Complaint Management Unlocked. The effects of different variations of reactive versus proactive webcare on consumer responses and the mediating effect of customer expectations
Masterarbeit 2013 30 Seiten
Online platforms empower consumers to share their negative experiences with a broad public of fellow consumers on the Internet. Complaints expressed as negative electronic word of mouth (nWOM) have a great potential to damage companies accused in these publicly made complaints. This study investigates upon the most effective means for companies to counter nWOM by means of webcare. The results show that a loss of satisfaction and trust as well as negative eWOM behaviour after a service failure can be positively influenced depending on the content of a webcare response (accommodative vs. notice). These effects appear to be mediated by consumers’ expectations. Furthermore, although webcare communication strategy (proactive vs. reactive) does not influence satisfaction, trust and negative eWOM behaviour of senders of nWOM, the results show an influence of webcare communication strategy on positive eWOM behaviour. The findings of this study are discussed in the light of the potential of webcare to serve as a tool for online complaint management.
The internet and social media in particular offer consumers new platforms to express their satisfaction or dissatisfaction with companies and their products and services. The result is a wealth of electronic word-of-mouth (referred to as eWOM hereafter), defined as “any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the internet” (Henning-Thurau, Gwinner, Walsh & Gremler, 2004, p.39). EWOM takes place in a number of online information-sharing formats including social networking sites (e.g. Facebook), video-sharing platforms (e.g. YouTube), micro-blogging sites (e.g. Twitter) (Mangold & Faulds, 2009) or consumer review websites (Phelps, Lewis, Mobilio, Perry, & Raman, 2004). Various studies have found that despite its format, eWOM has strong effects on the consumers’ attitudes and purchase intention (Park, Lee, & Han, 2007; Kerkhof, Utz, & Beukeboom, 2012; Lee, Rogers, & Kim, 2009; Lee, Park, & Han, 2008). A percentage of 84% of consumers report, that they check consumer reviews online prior to a purchase decision (Retail Bulletin, October 2009). The literature shows that negative eWOM (nWOM hereafter) is hereby of more importance to consumers than positive eWOM (pWOM hereafter) when collecting information for their decision-making process (Sen & Lerman, 2007; Basuroy, Chatterjee & Ravid, 2003). Therefore, nWOM has a great potential to influence the decisions and attitudes of future potential customers and thereby causing damage to the company that is accused in nWOM (Sundaram & Webster, 1999).
Given the potential of nWOM to damage companies, such online communications have become a focus of attention and concern in many of them. Companies have thus started to monitor and respond to nWOM in the form of webcare (Fournier & Avery, 2011). Webcare serves two purposes. First, webcare is used as a means to restore and improve relationships with existing customers. By responding to nWOM using webcare in a timely manner, companies can solve the issues that caused existing customers to engage in nWOM, and thereby restore their satisfaction and trust. Second, when resolving issues with dissatisfied customers, webcare can also prevent a spiral of nWOM, and as such protect a company’s reputation from further damage (Hong & Lee, 2005; Van Noort & Willemsen, 2011). By engaging in webcare, companies show that they take responsibility for their actions, and care about their customers. As a result, customers may stop posting nWOM and even start spreading positive eWOM (Hong & Lee, 2005; Lee & Song, 2010).
Whether or not webcare is likely to restore customer satisfaction and trust, and prevent them from engaging in even more nWOM, may depend on consumers´ expectations: Some consumers expect a company to respond to nWOM, whereas others do not. When companies respond to nWOM when it is expected from them by the complainant, they can gain stabilisation of satisfaction and trust, and circulation of nWOM. However, when companies respond unsolicited, webcare can negatively affect trust, satisfaction, and eWOM behaviour (Lee & Song, 2010; Van Noort & Willemsen, 2011). Prior research shows that consumers often express such expectations in the content of nWOM by requesting or demanding a reaction from the company. If a company reacts to a specific request, comment or complaint of a customer, the response is also referred to as a reactive webcare strategy. If however a company’s reaction is an initiative response to nWOM without a prior made request by a customer, it is referred to as a proactive webcare strategy (Van Noort & Willemsen, 2011).
Whether or not webcare is likely to improve customer satisfaction and trust, and turn negative eWOM into positive eWOM, may depend on the company´s ability to not only meet but also exceed customers’ expectations. This thesis argues that this is contingent on not only the webcare strategy but also the webcare content. A company has several options of webcare content ranging from offering an apology, financial compensation or facilitation to a simple notice acknowledging the complaint (Davidow, 2003). By offering an accommodative webcare response that includes an apology or redress to the dissatisfied customer, a company shows its responsibility towards its customers and thereby its orientation towards solving their problems (Xie & Peng, 2009). In contrast, simply notifying the customer about the receipt of a specific request or awareness of a problem does not convey the impression of a solution-orientated customer care concept of a company. Therefore, webcare content might even cause more dissatisfaction in the customer engaging in nWOM as well as potentially expose others to the company’s attempt at webcare.
Thus far, only a limited number of studies have examined the effects of webcare strategy and webcare content, and yet only from a one-sided perspective. Namely of those who are exposed to nWOM and read about customers dissatisfying experiences (readers of nWOM) (Lee & Song, 2010, Kerkhof et al., 2012) and not from the perspectives of customers who express these dissatisfying experiences as nWOM (senders of nWOM). These studies show that consumer evaluations are highly influenced by not only the strategy a company chooses when engaging in webcare, but also by the chosen content. The aim of this thesis is to examine which type of webcare response may generate positive responses in senders of nWOM by testing the individual and combined effects of the chosen webcare strategy and content on customers’ satisfaction, trust and eWOM behaviour, identifying consumers’ expectations as a potential mediating mechanism. By doing so, this thesis responds to the call of Breitsohl, Khammash and Griffiths (2010), according to whom literature needs more approaches on the perspectives of all consumers addressed by webcare in order to get a complete understanding of the effects of webcare on a multiple audience context.
This will not only provide implications for theory with regard to webcare effectiveness, but also for the practical field. As can be seen, webcare is becoming an increasingly important tool for companies in order to cope with nWOM. Hereby an adequate response is essential for future customer relationships with complainants as well as other potential customers and an empirically-based guideline for a company’s webcare policy is needed.
Motivational Drivers of nWOM
As the Internet enables consumers more and more to voice their experiences with products and services on online platforms and social media sites, an increasing number of fellow consumers is exposed to such online reviews and has the opportunity to also share their consumption experiences. The result of such intense consumption-related dialogues is a wealth of eWOM that can range from very positive to very negative experiences (Willemsen, Neijens & Bronner, 2013). The literature shows that such articulations of eWOM have a strong effect on the consumers’ decision-making processes, especially when expressed as nWOM (Basuroy, Chatterjee, & Ravid, 2003; Sen & Lerman, 2007). According to the diagnosticity theory, consumers find negative information about a product or service to be more useful and informative than positive information. NWOM helps consumers to categorise and identify reliable reviews, since pWOM is commonly accessible for most products and services (Lee & Cranage, 2012).
Given the potential to damage companies’ sales and reputation, nWOM has therefore become a powerful tool for consumers to express their consumption opinions and experiences (Sundaram & Webster, 1999). The literature identified three main motives that may underlie consumers’ (online) complaint behaviour, namely venting negative feelings, concern for other consumers, and empowerment (Hennig-Thurau et al., 2004).
The need to vent a negative feeling caused by dissatisfying experiences is found to be one of the most common motivations for consumer complaint behaviour. By venting, consumers can regulate these negative feelings and reduce their stress related to the dissatisfying transaction (Hong & Lee, 2005).
A second important motive for nWOM identified by the literature is the concern for others (Sundaram, Mitra & Webster, 1998). This motive is closely related to the concept of altruism. Consumers driven by an altruistic motive primarily want to prevent potential consumers from the negative experiences they encountered themselves (Hennig-Thurau et al., 2004; Sundaram et al., 1998).
Empowerment represents an additional potential motive (Hennig-Thurau et al., 2004). Since consumers are becoming increasingly aware of the potential of nWOM to damage companies, online communications such as complaining are used as an instrument of power. Consumers publicly share their complaints online to draw attention to the company responsible for the dissatisfying experience. As such, consumers enforce not only a reaction by the company but also redress for the dissatisfying experience that caused them to engage in nWOM (Hennig-Thurau et al., 2004; Willemsen et al., 2013).
The Effects of Webcare Responses
Webcare aims to resolve any problem that dissatisfies a customer and thereby serves two main purposes: customer relationship and reputation management (Breitsohl et al., 2010; Lee & Song, 2010). By resolving a customers’ problem the company accused in nWOM tries to restore customer satisfaction and trust. The literature reports that both, customer satisfaction and trust are found to have an influence on repurchase intentions and eWOM behaviour (Anderson & Sullivan, 1993; Anderson, 1998). When a company not only restores but also improves trust and satisfaction of existing customers, it can prevent existing customers from switching to another brand (Davidow, 2003). As the recruitment of new customers incurs greater financial expenses than investing in current existing customers (Koufaris & Hampton-Sosa, 2004), webcare is thus seen as a key ingredient for a company’s economic situation and customer relationship management.
But not only does complaint handling play a major role in retaining existing customers, but also in limiting the potential damage that arises when potential customers read about the negative experiences that existing customers articulate on the internet as nWOM. When a company does not reply adequately to a complaint, a spiral of nWOM can occur and further affect potential customers. The latter type of consumers may also start posting nWOM and by that crucially damage a company’s reputation amongst a wide public (Lee & Song 2010; Van Noort & Willemsen, 2011). The literature has reported cases in which a company has been exposed to a wave of nWOM attacks and as a consequence massively suffered in terms of reputation and customer relationship (Lee, 2005). Hence, engaging in webcare is of crucial importance for companies’ complaint handling and reputation protection.