Word-of-mouth communication in the

service marketplace
The Authors
W. Glynn Mangold, Professor of Marketing, Department of Management & Marketing,
College of Business & Public Administration, Murray State University, Murray, entucky,
USA
Fred Miller, Professor of Marketing, Department of Management & Marketing, College of
Business & Public Administration, Murray State University, Murray, entucky, USA
Gary R. rock!ay, C!airman and Professor of Marketing, Department of Management &
Marketing, College of Business & Public Administration, Murray State University,
Murray, entucky, USA
A"stract
Word-of-mouth communication (WOM) is a dominant force in the marketplace for services.
However, the current body of research provides little insiht into the nature of WOM in the
service marketplace. !eports the results of a content-analytic study that provides insiht into
WOM"s content and the catalysts by which it is stimulated. #he oal was to capture a series of
$rounded events% from which broader patterns could be discerned. #hese rounded events
were actual incidents of WOM as described by the recipients of a communication. #hree
content cateories and ten catalyst cateories are identified. &mplications for manaers are
addressed.
Article Type#
!esearch paper
$ey!ord%s&#
'ommunications( 'onsumer behaviour( 'ustomer satisfaction( &nterpersonal
communications( )ervices marketin.
'ournal#
*O+!,-. O/ )0!1&'0) M-!20#&,3
(olume#
45
)um"er#
4
*ear#
4666
pp#
75-86
+opyright ,
M'9 +: .td
-..)#
;887-<;=>
!esearch indicates that word-of-mouth communication (WOM) has a sinificant effect on
consumer purchasin behavior. One study conducted by the +) Office of 'onsumer -ffairs
indicated that, on averae, one dissatisfied customer can be e?pected to tell nine other people
about the e?periences that resulted in the dissatisfaction. )atisfied customers, on the other
hand, relate their story to an averae of five other people (2nauer, 466@). )uch
communication e?erts a stron influence on consumer purchasin behavior, influencin both
short-term and lon-term Audments (9one, 466>( 9urBynski and 9ayer, 4677( Herr et al.,
4664). #his influence appears to be particularly sinificant when the communication is
consistent with the individual"s feelins toward the product under consideration (Wilson and
:eterson, 4686).
WOM seems particularly important to the marketin of services. 'onsumers have been found
to rely on WOM to reduce the level of perceived risk and the uncertainty that are often
associated with service purchase decisions (Murray, 4664). 'ompared to purchasers of oods,
Murray (4664) found that service purchasers have reater confidence in personal sources of
information as well as a reater prepurchase preference for personal information sources. He
also found that personal sources have a reater influence on purchasers of services than on
purchasers of products.
#he purpose of this research is to provide insiht into the nature of WOM as it relates to the
service marketplace. What situational circumstances and motivations stimulate WOMC /or
e?ample, is WOM freDuently stimulated by hih levels of satisfaction or dissatisfaction with
previous service encountersC 'an eneraliBations be drawn about the content of WOMC /or
e?ample, is the price of the service freDuently discussed amon WOM participantsC
+onceptual "ackground
- substantial body of research indicates that interpersonal communication has a sinificant
impact on consumer purchasin behavior. 0arly studies attributed this impact to normative
social influence (-sch, 46>5( )tafford, 46<<( 1enkatesan, 46<<). However, subseDuent
research suests that the informational aspects of social influence may also have a
substantial impact on purchasin behavior (9urnkrant and 'ousineau, 467>( 'ohen and
3olden, 467@( :incus and Waters, 4677). #he accessibility-dianosticity model, discussed
ne?t, provides further rationale for the sinificant influence that WOM is believed to have on
purchasin behavior.
Accessibility"diagnosticity model
-ccordin to the accessibility-dianosticity model, the influence of a particular piece of
information will depend on the accessibility (from memory) of that piece of information, the
accessibility of alternative pieces of information, the dianosticity of the piece of information,
and the dianosticity of the alternative pieces of information (/eldman and .ynch, 4688(
.ynch et al., 4688). Eianosticity refers to the deree to which information helps consumers
to cateoriBe products (i.e. hih Duality vs. low Duality).
!esearch conducted by Herr et al. (4664) supports the idea that WOM is accessible. #hey
found that WOM had a reater impact on product Audments than printed information.
/avorable brand attitudes were formed on the basis of a sinle, favorable WOM
communication, even when e?tensive, dianostic attribute information was also available. #he
authors suest that the impact of WOM on product Audments is attributable to its vividness,
as opposed to pallidness, as a form of communication. 1ividness refers to the deree to which
information is $(a) emotionally interestin, (b) concrete and imaery-provokin, and (c)
pro?imate in a sensory, temporal, or spatial way% (,isbett and !oss, 468;, p. =>). 1ivid
communication media are believed to attract attention to the information, hold attention, and
increase the information"s accessibility from memory and its impact on consumer Audment
(Herr et al., 4664( ,isbett and !oss, 468;).
WOM can be considered to be dianostic in nature $to the deree that consumers believe that
the decision implied by that input alone would accomplish their decision oals (e.. ma?imiBe
utility, choose a Austifiable alternative, and so on)% (.ynch et al., 4688). #his suests that
WOM may be more dianostic in nature than nonpersonal sources of information such as
media advertisin. #he effects of WOM appear to be reduced, however, when more
dianostic pieces of information, such as prior impressions, are available or when e?tremely
neative attribute information is available (Herr et al., 4664). Other factors that underlie
WOM are discussed ne?t.
Underlying factors
0vidence indicates that WOM is often related to consumers" satisfaction or dissatisfaction
with previous purchasin e?periences (9lodett et al., 4665( 9rown and 9eltramini, 4686(
!ichins, 4685( Wilson and :eterson, 4686). 'onsumers also appear to enae in WOM to
satisfy their personal information needs (9loch et al., 468<( 9urnkrant and 'ousineau, 467>(
'ohen and 3olden, 467@( Howard and )heth, 46<6( :incus and Waters, 4677). - limited
amount of research suests that WOM lends itself to the communication of subAective
information such as Duality rather than more obAective types of information such as price
(Houston, 4676( Murdock, 4684a( 4684b).
Much of the research pertainin to WOM in the marketplace has focussed on neative, rather
than positive, communication. #his research indicates that the tendency to enae in neative
WOM is influenced by several factors. !ichins (4685) found that the tendency to enae in
neative WOM was positively related to the level of dissatisfaction and neatively related to
the consumer"s perception of the retailer"s responsiveness to complaints. )he also found that
consumers who blame the dissatisfaction on the marketin institutions, rather than themselves
or their own behavior, were more likely to enae in neative WOM.
#hese findins are consistent with 9lodett et al. (4665) who indicated that consumers"
tendency to enae in neative WOM was larely dependent on their perception of Austice as
it related to the complaint. #hat is, consumers were less likely to enae in neative WOM if
they felt that the procedures for complainin and the provider"s response (i.e. outcome) were
fair and if they had positive feelins about the manner in which they were treated. Other
factors that appear to be correlated with consumers" tendency to enae in neative WOM
include the level of inconvenience that resulted from the problem, the e?tent to which the
customer perceived that the problem was under manaement"s control, and manaement"s
perceived responsiveness to the customer"s problem (9rown and 9eltramini, 4686).
#he e?ploratory research described ne?t provides additional insiht into WOM"s content and
the human motivations and situational circumstances that stimulate WOM.
Methodology
#he oal of this research was to capture a series of $rounded events% from which broader
patterns could be discerned (Eeshpande, 4685( 3laser and )trauss, 46<7). /or our purposes,
these rounded events were actual incidents of WOM as described by the recipients of the
communication. #he individual events were then analyBed to provide insiht into the content
of WOM and the stimulants of WOM in the service marketplace.
Data collection
#he data collection procedure employed in the research was similar to that used by 2eaveney
(466>) in her study of customer switchin behavior. Fuestionnaires were distributed to 44@
Aunior and senior-level underraduate students enrolled in a collee of business at a university
located in the )outheastern portion of the +)-. 0ach student was asked to complete one
Duestionnaire based on their own WOM e?periences. #hey were also asked to distribute
Duestionnaires to two acDuaintances who were over the ae of @> and reDuest that they
complete them. -dditional Duestionnaires were distributed to a roup of ten raduate students,
all of whom were workin full-time and enrolled in an off-campus niht class at the same
university. 0ach raduate student was asked to complete one Duestionnaire and distribute four
other Duestionnaires to acDuaintances who were over the ae of @>. #hus, thouh students
were used to collect the sample, only @6 percent of the resultin pool of respondents were
students.
!espondents were first asked to indicate which of 77 services they had purchased durin the
previous si?-month period. #he 77 services listed were drawn from the Standard Industrial
Classification Manual (Office of Manaement and 9udet, 4687). #he purpose of this
Duestion was to stimulate subAects" thinkin and help subAects to focus on a limited array of
services.
#he si?-month time frame was selected to provide adeDuate time for respondents to have
made multiple service purchases. Get, respondents were able to remember the details of the
communication surroundin the purchase. #he si?-month time frame is consistent with 9itner
et al. (466=) who asked respondents to report events from the recent past and defined that
time period as si? to 4@ months.
!espondents were then asked to think about the last time someone told them somethin
positive about a service that they may have had an interest in purchasin. #hen, they were
asked to think about the last time someone told them somethin neative about a service that
they may have had an interest in purchasin. #hus, each respondent reported on two WOM
communication incidents, one positive and the other neative. &n reard to each event,
respondents were askedH (i) what service they were thinkin about, (ii) how lon ao the
communication had occurred, (iii) what was said, (iv) respondents" relationship with the
person to whom they were speakin, (v) how the particular WOM came about, (vi) whether
the WOM was part of a broader conversation( and, if so, (vii) how that broader conversation
came about. Open-ended response formats were used for each Duestion. -skin for the most
recent observation in each communication cateory (positive and neative) prevented
respondents from describin only the most emotion-laden events. !espondents were also
more likely to have an accurate recollection of the most recent event.
#he interity of the data was insured throuh the use of follow-up telephone interviews. One
respondent was chosen arbitrarily from each set of three (five for the M9- students) and
contacted by telephone to verify that they had personally answered the Duestionnaire. -
detailed e?amination of the Duestionnaires was undertaken when telephone contact could not
be established after several tries. #hese Duestionnaires had to meet three criteria to remain in
the sampleH
the handwritin had to be different for each Duestionnaire, indicatin that the student
had not fabricated the other responses(
the communication had to convey full and precise details, another indicator of
authenticity( and
the communication had to have face validity (i.e. seem reasonable).
#he stimulants of WOM were e?amined throuh the use of critical incident techniDue. 'ritical
incident techniDue is a content analytic research method that enables researchers to classify
open-ended research responses into meaninful cateories, thereby reducin broad-based
answers into more relevant, manaeable bits of information (Weber, 468>, p. >). /or the
purposes of our research, critical incidents were defined as any event or events that led the
subAect to communicate via the spoken word, either positively or neatively, reardin a iven
service.
'ontent analysis was also used to e?amine the substance of the WOM itself. &n this case, the
analysis focused on the substance of the communication rather than the critical incidents that
led to the communication.
+ategory development, assessment of sample si/e, and assessment of content validity
and relia"ility
#he data collection process resulted in a total of =;@ critical incidents. )ome of these
responses were unusable and were, therefore, eliminated from the study. )everal of the
responses were eliminated because the respondents had inadvertently based their answers on
communication that related to a product rather than a service. )ome were eliminated because
the individual with whom the communication occurred was a salesperson or other employee
who was workin for the provider of the service. Other responses were discarded because the
answers were Auded to be too vaue while still others were discarded as a result of the
sample validation procedure described previously. -fter the elimination of the unusable
responses, 545 responses remained for the e?amination of WOM"s contents. 9ecause 46 of
the usable responses did not contain stimulus-related information, @6= responses remained for
the e?amination of WOM"s stimulants.
#he critical incidents were subdivided into a classification sample and a holdout sample
consistin of 4;; responses. #he classification sample consisted of 46= cases for the testin of
WOM"s stimulants and @45 cases for the testin of its contents. #he identification and
classification of stimulants was based primarily on the open-ended Duestion in which
respondents were asked to $Iplease indicate, as specifically as possible, how this particular
word-of-mouth communication came about (i.e. what stimulated the conversation).% #he
identification and classification of contents were based primarily on the Duestion, $:lease
indicate, as precisely as possible, what you were told.%
#he analysis of WOM"s stimulants resulted in the identification of ten mutually e?clusive and
e?haustive cateories from the classification sample. (While the cateories were mutually
e?clusive and e?haustive, some responses contained elements of two or more cateories. &n
these cases, the researcher"s task was to determine the primary stimulus.) #he incidents in the
holdout sample were then added to the analysis. ,o additional cateories emered as a result
of the addition of these 4;; incidents.
#he analysis of WOM"s contents resulted in the identification of three mutually e?clusive and
e?haustive cateories from the classification sample (#able &&). -ain, no additional
cateories emered when the 4;; cases in the holdout sample were added to the data set.
#hese results indicate that the sample siBe was adeDuate for the testin of both WOM"s
stimulants and its contents. -ccordin to /lanaan (46>=, p. 5=5), $/or most purposes, it can
be considered that adeDuate coverae has been achieved when the addition of 4;; critical
incidents to the sample adds only two or three critical behaviors.% #he emerence of no
additional cateories after the addition of 4;; new cases also provides stron evidence of
satisfactory content validity (/lanaan, 46>=( 2eaveney, 466>( !onan and .atham, 467=).
- second Aude was asked to sort the incidents into the cateories and subcateories provided
by the first Aude and to create new cateories, if appropriate. #he level of initial interAude
areement under this procedure was 8> percent for WOM"s stimulants and 6= percent for its
content. While there is no accepted standard for evaluatin the reliability of such nominally
coded data (:erreault and .eih, 4686), similar levels of areement have enerally been
considered an indication of satisfactory reproducibility (9itner et al., 466;( 2eaveney, 466>).
#he two Audes then re-e?amined the responses on which they disareed. #his re-e?amination
procedure eventually resulted in an interAude areement level of 4;; percent for both
WOM"s stimulants and its content. #hese classifications then became the benchmarks aainst
which the third Aude"s classifications were compared.
#he third Aude"s cateoriBation, compared to the benchmark, resulted in an interAude
areement of 7@.8 percent for WOM"s stimulants and 6;.8 percent for its content. /ollowin
the procedure used for the second cateoriBation, the three Audes re-e?amined the responses
on which they disareed. -ain, the re-e?amination procedure eventually resulted in an
interAude areement level of 4;; percent for both WOM"s stimulants and its content.
Results
#he survey respondents came from a relatively broad cross-section of the population. Of the
respondents, 56 percent were @> years of ae or less, @6 percent were between @< and =;
years of ae, and 5@ percent were =4 years of ae or over. /ifty-eiht percent of the
respondents were female and =@ percent were male. 'aucasians were heavily represented with
65 percent of the respondents fallin in that ethnic cateory. Over 5> percent of the
respondents had a collee deree or hiher while another >; percent had at least some collee
education althouh they were not collee raduates. &n terms of marital status, =8 percent of
the respondents were married, =7 percent were sinle, and the rest were divorced, separated,
or widowed. #wenty-nine percent of the respondents were students and 48 percent were
professional or technical workers. Other occupations represented by the survey respondents
wereH business owner (=.; percent)( farm manaer (@.8 percent)( other e?ecutive or manaer
(>.7 percent)( sales clerk or clerical worker (8.> percent)( sales representative (;.< percent)(
craftsworker, foreman, or machine operator (@.5 percent)( laborer, service worker, or farm
worker (=.> percent)( homemaker (=.> percent)( retired (@.8 percent)( unemployed (4.7
percent)( and other (4>.5 percent).
#he survey responses focussed on a broad rane of services with a total of 7@ different service
industries represented. #hese service industries included such traditional services as banks,
hospitals, telecommunications services, barbers and hairdressers, home repair services, and
automobile repair shops. - few of the responses also focussed on less traditional services such
as tannin salons and body piercin.
-nalysis of the open-ended Duestions revealed ten cateories of stimuli that led to WOM
(#able &). #he receiver"s (of the communication) felt need was the most freDuently identified
WOM stimulus with >;.5 percent of the stimuli fallin into this cateory. /or e?ample, one
receiver asked specifically if the communicator knew of a ood travel aency that would help
him plan his honeymoon. -nother conversation occurred Aust before -pril 4> and focussed on
an individual"s need to find a ta? preparation service.
'oincidental WOM was the second most freDuently identified cateory with 48.= percent of
the stimuli. /or e?ample, one discussion that was classified as coincidental in nature bean
with a conversation amon co-workers and relatives about prenancies and babies. #his
discussion led to the transfer of neative information about a particular medical doctor.
-nother coincidental communication bean with a eneral discussion of plans for the
weekend. #his conversation led to favorable comments about the Duality of a particular
restaurant and to a recommendation that the respondent eat there.
WOM that was stimulated by the communicator"s satisfaction or dissatisfaction with the
service was the third most freDuently identified cateory with 8.8 percent of the responses.
/or e?ample, one positive WOM occurred when a communicator shared her pleasure with the
Duality of pictures received from a particular photoraphy studio. - neative communication
occurred after a communicator failed to have his automobile transmission satisfactorily
repaired even thouh he returned it to the repair shop on two different occasions.
)omeone"s observance of the purchase or its outcome served as a stimulant to WOM
communication in <.> percent of the cases. /or e?ample, a positive communication about a
tannin salon bean with a compliment about the communicator"s suntan. )imilarly, a
neative communication bean when the receiver commented on the communicator"s new
hair style.
&nterestinly, <.4 percent of the communications were stimulated when two or more people
were collectively tryin to select a service. Of the 48 communications that fell into this
cateory, 45 pertained to the selection of restaurants (i.e. people were tryin to decide where
to eat). One positive communication occurred when room-mates were tryin to decide which
lon-distance service they wanted to use in their house. - neative communication came
about when ne?t-door neihbors were collaboratin on the purchase of roofin services.
#he remainin five cateories of stimuli that were identified collectively accounted for less
than 4; percent of the total responses. #hese cateories wereH
communication stimulated by the marketin oraniBation"s promotional efforts(
communication stimulated by the receiver"s (not communicator"s) satisfaction or
dissatisfaction(
communication stimulated by someone"s (other than the recipient of the information)
observance of the need for a service(
communication stimulated by media e?posure (not related to the marketin
oraniBation"s promotional efforts)( and
unsolicited comment.
#he open-ended responses were analyBed further to determine the content of the WOM. #his
e?amination revealed three cateories - Duality-only, price-only, and value. Our definition of
value was consistent with Jeithaml (4688, p. =) who suested that $perceived value is the
customer"s overall assessment of the utility of a product based on perceptions of what is
received and what is iven.% #herefore, communications that contained elements of both
Duality and price were placed in the value cateory. -s indicated in #able &&, Duality-only
communication accounted for <@ percent of the communications described. 1alue was the
focus of 5@.5 percent of the communication, and price-only accounted for >.8 percent of the
communication.
&n summary, the results of our research suest that factors that are likely to stimulate WOM
include a stronly felt need on the part of the receiver, coincidental communication relatin to
a broader subAect, or a hih level of satisfaction or dissatisfaction on the part of the
communicator. #he other cateories of stimuli that were identified accounted for smaller
percentaes of the total responses. &nterestinly, none of the WOM analyBed pertained only to
the presence or absence of an attribute (e.. $#he dry cleaner opens at 7H;; am). &n all cases,
such attribute-oriented communication also contained a Duality-dimension (e.. $the firm was
honest, dependable, and up-to-date on the ta? laws%) or value-dimension (e.. $the individual
who performed the repair did a ood Aob at a reasonable price%). /iure 4 encapsulates the
WOM communication process.
-mplications for managers
#he importance of positive WOM is enerally reconiBed in the service marketplace. #he
recent emphasis on the creation, measurement, and manaement of service Duality is closely
tied to the need to enerate favorable WOM, customer satisfaction, and repeat purchases. #his
research has provided additional insiht into WOM"s content and the factors that are likely to
stimulate WOM. &n so doin, it has moved us a step closer to answerin a Duestion that is
central to the marketin of services - how can service marketers more effectively influence
the WOM processC Our research results pertainin to the factors that stimulate WOM and to
its content ive rise to the followin strateic uidelines.
#eceiver$s need for information
/irst, as indicated in #able &, our research suests that WOM is most often stimulated by the
receiver"s need for information. &ndeed, this is clearly the dominant stimulus, provokin fully
half of the incidents included in the study. Other than coincidental conversation, the most
difficult type of stimulus to influence, no sinle stimulus accounted for more than 6 percent of
the incidents we studied.
#his suests that service marketers" efforts to stimulate WOM may often center on the
receivers" felt need for information. #o benefit from WOM triered by this felt need, service
marketers should make every effort to identify the process by which consumers ather
independent information about services and place their offerins in the path of consumers
seekin information. )atisfaction surveys of current customers and initial surveys of potential
new customers can provide insiht into customers" information atherin behaviors. &t is
especially important that service firms routinely ather information from new clients about
the sources of information they used when selectin the firm. #his information, in turn, allows
the oraniBation to taret the specific WOM behavior of potential clients.
&n addition to these efforts, it is vital for the service oraniBation to position itself in the
obvious path of potential customers who are seekin information. #his effort miht involve
sponsorin or participatin in seminars, workshops, andKor community events related to the
marketer"s offerin of knowlede-based services. :hysicians roups that offer preventive care
or wellness prorams miht sponsor or support community athletic events or health awareness
days. #ravel or financial service providers should seek out opportunities to visit travel or
investment clubs, teach continuin education courses on these topics, or participate in
community events focussin on these topics. Home andKor auto repair services miht establish
reconition and credibility amon consumers by offerin basic do-it-yourself seminars on
common repair tasks.
#he &nternet and World Wide Web offer uniDue opportunities to reach selected customers on
the prowl for service-related information. Eiscussion lists or +senet roups commonly focus
on topics of special interest to subscribers. :articipation in these roups with an e-mail
sinature file which clearly identifies the service provider and supplies contact information
can be a fruitful source of leads. )imilarly, Web paes which support the $free% e?pectations
of WWW users while providin opportunities for reater interaction with more interested
users can be an effective way to establish connections with customers who are seekin
information. /or e?ample, a travel aency miht provide links to destination information sites
andKor online reservation systems to attract potential customers to their services. )imilarly, a
financial services firm miht offer access to stock Duotes or company information to potential
investors, or a bank miht offer online information about loan and deposit rates to potential
account holders.
9oth -maBon.com (HG:0!.&,2 httpHKKwww.amaBon.com) and 1irtual 1ineyards
(HG:0!.&,2 httpHKKwww.virtualvin.com) illustrate successful implementations of
information-based Web marketin strateies. #houh both firms sell products, books in the
former instance, wine and ourmet food in the latter, their competitive advantaes are service
and information related. &n the case of -maBon.com, users employ powerful search enines
toH find titles, receive lists of similar titles, have access to reviews, authors", publishers" and
readers" comments, subscribe to topic-specific notification services and, if all else fails,
interact with a prompt, helpful customer service staff by e-mail.
1irtual 1ineyards provides recommendations, information, and reviews of its wines. &ts
offerins include products of smaller producers or limited vintae that can be difficult to find
in all but the most e?tensive wine shops. #hey offer food products as well, in addition to
collectors" and ift sets of food and wine. )upplementin the value of their products are
collections of menus and recipes, complete with wine recommendations.
)ome of the services offered by -maBon.com and 1irtual 1ineyards are electronic substitutes
for the services offered by traditional retailers while other services are not readily available in
traditional outlets. Other service marketers can emulate these &nternet marketin strateies by
usin additional, supplemental, and free information to enhance the value of their offerins.
Coincidental conversation
'oincidental conversation was the second most freDuent stimulus of WOM communication in
the study, accountin for 48 percent of incidents. #his may also be the most difficult stimulus
to influence, in that service-related communication arises from eneral conversation rather
than specific discussion of the service. Marketin strateies directed at strenthenin ties
amon customers and potential customers may enable service marketers to take advantae of
this aspect of WOM (!einen and 2ernan, 468<). /or e?ample, several companies
headDuartered in .ouisville, 2entucky invite customers and potential customers from around
the world to the 2entucky Eerby. #hen, they make special efforts to ensure that potential
customers have opportunities to interact with satisfied customers durin the various Eerby
festivities. /ollowin this e?ample, service providers miht sponsor social, civic or cultural
functions to which both current and potential customers are invited. #he obAective is to create
the opportunity for informal interaction in an environment associated with the provider, even
thouh the environment may not be directly related to the service.
#he importance of coincidental conversation as a stimulus also offers a rationale for the
eneral community service promotions in which service providers often enae. 9ecause
almost @; percent of service-related communication occurs within the conte?t of more eneral
conversation, it makes sense for service marketers to establish a presence where those
conversations occur. #hus sponsorship of cultural events, advertisin in local scholastic
athletic prorams or venues, and participation in community fairs andKor festivals are all
e?amples of activities which place an oraniBation in a noticeable position in forums where
substantial interpersonal communication occurs.
#he strateic development of novel and interestin consumption e?periences may also
stimulate coincidental WOM (9one, 466@( 466>). /or e?ample, Macaroni 3rill restaurants
feature a festive atmosphere, e?troverted servers who use crayons to write their names on
paper tablecloths, and lare Aus of wine at each table. )uch uniDueness may stimulate
customers to tell others about their consumption e?perience.
Communicator$s satisfaction or dissatisfaction
-bout 6 percent of the WOM incidents in the study were stimulated by the communicator"s
satisfaction or dissatisfaction. )inificantly, these incidents were more than twice as likely to
include neative, rather than positive, content. #hus, communicator-initiated WOM appears
more likely to be enerated by dissatisfaction than by satisfaction. #hese results are consistent
with !ichins (4685) and 9lodett et al. (4665) who have documented that inadeDuate redress
of rievances often leads customers to enae in neative WOM communication. On the
other hand, creatin hih levels of service Duality should lead to customer satisfaction and
stimulate positive WOM (9one, 466@).
#herefore, service marketers are presented with the double challene of stimulatin satisfied
customers" communication while limitin the impact of dissatisfied customers. 'learly, the
first step in this process is to offer service that is of hih Duality. #hen, service marketers
should insure that a viorous, responsive system for addressin customer complaints is in
place before enain in efforts to stimulate WOM.
Havin minimiBed the incidence and motivation for neative WOM, service marketers may
stimulate positive WOM by puttin prospective customers in contact with satisfied customers.
9anks have successfully stimulated interaction between current and prospective clients by
providin social activities for affluent senior citiBens, risin professionals, or people startin
new businesses. )imilarly, securities firms have sponsored investment clubs for members
with similar financial obAectives and health care oraniBations have formed support roups for
patients facin common health problems or underoin similar treatment procedures. /irms
may also stimulate positive WOM from satisfied customers by creatin positive incentives for
referrals. Eiscounted services andKor referral fees are common tools for achievin this end.
/ile et al. (466=) also suest that marketers may use seminar sellin with both current clients
and potential clients in attendance.
/inally, it is important to note the dominant role of receivers in initiatin WOM
communication incidents. &n this study, WOM was far more likely to be initiated by receivers"
need for information than by communicators" satisfaction level. #his implies that, in the effort
to e?ploit service-related WOM communication, providers should focus much of their
attention on interceptin prospects" information seekin behavior rather than relyin primarily
on testimonials from satisfied customers. /or e?ample, *ewish Hospital of .ouisville,
2entucky provides customers with a broad array of information and services throuh health
information centers that are strateically located in reional shoppin malls. /or e?ample,
consumers with hih blood pressure may be iven information about a $heart healthy% diet
(Waner et al., 466=).
Someone$s observance of t!e purc!ase or its outcome
)ome of the WOM in our study was stimulated by someone"s observance of the purchase or
its outcome (<.> percent) while other WOM was stimulated by an observance of the need for a
service (@.= percent). )till other WOM was stimulated by the receiver"s satisfaction or
dissatisfaction (@.7 percent). -ll three of these observations suest that service marketers
may develop strateies for rewardin people for referrals. #he techniDues for motivatin
referrals discussed earlier are relevant for these situations as well. &n addition, these incidents
illustrate the need to identify vividly the oraniBation with the completed service. &f possible,
someone observin the benefits of a service purchase should be made aware of the identity of
the service provider. #he most obvious e?amples here are lawn sins for construction or
landscapin services or windshield shades for car repair or beautification shops. Other
instances miht include complimentary caps or #-shirts for those participatin in a clinic"s
wellness seminar, a tannin service"s basic packae, or a hotel"s freDuent uest club.
%&o or more people collectively trying to select a service
Our research also suests that WOM may be stimulated when two or more people are
collectively tryin to select a service. Marketers may take advantae of this aspect of WOM
by aimin their promotion efforts at roups of people as well as individuals. #his observation
appears to be particularly relevant for restaurants since roups of people often make Aoint
decisions about where to eat. /or e?ample, restaurants miht offer discounts or
complimentary items to roups of four people from the same oraniBation at lunch time.
)imilarly, discounts may be offered for special occasion parties or to roups of four or more
who have attended a local cultural or civic event durin the dinner period. -lternatively,
business lunch clubs, in which members receive discounts for brinin business
acDuaintances for lunch, miht prove attractive. !estaurants miht also stamp freDuent uests"
business cards with a discount offer that could be used by the uest or passed on to friends
andKor colleaues. #he oal of all these approaches is to have the sponsorin restaurant
included in roup discussions and decision processes concernin restaurant selection.
Marketing organi'ation$s promotional efforts
Only a small percentae of the WOM in our study was stimulated by the marketin
oraniBation"s promotional efforts. Moreover, the maAority of incidents triered by this
stimulus involved neative communication content. #his suests that service marketers may
need to establish the stimulation of WOM as a promotional obAective and, then, strateically
desin their promotions to accomplish this obAective. /or e?ample, M'& has successfully
stimulated WOM as well as referrals throuh its $/riends and /amily% proram.
-lternatively, service marketers miht reassess their promotional obAectives relative to WOM
communication. #hat is, promotional effectiveness may be measured in terms of both the
number of WOM incidents enerated and the content of the communication. ,o matter the
stimulus which prompts a WOM incident, if the content of the communication is consistent
with the content of promotional material, the promotional effort may be deemed successful.
&ndeed, this miht be the more desirable result, as the role of communicator has now passed
from the less credible marketer to the more credible personal source of information.
(uality"oriented )*M
-s indicated in #able &&, most of the WOM e?amined in our study focussed on Duality only.
WOM containin elements of both Duality and price was classified as value-oriented and
constituted the second larest cateory. - relatively small portion of the WOM e?amined
focussed on price only.
)ince <@ percent of the incidents in this study were cateoriBed as Duality-only
communication and 5@.5 percent of the incidents focussed on value (containin elements of
both Duality and price), it is difficult to overestimate the importance of Duality in service-
related WOM communication. #he service oraniBation"s first challene is to understand how
its clients perceive Duality as well as their service Duality e?pectations. &t must then insure that
it can meet or e?ceed these e?pectations on a reular basis. &f at all possible, Duality
uarantees should then be made in very clear lanuae, with very clear remedies for
deficiencies. -n e?ample is Holiday &nn"s $complete satisfaction or your stay is free%
philosophy. )imilarly, a restaurant miht offer ten-minute service for lunch, with free
appetiBers or desserts for loner waits. -utomobile repair shops miht offer loaners or rides to
home or work for customers whose cars are not finished in one day. 9anks miht offer free
lunches or tickets to athletic or cultural events to customers whose loan applications are not
processed in a specified period.
'learly, uarantees such as these are not possible in every service profession. :hysicians
cannot uarantee favorable response to treatment, nor can stockbrokers uarantee profitable
investments. However, these providers miht well be able to make process uarantees. /or
e?ample, physicians can uarantee office waits of no more than 5; minutes for patients with
appointments while stockbrokers may uarantee that trades will be e?ecuted within 5;
minutes. Eeviations from these promises may be rewarded with complimentary health-related
products or discounted commission rates.
#he offerin of such uarantees has several advantaes. /irst, it reDuires service providers to
consciously understand their capabilities relative to consumer e?pectations. )econd, it
provides performance oals for the providers" employees and concrete benchmarks for
customers. #hird, and most relevant to this study, it provides concrete, memorable content for
measurin the value of service provided. #his, in turn, would set the conte?t for WOM
communication relative to the service oraniBation.
Price" and value"oriented )*M
- number of other strateies are available to service marketers who wish to stimulate price-
and value-oriented WOM, particularly those who are low-price or hih-value providers in
their markets. 'ommunication obAectives for low-price providers may center on the provision
of price information throuh media advertisin, point-of-purchase material, and sales
promotion. #o attract value-oriented consumers, providers miht offer priceKvalue ladders,
which tie the price paid directly to the level of service desired. /or e?ample, -meritrade
(www.ameritrade.com) is a discount brokerae firm which chares different commissions for
orders placed online, electronically with a touch tone phone, or throuh a live phone call with
a broker. 'lients select their price by determinin which level of service they desire.
0imitations and directions for future research
#his research is subAect to several limitations. /irst, althouh the survey respondents
represented a relatively broad cross-section of the population, they were either students or the
acDuaintances of students. While the data collection method was consistent with previous
content-analytic research (2eaveney, 466>), there is no uarantee that the entire rane of
WOM was included in the study. #he elimination of appro?imately one-fourth of the survey
responses may have e?acerbated this limitation. /uture research may verify the
comprehensiveness of the data and the eneraliBability of the results.
)econd, the research desin reDuested that respondents describe the last communication that
occurred. #his desin resulted in a description of the $last-remembered% communication
rather than the last communication that actually occurred. #his limitation is problematic if the
content of more memorable communications is different from the content of less memorable
communications. #herefore, future research may utiliBe an e?perimental desin or other
research procedure to isolate the last communication that occurred rather than the $last
remembered% communication.
#he relative impact of positive versus neative communication on buyer behavior constitutes
still another avenue for future study. Much of the previous research pertainin to WOM in the
marketplace has focussed on neative WOM and its influence on buyer behavior while less
emphasis has been iven to positive WOM. Our study made no attempt to delineate the
relative impact of positive or neative WOM on purchase behavior.
/inally, future research may focus on the interation of WOM into a more comprehensive
model of service purchasin behavior. )uch a model would address the interrelationship
between WOM and such variables as satisfaction, output WOM (i.e. what the purchaser tells
someone else), intent to repurchase, perceived value, perceived Duality, perceived
performance, and initial purchase behavior.
12ecutive summary and implications for managers and e2ecutives
)preadin the word - a key part of service communications stratey
Buying things is not something we do in isolation from those around us - family, friends,
workmates and neighbors. Shopping is a social experience and an important part of our lifes
acti!ity. So its no surprise that we share our experiences - good and bad - with others.
"roducts are adopted as much because of word-of-mouth communications as because of
acti!e promotions by the company making those products.
#espite this reality and managers awareness of word-of-mouth, we still feel somewhat
baffled by the processes in!ol!ed and the ways in which word-of-mouth communications
affect our business. $s a result of this bafflement, we take customers that arri!e on personal
recommendation but do little to encourage them to carry on the tradition of spreading the
word.
%irst, we need to understand why people are affected by and indulge in word-of-mouth
communications. Mangold et al. pro!ide us with some insights into the reasons for the
effecti!eness of word-of-mouth communications&
"eople need information about products and ser!ices. 'his is often the starting point
for (spreading the word). $ friend asks ad!ice about a decent restaurant, a good
place to stay or for the name of a competent plumber. *e are delighted to be asked
and gi!e wholeheartedly of our ad!ice and expertise. Mangold et al. report that this
information seeking is the dominant stimulus for word-of-mouth communications.
Comments about ser!ices or products arise during casual con!ersation. "eople !ery
often mention experiences in the course of a normal con!ersation. +obody is seeking
specific information with a !iew to purchasing something but the information or
opinion arises - unsolicited - during the con!ersation. ,i!en the importance of
shopping, people will relate tales describing a good or bad experience.
*hat is clear from these two reasons is that people seldom - if e!er - set about passing on
information about a product or ser!ice without some reason. +obody wakes up and decides to
tell all their friends what a great place $ls -estaurant is. Managers who want to take
ad!antage of word-of-mouth communications need to take a more subtle approach.
Suggestions for stimulating our customers to recommend our ser!ice or at least talk about it
might include&
0?hortation. 'heres no harm in asking customers who express satisfaction to tell
their friends. 'hey might be more inclined to do so if you ask them and it will surely
do no harm.
&ncentive. Mail order companies and subscription maga/ines ha!e used the
recommend-a-friend incenti!e as an effecti!e way of bringing in new custom. By
offering a gift, discount or other reward to customers who recruit new customers
pro!ides a positi!e benefit to the person (spreading the news). 'here is a limit to the
approach since 0as multi-le!el marketing and pyramid selling ha!e shown1 there is a
fine line between a fair incenti!e and exploiting friendships.
#aretin opinion formers. Certain people get listened to more or simply speak to
more people than most folk. *e can call these (opinion formers) since their influence
is greater because of the breadth of their contacts. "riests, publicans, postmen and the
$!on lady all speak to large numbers of people. 'argeting your message here can
ha!e an effect that exceeds a similar but untargeted approach.
)peakin to clubs. 'here are plenty of local organi/ations that need speakers each
and e!ery week. 2ffering yourself as a speaker can result in positi!e and fa!orable
word-of-mouth. 3!en better - offer a discount or other incenti!e to the people you
speak with. +ot only will they be more likely to use you but it creates a further positi!e
spin and encourages the listeners to (spread the word).
)ettin up a club. %ound your own club. 4et your customers run it and pro!ide
facilities, ad!ice and other support. 'heyll feel closer to you - almost a part of the
business - and be more inclined to tell their friends. 'he club neednt be too formal
but should ha!e a purpose and someone to lead it.
!unnin a newsletter. +othing too fancy. 5ust a few pages of thoughts, ideas, product
information and customer comment. ,et customers to contribute with letters, stories
or ideas. 'hese days you can e!en extend the newsletter by setting up a *eb site.
Mangold et al. gi!e a few examples of how this can succeed in getting people to talk
about your product or ser!ice.
3ivin away freebies. -eward your regular customers with some free product or
ser!ice. #ont make this too formal a process, simply take ad!antage of one of their
!isits to thank them by gi!ing a free meal, oil change or whate!er you offer. 6ou can
be sure that they will tell their friends 7ust how good you are and maybe e!en
encourage their friends to try you out.
'hese are 7ust a few examples of how to get people talking about what you do. 'here are
hundreds of other ideas inside your head. Sit down. %ish out a few thoughts and try them out.
Most ser!ice organi/ations are part of the community. $ct like you are and you will get the
benefit of others treating you as a friend rather than as a mere business. $nd once youre a
friend people want their other friends to meet you.
(- prLcis of the article $Word-of-mouth communication in the service marketplace%. )upplied
by Marketin 'onsultants for M'9 +niversity :ress.)
%able + Catalysts that stimulate word-of-mouth communication
%able ++ Categories of word-of-mouth communication
,igure - *ord-of-mouth communication process
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