Understanding eWOM

Note: This article was originally posted on October 21st 2010, but later deleted by mistake. This is a re-posting of the original message.

Word of mouth (WOM) influences about two-thirds of consumer decisions, with 90% of respondents in a NOP survey saying that WOM was the best, most reliable and trustworthy source of information. The success of WOM is attributed to two factors: the personal nature of the communication and the perception that the person providing the referral has no ulterior (economic) incentive to recommend the product.

The bad news for businesses is that less than 4% of face-to-face WOM is stimulated by organisation’s efforts, and that customers are more likely to talk about the bad experiences than the good ones. The problem is further compounded by the fact that, in the Internet, a customer’s comments can rapidly reach viral status. Furthermore, they will remain available for everybody to see well past the original problem has been rectified.

One (by now) classical example is the video that Brian Finkelstein posted on YouTube, to vent his frustration with internet provider, Comcast. When the Comcast technician that came to repair Brian’s faulty Internet connection fell asleep on his couch while trying to get through to the company’s customer service(!), Brian got hold of his camera and recorded this short film:

According to Brian’s blog, within 24 hours of posting, the video had been seen by over 70,000 people and shown on MSNBC. He later received a call from the regional Vice President of Comcast, and 48 hours after the initial posting the problem had been sorted by a team of Comcast technicians, including the head of the technical division, who worked 5 hours on the problem. It must be said that Brian did blog about the successful outcome, writing: ‘This crew was extremely professional, efficient and they knew what they were talking about. It was great. If Comcast could provide this level of service for every person experiencing connection issues, they’d be the darling of the industry’. The issue is that while the video went viral, the blog didn’t. Not only that, but fours years on the video is still available on YouTube, by now counting 1,568,321 views, while the blog post is no longer available.

The scale, allied to the intransience, of the Internet mean that it is critical for organisations to understand the behaviours and motivations of those that talk about their experience online, on the one hand, and the effect it has on potential and/or existing customers, on the other. In other words, understanding both the antecedents and the consequences of electronic word of mouth (eWOM).

Understanding the antecedents of eWOM
Research in progress at Oxford Brookes University looks at eWOM as a behaviour enabled by communication technology.

Drawing on insights from social psychology, it is proposed that eWOM is influenced by external factors related to the acceptance of computer-mediated communication, overall personal attitude towards eWOM and previous experiences with the organisation in question. Furthermore, social attitudes towards eWOM moderate (i.e., influence) the likelihood that the customer will comment on his/her consumption experiences.

Understanding the consequences of eWOM
In turn, researchers at Ludwig-Maximilians-University in Munich have been looking at the other side of the coin – namely, how eWOM is perceived by readers and how it influences future consumption.

As stated above, the success of WOM offline hinges on the personal nature of the communication and the perceived lack of ulterior motive for the recommendation – two aspects that are difficult to replicate and assess online, where stranger, rather than personal, interactions prevail. The research team investigates how readers of online product reviews judge the writer’s trustworthiness and motives, and what impact that has on purchase intention. Preliminary results suggest that reviews with detailed information are taken more seriously than shorter ones, though this effect is moderated by the perceived motive of the writer. Furthermore, the researchers compared emotional and informational reviews, concluding that the latter impact more on purchase intention than the former, but there is an interaction effect between the message characteristics and the perceived motives.

Implications for organisations
The early results of these two research projects offer a number of valuable pointers for organisations.

First, customers don’t tend to jump into the online platform to voice their comments. Rather, it is the result of a series of events and interactions between the customer and the firm in question – for instance, there were various (unsatisfactory) exchanges between Brian Finkelstein and Comcast before the video was made public.

For a given event, eWOM behaviour will differ across customer groups, and be more prevalent among those that are comfortable with the technology and whose relevant others support such behaviour. However, as computer mediated interactions become ubiquitous and eWOM increasingly accepted across social groups, we can expect this behaviour to become the norm rather than the exception. This should mean that isolated cases will have less visibility, but that there will be a larger pool of comments available.

Short comments that are written as reaction to critical events tend to be less effective than longer, informational ones; so, organisations should encourage customers to post feedback, routinely.

If you would like to know more about the research on the antecedents of eWOM, please contact Silvia Liang here: silvia.liang@brookes.ac.uk. For further information concerning the research investigating the consequences of eWOM, please contact Andreas Munzel here: munzel@bwl.lmu.de.

What are your experiences of eWOM, as a consumer or as a company? Let me know.