Talk up or criticize? Customer responses to WOM about competitors during social interactions

Chatura Ranaweera and Chanaka Jayawardhena

Journal of Business Research, 2014, vol. 67, issue 12, 2645-2656

Abstract: Popular metrics such as the Net Promoter Score (NPS) highlights many benefits of word of mouth (WOM) to firms. Is WOM all it is claimed to be? Building on social identity theory, this research develops a conceptual model of WOM exchange in social settings and tests the model with customer surveys of three service sectors. The findings show that the effects of (1) positive and negative WOM (P/NWOM) received about competitors and (2) perceived presence of critical incidents (PPCIs) on P/NWOM given about own service provider are far from intuitive. Responses to PWOM received counter the suggestions in the NPS literature. The findings also indicate that the best firms can hope for when receiving NWOM about competitors is that their customers remain silent. It is recommended that firms communicate a message that is consistent with the nuanced views expressed by friends in social circles, rather than a uniformly superior positioning.

Keywords: Word of mouth received; Word of mouth given; Critical incidents; Social identity (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:67:y:2014:i:12:p:2645-2656

DOI: 10.1016/j.jbusres.2014.04.002

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