Word-of-Mouth is a critical driver of business success
This article summarises the research and rationale behind Electronic Word-of-Mouth (EWOM) and its influence on trust.What is EWOM?
People do not care as an organisation what you say about yourself. But they do care, deeply, about what other people say.
De Valck and Rosario (2020, p427) define eWOM as “Consumer-generated, consumption-related communication that employs digital tools and is directed primarily to other consumers.” Hennig-Thurau et al (2004) give a more specific definition of eWOM that defines its limits and identifies eWOM recipients and suppliers: “any favourable or negative comment made about a service or organisation by future, present, or past consumers that is made available to a large number of individuals and groups via the Internet”. This definition of eWOM is considerably widespread in research literature, but crucially it does not highlight that the source of the messages be seen by receivers as non-commercial, as other definitions of eWOM do. This is because popular online reviewers might be rewarded to give their honest opinions on a product, service, brand, or company.
Ismagilova et al (2017, p11) conclude that “eWOM is the dynamic and ongoing information exchange process between potential, actual, or former consumers regarding a product, service, brand, or company, which is available to a multitude of people and institutions via the Internet”. This concept highlights that eWOM communication is a dynamic and continuing process since these messages can spread spontaneously online. Additionally, this definition covers the content and source of these suggestions, as well as their online nature.
The Rationale behind EWOM
Before the advent of modern digital marketing, a forward-thinking business would be consumed by traditional ‘service marketing’, involving models such as the 7Ps, Porter’s Five Forces and Herzberg’s two-factor theory. Every business's research, development and marketing focused on superiority in product and price, which resulted in marginal differentiation and minimal competitive advantage at best. For most marketers, something very powerful was realised: People are more rational than logical in their decision-making. Godin (2018, p23) argues that a false assertion is the inherent basis of microeconomics: “The rational agent is assumed to take account of available information, probabilities of events, and potential costs and benefits in determining preferences, and to act consistently in choosing the self-determined best choice of action,” he quotes from Wikipedia. “When in doubt, assume that people will act according to their current irrational urges, ignoring information that runs counter to their beliefs, trading long-term for short-term benefits and most of all, being influenced by the culture they identify with.”
Individual attention, safety, happiness, joy, and success, all of these became mythical qualities, asserts Rajamannar (2021), that people could attain like the membership benefits in a secret club. Once a brand had gained an emotional foothold, it could hold that ground for good. Furthermore, according to West, Ford, and Ibrahim (2015), postmodern thinking about marketing strategy indicates that individuals are becoming increasingly knowledgeable and sceptical about 'traditional' marketing. Customers are accustomed to reading reviews or recommendations before making additional inquiries about professional service businesses. Customers who are more informed have far higher expectations, which complicates the task of marketing teams.
The EWOM Effect
The primary driver of the effectiveness of eWOM is trust, and the relationships that underpin the strength of this trust. We have three distinct dimensions to consider.
- The trusted cohort – Levels of trust differ, depending on the person who has shared the information (the communicator).
- The platform – Even when sent via a trusted source, eWOM seems to have a tertiary moderator, one of the communication platform itself. eWOM sent as a direct message is far more persuasive than information from any other source.
- The genesis of the information – eWOM that is perceived to have been marketer generated is held in the least regard, in stark comparison to eWOM from a trusted source.
Causal research examines the origins of WOM from the receiver's and sender's perspectives. According to some studies, the primary antecedents of WOM include attitude toward the brand or service (Holmes and Lett, 1977), contentment (Gremler, Gwinner and Brown, 2001), and discontent (Richins, 1983). Among the reasons for engaging in WOM conversations include the alleviation of cognitive dissonance, economic incentives, the desire to be viewed as knowledgeable by others, and compassion (Arndt, 1967). Consumers rely on word-of-mouth communication in instances when official sources of information have failed to mitigate the risks they perceive, and ambiguity (Murray, 1991).
Platforms may be split into two types: those created by consumers and those created by marketers. The fact that an online platform was created by consumers or marketers might be a critical indicator for consumers when evaluating the legitimacy and usefulness of eWOM messaging (Hajli, 2016). It has been found that direct electronic direct messages have far more influence on a customer's intention to enquire than eWOM derived from sources such as social media platforms, review websites and blog articles.
Wirtz and Chew (2002) discovered that people engage in WOM conversations more frequently when they have strong links (e.g., family and friends) than when they have weak links (e.g., rarely contacted acquaintances). Recent industry research from Research indicates that most consumers place a higher premium on the f-factor (friends, family, Facebook fans, and Twitter followers) than on marketing communications. The majority seek guidance from strangers on social media and place a higher premium on their recommendations than they do on advertising and professional views
Summary
Businesses must be equipped to measure the volume and effect of eWOM. When social media generates eWOM, this enables marketers, according to Davis (2018), to determine the size of the audience that, for example, indirectly and directly visits a website. The data for the digital usage footprint is made up of both direct and indirect clicks, which are added together and then divided by direct clicks.
Kotler, Kartajaya, and Setiawan (2017) previously asserted that brand-customer relationships should no longer be vertical, but rather horizontal. Customers should be viewed as brand peers and friends. The brand should demonstrate its real nature and be forthright about its true worth. Only then can a brand be trusted.
Prior to the era of connectivity, loyalty was frequently described in terms of retention and repurchase, suggests , who state that customer service superiority drives loyalty which in turn increases positive word-of-mouth. Loyalty, in the age of connection, is finally defined as the readiness to advocate for a brand. A client may not require or be able to consistently repurchase a certain brand (e.g., due to a lengthier purchase cycle, or unavailability in certain locations). However, if the consumer is satisfied with the brand, he or she will promote it even if they are not actively using it. The revised customer service commitment should be consistent with this revised concept of loyalty.
References:
- 1 - Arndt, J., 1967. Word of mouth advertising: a review of the literature. Advertising Research Foundation.
- 2 - Davis, J., 2018. Measuring Marketing. 3rd Edition.
- 3 - De Valck, K., Rosarion, A., Sotgiu, F., 2020. Conceptualizing the electronic word-of-mouth process: What we know and need to know about eWOM creation, exposure, and evaluation. Journal of the Academy of Marketing Science.
- 4 - Godin, S., 2018. This is Marketing. 1st Edition.
- 5 - Gremler, D., Gwinner, K., Brown, S., 2001. Generating positive word‐of‐mouth communication through customer‐employee relationships. International Journal of Service Industry Management.
- 6 - Hajli, N., 2018. Ethical Environment in the Online Communities by Information Credibility: A Social Media Perspective. Journal of Business Ethics.
- 7 - Hennig-Thurau, T., Gwinner, K., Walsh G., and Gremler D., 2004. Electronic word-of-mouth via consumer-opinion platforms: what motivates consumers to articulate themselves on the internet?. Journal of Interactive Marketing.
- 8 - Holmes, J., and Lett, J., 1977. Product sampling and word of mouth. Journal of Advertising Research.
- 9 - Ismagilova, E., Dwivedi, Y., Slade, E., and Williams, D., 2017. Electronic Word of Mouth (eWOM) in the Marketing Context. 1st Edition.
- 10 - Kotler, P. Kartajaya, H., and Setiawan, I., 2017. Marketing 4.0 – Moving from Traditional to Digital. 1st Edition.
- 11 - Kotler, P. Kartajaya, H., and Setiawan, I., 2021. Marketing 5.0 – Technology for Humanity. 1st Edition.
- 12 - Murray, K., 1991. A Test of Services Marketing Theory: Consumer Information Acquisition Activities. Journal of Marketing.
- 13 - Rajamannar, R., 2021. Quantum Marketing. 1st Edition.
- 14 - Richins, M., 1983. Negative Word-of-Mouth by Dissatisfied Consumers: A Pilot Study. Journal of Marketing.
- 15 - West, D., Ford, J. and Ibrahim, I., 2015. Strategic Marketing. 3rd Edition.
- 16 - Wirtz, J., and Chew, P., 2002. The effects of incentives, deal proneness, satisfaction and tie strength on word‐of‐mouth behaviour. International Journal of Service Industry Management.
