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samedi 10 septembre 2011

Effects of positive & negative Word of Mouth

What is the impact of Word-of-Mouth (WOM) on brand purchase probability ?

Robert East, Kathy Hammond and Wendy Lomax, (2008), Measuring the impact of positive and negative word of mouth on brand purchase probability International Journal of Research in Marketing, 25, 215–224

The authors use two methods, three measures of impact, based on 15 product and service categories to evaluate this impact.

 "Word of mouth (WOM) is informal advice passed between consumers. It is usually interactive, swift, and lacking in commercial bias".

Main results

1 - The effect of Positive WOM is generally greater than Negative WOM.  

Positive WOM is 76% more influential than negative WOM.
Overall, 64% customers claim that positive WOM affected their buying decisions, and 48% customers tell that negative WOM affected their choices.
If you received a positive WOM, the average positive shift for probability of brand purchase is:  + 20%
If you received a negative WOM, the average positive shift  for probability of brand purchase is:  - 11%

Warning ! The effect of WOM depends on the product category. For instance, for a restaurant, a positive WOM increases the purchase probability up to 39 points, a negative WOM decreases this probability from 47 points. For an hair colorant : positive WOM = + 19 pts, negative WOM = - 8 pts.

source : East, Hammond and Lomax, (2008), International Journal of Research in Marketing, 25, 215–224

2. The impact of both Positive WOM and Negative WOM depends on the initial level of pre-WOM probability of purchase, the strength of expression of the WOM, and whether the WOM is about the respondent's preferred brand.

3. Resistance: Consumers resist negative WOM on brands they are very likely to choose, and resist positive WOM on brands they are very unlikely to choose.
source : East, Hammond and Lomax, (2008), International Journal of Research in Marketing, 25, 215–2
Pre WOM probability of purchase : the probability of brand choice before receiving a word of mouth advice about brand
NWOM = negative Word-of-mouth (reversed signs) ; PWOM = positive Word-of-Mouth

What are the main sources of information when choosing brands ?

In a prevoius research based on 23 products and services categories, the authors show that the percentage of brand choice that related to recommendation (WOM) is 31 %. This is over twice the amount attributable to advertising (14 % ) and is also more than the amount assigned to personal search (21 %). 

Clearly, recommendation (WOM) appears to be the strongest basis of brand choice.

Source : Robert East,  Kathy Hammond, Wendy Lomax and Helen Robinson (2005), What is the Effect of a Recommendation? The Marketing Review, 5, 145-157


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