Posts filed under ‘word of mouth’

Customer Satisfaction and Word of Mouth

Do consumers complain or praise more?

Telling other people about your experiences with a company of product is something many people do. This may be evangelizing their newly purchased laptop, or gripe about the slow service at a restaurant. Word of mouth is defined as informally communicating with a third party about goods and services, rather directly telling the company.

There are 3 theories about consumers engaging in word of mouth.

  1. Highly satisfied consumers engage in more word of mouth, because
    • they want to help others,
    • appear well informed or smart,
    • engage in ego defense,
    • reduce cognitive dissonance,
    • present themselves in a positive light;
    • they may have a general bias towards positive things,
    • or want to avoid saying negative things.
  2. Dissatisfied consumers engage in more word of mouth, because
    • they want to vent hostility,
    • reduce anxiety,
    • warn others,
    • or seek vengeance.
  3. Consumers engage in word of mouth more if they are extremely satisfied or dissatisfied, because
    • they will have a greater impact, hence more utility when they engage in word of mouth in a more extreme situation.

Word of mouth activity is also predicted to increase at a greater rate for dissatisfied consumers than satisfied consumers, since negative information about products is less common and has a greater effect.

A study indicates that theory 3 is more likely than the other two, since the resulting data is a U-shaped model, where highly satisfied and dissatisfied consumers engage in greater word of mouth. The hypothesis that negative word of mouth increases at a greater rate is also supported by the data.

 satisfaction.PNG

The study replicated similar findings in both the United States and Sweden, indicating that word of mouth practices are likely universal.

Anderson, E. W. (1998). Customer Satisfaction and Word of Mouth. Journal of Service Research, 1(1), 5-17. [PDF]

November 20, 2006 at 3:58 pm 5 comments


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