of mouth has a bigger impact on the personthathearsitthanpositive • Fake WOM (Yelp, Trip Advisor, etc…)

11. Influence of negative WOM ondiffusion of innovation • NWOM of innovators and specialists influence followers • Avoid NWOM especiallyat the begining • NWOM wouldbelesscritical if doneduring the majority of difusion

12. Antecedents to satisfaction with service recovery from W. Andreassen (1998) • Managmentdiscoverstheorganization’sinabilitytosatisfycustomersvia: • Exitcustomerstopsbuying • Voicecomplaints • Servicerecovery: Whencompaniesrespondtodissatisfiedcustomers’ complaints. • Servicefailuretriggersnegativeaffect and emotions in thecustomer • Servicerecoveryisneededtochangetheseto positive ones • FINDINGS: • Lowexpectationsencourage positive disconfirmation: POSITIVE AFFECT AND EVEN WOM • High expectationsencouragenegativedisconfirmation: NEGATIVE WOM, NO REPURCHASE

13. Conclusionsand Implications Ifminordissatisfactionexperienced • Consumer’s responses are minimal • Neithercomplainor spread negative WOM Ifdissatisfactionisserious: • Consumerscomplain Ifcomplaints are encouraged: Retailer can remedythesituation Win back a customerwhomayalsomake positive reportstoothers Evenifcomplaints are notcompletelysettled, thecustomeris more likelytorepurchasethanif no complaintismade.

14. Conclusions and Implications Ifcomplaints are discouraged: - Fewerconsumerscomplain • Thesemaytellothers of theirunsatisfactoryexperience • Maynotrepurchase in thefuture NEGATIVE WOM Therewill be somedeffects and dissatisfiedcustomers, butthewaymanagementdealswiththesedissatisfactions can haveimportantimpactsonbrand and store image. -Toll-free telephonenumberstoreceivecomplaints-Store signs-Positive employeeattitudes -Detailedwarranty-Complaintproceduresinformationonlabels Mayavert WOM and mayevencreate positive WOM

15. Conclusionsand Implications Consumerperceptions of institutionalresponsiveness depended onwhichproductwasthesource of dissatisfaction • Perceivedresponsivenessforcomplaintsaboutapplianceswaslowerthanforclothingitems • More expensivetoremedy a dissatisfactionconcerninganappliance • Retailersmay be reluctancttomaketheseexpenditures and makecomplaintproceduresdifficult