Joining the Discussion

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Joining the Discussion

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Management Summary

This research investigates whether or not it makes sense for companies to engage in online discussion about said company or its products. The benefits for a company should be that company community participation leads to higher repurchase and recommend probability – together forming true loyalty (Baldinger and Rubinson, 1996). Research shows that this true

loyalty has numerous advantages, such as lower acquisition costs, higher customer lifetime

values and increased employee happiness (Reichfeld, Markey and Hopton, 2000). The main question, whether or not company community participation leads to higher probability of repurchase and recommending, is believed to be positively affected by the good being an experience rather than a search good, but also by the participation taking place on an independent board rather than a company-‐owned dependent board, and by the height of involvement – higher involved customers being more likely to show increased probability of recommending and repurchasing than lower involved customers. This lead to the following research question:

Does the participation of a company in online discussion have a positive influence on repurchase and recommending probability (together constituting true loyalty), and to what extent do discussion board type, product involvement and type of good affect this influence?

To find out whether or not this influence is present, a questionnaire was posted online, asking respondents how likely they were to purchase or recommend a good they just read an online complaint about, and whether or not their opinion had changed upon seeing a reply. A total of eight scenarios, each featuring different combinations of product, board type and whether the reply was posted by the company or by a normal community member, were presented to the respondents. The data derived from this questionnaire suggests that there is indeed a significant difference in recommending and repurchase probability when questions about a product are answered by the company rather than a normal community member. This suggests company community participation has a beneficial effect on repurchase and recommending, together constituting higher overall loyalty.

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other way around: scenarios in which the good was an experience good showed lower probabilities of recommending or repurchasing.

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Preface

The thesis you are reading right now might be one of many such theses, but for me, it is the final product of my master course, and thus of my college life. Six and a half years ago, when standing in front of the Academiegebouw in Groningen, waiting for my first lecture for the

Communication-‐ and Information-‐sciences bachelor, I did not yet fully understand my own passion and interests. After quitting the bachelors’ program and enlisting for Management, Business Administration and Law at the HanzeHogeschool Groningen, and starting a small business in the online marketing field, I understood that if I ever wanted to obtain a masters degree, it should be in the marketing field.

To my surprise, an excellent pre-‐master year was offered at the RijksUniversiteit, allowing me to pursue said masters degree. It proved to be the right choice. While I was more suited to some courses than to others, the overall feeling I have now is that I made the right choice. This thesis, to me, is the end product of finding the field I want to work in – a research that combines both my marketing studies and my love for online marketing. It has been a long journey, but ultimately a rewarding one.

I wish to take this opportunity to thank some of the people that have been of great help to finishing this thesis. First my supervisor Mariëlle Non. Her feedback proved invaluable in

determining the flaws, but also the opportunities, in my research. I also wish to thank the family, friends and the former classmates (projectgroep 1) closest to me, as they provided support, feedback, but also diversion when needed.

And thank you for taking the time to read this thesis.

Groningen, December 2011

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2.1.1 Antecedents of true loyalty according to Amine (1998) 13 2.1.2 Antecedents of true loyalty according to Johnson, Herrman & Huber (2006) 13 2.1.3 Phases of true loyalty according to Oliver (1999) 14 2.1.4 Advantages of brand loyalty 14 2.2 Internet and consumer behaviour 15 2.2.1 Online communication 16 2.2.2 Influencing consumer behaviour via consumer reviews 17 2.3 Online word of mouth 19 2.3.1 Motives for word of mouth behaviour 20 2.3.2 Negative word of mouth 20

2.3.3 Manipulation 21

2.4 Types of discussion boards 23 2.4.1 Definition of a community 23 2.4.2 Types of online communities 24 2.4.3 Reasons to engage in online discussion 24 2.4.4 Importance of discussion boards 25 2.5 Search, experience and credence goods 27

2.6 Customer involvement 29

3 Hypotheses and conceptual model 31

4 Methodology / research design 33 4.1 Research design and data collection 33

4.2 Questionnaire design 34

4.2.1 Measuring the attributes of the products 34

4.2.2 Scenarios 35

4.2.3 Demographic questions 37

4.3 Resulting data 37

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4.4.1 Product attributes 38

4.4.2 Hypotheses testing 39

5 Results 41

5.1 Search or experience 42

5.2 Involvement 42

5.3 Resulting good-‐type and involvement variables 43

5.4 Basic analysis 43

5.5 Running the regression analysis 43

5.6 Hypotheses testing 44

6 Conclusion and recommendations 46

7 Limitations and further research 51

References 53

Appendices 58

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1 Introduction

Stating that ‘Internet’ has become an important source of information for consumers has become somewhat of a cliché: the importance of having an online presence as a company has been subject of extensive research. However, the forever-‐growing freedom the web offers in terms of enabling consumers to publish information themselves, regardless of the official channels offered by companies, poses new challenges and questions for these companies to deal with.

Having grown from an academic network to the World Wide Web we know today, the possibilities offered by the web were quickly recognized by marketers, who adopted this network by generating marketing-‐controlled information sources that are pushed to the consumer – such as corporate, company-‐owned support channels and Q&A/support pages. However, there are also various non-‐marketer-‐dominated information sources, a clear example being online discussion boards and complaint sites. These websites are often controlled by consumers – so discussion about a brand or product can not be moderated by the brand itself. Marketers, however, do have the possibility to partake and participate in and contribute to online discussion in the same way consumers have this access – in effect levelling the playing field. These interactions between marketers and consumers are public, and as such can be seen by everyone reading the website. This adds an extra layer of complexity: whereas service recovery operations used to be private, as they were conducted via phone, mail or e-‐mail, now they are public. As such the potential reach of successful or unsuccessful recovery can be seen and interpreted by anyone, potentially increasing the importance of individual cases.

Even though the level of control is low, several companies have put special teams in place that are tasked to engage in these discussions – in effect providing customer service on public discussion boards. Examples of these are Telfort and Vodafone, both telecom and internet providers. Both companies have a special webcare team that answers questions and engages in discussions on online discussion boards. Often, these webcare teams are active on both the companies’ own discussion board, independent boards, and other digital communication methods such as Twitter and Facebook.

Webcare is used as a term to define interactions aimed at service recovery after service failure,

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However, this emergence of special departments focusing on online consumer complaints poses a number of questions, an important one being whether or not it actually benefits a company in the long term. Engaging in online discussion with a webcare team can be a costly operation, and as such a company will want to be sure these are not wasted efforts. A company’s participation in discussion might be perceived as positive and pro-‐active if a company goes out of its way to help a consumer when he or she has a problem – making consumers feel that the company is taking them seriously. On the other hand, however, consumers might dislike the company’s participation, for example because they feel like the company is trying to bend the truth or invade their personal space. In order to be able to measure the effect of this participation on long-‐term company success, ‘Loyalty’ is used. The benefits of customer loyalty on long-‐term company results have been investigated extensively, for example by Reichfeld, Markey and Hopton (2000), who state that consumer loyalty leads to revenue and marketshare growth, lower acquisition costs and higher employee retention. Amine (1998) states that brand commitment leads to positive word of mouth, which in turn leads to a higher number of loyal customers. Also, Rust, Lemon and Zeithaml (2004) show that improved customer loyalty leads to higher customer lifetime value, thus increasing return on marketing.

Loyalty is the biased behavioural response expressed over time by some decision-‐making unit, with

respect to one or more alternative brands out of a set of such brands, and is a function of psychological processes.

(Jacoby and Kyner, 1973).

The effect of online discussion participation on consumer loyalty will most likely depend on the type of product and the board the discussion is posted on. In this research, three moderators are used to be able to describe the scenarios that benefit more from the efforts of a company:

1. The type of discussion board. A distinction is made between independent boards, and dependent (marketer-‐controlled) boards. It is expected that the discussion taking place on an independent board positively influences the effect of company community

participation, due to the fact dependent boards are marketer controlled and moderated, and as such potentially perceived to be less trustworthy.

2. The level of product involvement. “Product involvement reflects recognition that a

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that consumers appreciate company community participation more when the product is relevant and important to the consumer.

3. Type of good. A distinction is made between search and experience goods. It is expected that products and goods that are difficult to assess before using or enjoying them, such as holidays, are more likely to benefit from company community participation than products that are easy to assess beforehand (such as computer parts).

These questions leads to the following research question:

Does the participation of a company in online discussion have a positive influence on repurchase and recommending probability (together constituting true loyalty), and to what extent do discussion board type, product involvement and type of good affect this influence?

The goal of this research is to find whether or not a company can benefit from putting effort in webcare teams, and whether or not the type of product and board affect this effect. The

research will lead to managerial implications in which this is discussed. The contribution of this research to academic literature lies in the exploration of the actual payoff of a relatively new and unexplored field of customer service. Also, through the three variables added (board type, product involvement and type of good) a better understanding is gained of the specific

situations in which company community participation benefits customer loyalty.

In order to be able to answer the research question, this thesis has been structured as follows: First, a theoretical framework will be established in which the existing research about the dependent and independent variable and its moderators will be discussed. In this framework, first Loyalty will be discussed. What is loyalty, what are its antecedents and what constitutes ‘true loyalty’? After that, online consumer behaviour and word of mouth will be discussed, followed by research about type of boards. Also, the different types of goods and levels of consumer involvement will be discussed.

Following the theoretical framework, the hypotheses and resulting conceptual model will be discussed in the third chapter. The research design used to prove or discard the hypotheses is outlined in the fourth chapter, followed by analysis and results in the fifth, conclusions and recommendations in the sixth, and discussion in the seventh chapter.

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2 Theoretical framework

The effect on consumer behaviour of a companies’ participation in discussion on online

discussion boards has not yet been investigated extensively. The notion that not only company-‐ owned discussion boards but also independent discussion boards can affect consumer

behaviour seems to be relatively new. Therefore, to be able to investigate the effect of

companies’ efforts to engage and participate in online discussion a theoretical understanding of the variables involved is required. As this research attempts to answer whether or not company community participation affects consumer loyalty, first the concept, importance, definition and antecedents of consumer loyalty will be discussed.

The fact that the information exchange is now online and public poses challenges for companies and consumers alike, changing the way they deal with information. The effect of internet on consumer behaviour and information is discussed in the second section, and the resulting word of mouth in the third. This way, an understanding of how the interconnectedness of consumers has changed the way they behave and communicate can be established. Also, the motives behind positive and negative word of mouth will be discussed.

In the fourth section, the different types of boards will be outlined. In the introduction the difference between marketer-‐controlled and independent boards has been highlighted – a concept that will be discussed in further detail. The same is true for the different types of goods (section five), and levels of customer involvement (section six). Using this structure

corresponds with the research question.

2.1 Consumer Loyalty

Loyalty, or rather brand loyalty, is a well-‐researched concept, and can be described as “the

biased behavioural response expressed over time by some decision-‐making unit, with respect to one or more alternative brands out of a set of such brands, and is a function of psychological processes” (Jacoby and Kyner, 1973). So, a consumer is loyal if he or she decides to buy the same

brand time and time again (the biased behavioural response), even when there are other brands that provide a comparable good or service. This definition already shows that there is a

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This is investigated in further detail by Odin, Odin and Valette (2001). In their research Odin et al point out that there is a difference between loyalty and inertia, which is determined by whether or not there is high brand sensitivity.

The notion that a consumer who always buys brand x is not necessarily loyal to the brand shows that loyalty is not a simple and unambiguous concept, but rather that a difference should be made between different types of loyalty – which is done in more recent literature by making a distinction between attitudinal loyalty and behavioural loyalty. Attitudinal loyalty is about feelings toward a brand, in which a long term involvement of consumers with a brand is the main goal. Dick & Basu (1994) created a framework for attitudinal loyalty, in which they describe three main types of antecedents:

-‐ Cognitive antecedents, being accessibility, confidence, centrality and clarity; -‐ Affective antecedents, being emotion, mood, primary affect and satisfaction; -‐ Conative antecedents, being switching costs, sunk cost and expectation.

These antecedents lead to a relative attitude towards a brand, which is influenced by situational influences and social norms, and either do or do not lead to repeat purchases.

Behavioural loyalty, however, is about market share, repeat buying and share of wallet. Where attitudinal loyalty might mean that the consumer has positive feelings toward a brand, but buys another brand, behavioural loyalty might mean that the consumer does not perceive the brand he or she repeatedly buys as better (Baldinger and Rubinson, 1996). This implies that while a consumer with high behavioural loyalty repeatedly purchases a specific brand, they can just as easily switch brands.

Baldinger and Rubinson (1996) show this difference in the matrix in figure 1. According to the model, a real loyal is a consumer who not only repeat-‐purchases a specific brand, but also does so consciously and biased, because the

customers’ perception of the brand is more favourable than his/her perception of other brands. According to their research, many consumers who are loyal in one of two ways, ultimately still switch brands, whereas real loyals show high stability and as such are more loyal.

The antecedents behind this ‘true loyalty’ as a combination of attitudinal and behavioural loyalty have been researched by Kim, Morris and Swait (2008). According to their research,

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brand credibility leads to cognitive and affective conviction, which in turn lead to attitude strength and brand commitment. This brand commitment is the behavioural intent to be loyal, and as such seen as leading up to brand loyalty, but where behavioural intent is not the same as true loyalty, Kim et al did find that brand commitment has a close relationship to genuine loyalty. There are, however, differing views on the antecedents of true loyalty, which will be highlighted in the following paragraphs.

2.1.1 Antecedents of true loyalty according to Amine (1998)

An earlier model by Amine (1998) describes antecedents of true loyalty much in the same way as Kim, Morris and Swait (2008). According to Amine, brand commitment is relevant to loyalty, which corresponds with the Kim et al (2008) model, and as such brand commitment “should be

viewed as a long-‐run end pursued to achieve long-‐run competitive advantage” (Amine, 1998).

Again, repeat-‐purchases should not be the goal but rather a deep, biased brand commitment. In the model, Amine states that communicative efforts should be turned into cognitive or affective sources of brand commitment. More specifically:

1. High involvement and satisfaction leads to perceived differences among the brands (limiting the perceived switching possibility), perceived risk of switching (in turn influenced by perceived differences), brand sensitivity, and brand liking or attachment. 2. These lead to calculative commitment (perceived differences, risk and brand

sensitivity), and/or affective commitment (brand sensitivity and liking/attachment). 3. Both types of commitment lead to consistent purchasing behaviour, which, because of

the commitment being both calculative and affective, can be seen as true loyalty. 4. This consistent purchasing behaviour, in turn, leads to positive word of mouth

communication and consumers’ confidence in the brand.

2.1.2 Antecedents of true loyalty according to Johnson, Herrman &

Huber (2006)

A somewhat different view on the intentions of loyalty is given by Johnson, Herrman and Huber (2006), who identify three drivers of customer loyalty:

1. Perceived value: at the beginning of the consumer/company relationship, the consumer makes a choice based on the customer’s perception of what he/she will pay, and what he/she will get in return. This can be seen as calculative commitment, which is

described by Amine (1998);

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3. Brand equity: knowledge of a brand influences the response of the consumer to subsequent marketing of that brand. As such, brand equity is a goal that, if achieved, strengthens the positive effect of companies’ marketing efforts.

2.1.3 Phases of true loyalty according to Oliver (1999)

True loyalty is not a goal achieved easily. According to Oliver (1999), loyalty can be described as “a deeply held commitment to rebuy or repatronize a preferred product/service consistently in the

future, thereby causing repetitive same-‐brand or same brand-‐set purchasing, despite situational influences and marketing efforts having the potential to cause switching behaviour”. Again, in this

definition, a difference is made between simply repurchasing a certain brand or brand-‐set, and actually making a cognitive decision to repurchase, even while other brands are contemplated. In order to achieve this true loyalty, Oliver (1999) described a four-‐phase process:

1. Cognitive loyalty: a consumer makes an informed decision to buy a brand because of information available. In this phase, loyalty is very shallow and consumers can easily be convinced to choose another brand;

2. Affective loyalty: a consumer develops a liking towards the brand, based on satisfactory earlier purchases;

3. Conative loyalty: a consumer develops the intention to rebuy a certain brand, but can still buy another brand if competitors provide persuasive counter-‐argumentative competitive messages;

Until now, the three above phases are very similar to the main types of antecedents for attitude loyalty described by Dick and Basu (1994). However, as described by Kim Morris and Swait (2008) and others, attitude loyalty is not the same as true loyalty: the behavioural component is missing. Therefore, Oliver (1999) added a fourth phase:

4. Action loyalty: a consumer not only intents to repurchase a certain brand, but also develops a certain inertia towards the buying behaviour, and as such does not contemplate other brands. This phase is true loyalty.

2.1.4 Advantages of brand loyalty

The advantages of brand loyalty versus the disadvantages of a satisfaction-‐based system are described by Reichfeld, Markey and Hopton (2000). Using satisfaction scores as key

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said they were satisfied or very satisfied prior to their defection. Instead of focusing on satisfaction scores, a company should focus on it’s value creation process, and this process heavily depends on loyalty – not only because loyalty indicates true customer satisfaction, but also because it leads to a number of secondary advantages:

-‐ Revenue and market share grow: repeat sales and referrals (positive word of mouth as a result of brand commitment, as shown by Amine (1998));

-‐ The company can lower acquisition costs as the positive word of mouth already prime consumers and create positive brand equity;

-‐ Less defectors means less acquisition costs have to be made to keep the same level of clients;

-‐ Employee retention increases, as job satisfaction and pride increase – which in turn helps the company keep a good relationship with the consumer.

This focus on customer lifetime value, and thus loyalty, is also described by Rust, Lemon and Zeithaml (2004). They state that a marketing investment leads to improved customer perceptions, in turn to increased customer retention (loyalty) and attraction, which together lead to a higher customer lifetime value, thus increasing return on marketing. Their CLV model also takes into account competitors’ offerings and brand switching, which are vulnerabilities to loyalty that become less of a vulnerability when the loyalty reaches the action loyalty stage (Oliver, 1999).

2.2 Internet and consumer behaviour

In 1989, Tim Berners Lee founded the Internet as we know it (Borden, 2000) – a network of computers between which information can be transmitted and received. Since then, the possibilities of this network have expanded vastly, both in terms of amount of computers connected as in terms of the type of tasks this network allows its users to accomplish. For example, Amazon, the first real online store, launched and sold its first book six years after the initial launch of the internet – while online shopping nowadays is more common than ever.

The result of this interconnectedness, and the resulting virtually unlimited availability of

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using computers and internet) but also on a strategic level, where the value proposition of a company itself is refined and adapted to the possibilities of an infinite availability of

information.

Besides the implications for businesses, there are also implications for consumers. They now have access to information previously unknown, and as such potentially possess more knowledge about products and companies. This, in turn, leads to more bargaining power – where information previously was distributed by a third person (such as an insurance

intermediary), it is now often accessible and assessable by consumers themselves. The power held by intermediaries such as shop owners often comes from controlling information that is unavailable elsewhere and is eroded by the declining monopolization of this information – lowering consumers’ switching costs and affecting traditional ways of increasing customer loyalty (Evans and Wurster, 1997).

2.2.1 Online communication

When the internet first became available for non-‐academic and military purposes, marketers quickly realised they could use it to send content to a website, which would then serve as static text to as many consumers as possible – one-‐to-‐many communication that was pulled by the consumer (Pitta and Fowler, 2005). This type of communication is still used, as static websites are still part of a company’s communication strategy. However, the creation of more dynamic online environments has allowed for other types of communication. Private conversations via Instant Messaging, for example, allows for one-‐to-‐one consumer-‐to-‐consumer communication, while discussion boards allow for computer-‐mediated many-‐to-‐many interaction (Pitta and Fowler, 2005). This spurred marketers to adopt a more community-‐like view of the market: whereas consumers used to only be able to listen, they are now able to engage in visible communication with other consumers or even the marketer.

This commercial communication between consumers and businesses is inevitable, and have vital benefits for both parties involved, leading to “enhanced value, higher product/service

quality, and greater satisfaction with their purchases” (Martin, 1996). Because of the importance

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Communicating online in a way that appeals to the target group is often difficult for companies. Whereas formal communication can be written in a formal way, the social distance in online discussions is often lower. As the communication basically is face-‐to-‐face (despite often being anonymous) another way of communicating is required. Research by Goodwin and Frame (1989) shows that while consumers dislike using first names only, resulting in a perceived lower service quality, the extent to which communication should be formal even in face-‐to-‐face service encounters depends on the type of service, and more specifically the perceived risk (Butcher, Sparks and O’Callaghan, 2002). When the style of communicating appeals to the target group, consumers experience social comfort, which, however, is heavily affected by whether or not the service provider manages to accomplish the task, and whether or not there is a lot of non-‐task commentary. Moreover, consumers perceive the attempts of a company that is trying to engage in a deeper relationship with the customer as obtrusive – having the opposite effect of what the company envisioned. This view contradicts with the growing popularity of the “hire for

personality, train for skill”-‐movement, as this shows that delivering the service in a non-‐

obtrusive way is more important than trying to be a customers’ friend (Butcher, Sparks and O’Callaghan, 2002).

The Internet allows for communication between consumers, and between consumers and marketers/companies. As such, the effect of communication on consumer actions is an

interesting and important field of research. An example is the research by Dolinski, Nawrar and Rudak (2001), which shows that dialogue preceding a question increases the chance of a consumer complying with what is asked. The primary reason of even a short dialogue having this effect on a consumer is that the dialogue evokes a feeling of being acquainted to the person asking the question, thus lowering intent to refuse.

2.2.2 Influencing consumer behaviour via consumer reviews

There are a number of online information sources that can influence consumer behaviour. For example, product evaluations by consumers can be an important source of consumer advice. As was already stated in 1975 by Burnkrant and Cousineau, positive evaluations of a product positively affect consumer opinion. This effect was investigated in more depth more recently by, amongst others, Senecal and Nantel (2004). Their research shows that the conclusions of Burnkrant and Cousineau (1975) still hold true: consumer reviews have a measurable impact on consumer behaviour in terms of purchase intention. However, a non-‐human

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engine is perceived to be less trustworthy and have less expertise. This is not affected by whether the location of the recommendation is a third-‐party website or an online retailer.

The importance of recommendations, however, has a potential caveat: because the source is anonymous or unfamiliar (as opposed to advice from friends, for example), they are easily manipulated by a company. Because it is not uncommon for consumers to offer unsolicited recommendations, it is easy for marketers to disguise promotional chat as genuine consumer-‐ to-‐consumer advice (Mayzlin, 2006). However, marketers face three drawbacks when trying to manipulate or engage in discussions:

• First of all, automated promotion is virtually impossible because the message of the marketer has to fit the style of the discussion board it’s placed on, and as such engaging in discussion can be very labour-‐intensive.

• Second, many boards have data about their participants that allows for determining whether or not the member is ‘real’, such as the date on which the member registered, the number of posts he or she has made, and ratings of his credibility by other members. • Third, when a recommendation strongly contradicts the opinion of a reader, such as in

unsolicited advice promoting what a consumer believes is a bad product, consumers may react very negative to this advice (Fitzsimons and Lehman, 2004), making manipulating a complaint thread a difficult task.

Even though manipulating and engaging in discussion can be difficult, there is still an important advantage to monitoring discussion boards. As the information is public, a company can find a lot of information about how their products and brand are perceived by their customers.

Another difficulty in influencing consumers is that while the internet allows for borderless, anonymous relationships based on information exchange, consumers are still impelled to form small subgroups in which they limit their communication most of the time, thus making mass-‐ communication, but also one-‐to-‐one marketing, difficult (Bagozzi and Dholakia, 2002). As these subgroups are often homogeneous in aspects relevant to marketers, group-‐level marketing is still viable in the online world.

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by other consumers – making reviews of other consumers more important. The same is true for gender, as investigated by McMahan, Hovland and McMillan (2009), stating that the role of emotion in online shopping is higher for women than it is for men. Women rely more on their cognitive efforts. However, even though there are differences in term of usage and time spent on different parts of a website, there is no real difference in total time spent. Also, the sometimes seen prejudice that women use less advanced methods of gathering information is not true (Weiser, 2000). As online buying by women is growing faster then by men McMahan, Hovland and McMillan (2009), it is important for online retailers to appreciate and cater to the

differences in consumer behaviour by gender.

2.3 Online word of mouth

Word of mouth and its motives has been a popular research subject in marketing research. This is not surprising, as section 1 shows that word of mouth can be seen as one of two components of true loyalty: not only repurchase (which might be inertia) but the repurchase being well-‐ contemplated and motivated is what constitutes true loyaly. As Reichfeld (1996) states, loyalty is most affected by the willingness of a consumer to recommend a brand or company, thus making word of mouth very important to true loyalty. In order to be able to link this concept to online discussion, this section describes word of mouth, its motives, motives behind negative word of mouth and the benefits and drawbacks of engaging in manipulative behaviour.

Service quality, also post-‐purchase, is of importance when it comes to word of mouth – and word of mouth is one of the more important influencers of consumer purchasing, a statement that has been confirmed by many researchers alike. An early example is the research by Katz and Lazarsfeld (1955) who demonstrated that word of mouth is the most important source of information when buying new household items. An added effect is that word of mouth

promotion increases the chance of a consumer to make riskier purchases, for example buy a newly introduced product. To achieve this, the consumer first should be made aware of benefits in using the new product, and should be able to counter the perceived risk with

recommendations of friends and family members (Woodside and Delozier, 1976).

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always known by the marketer himself, in online discussions the results are visible and measurable (Pitta and Fowler, 2005): the consumer to consumer conversation has become public. This means there is a two-‐fold possible influence of participation on word of mouth: first, the consumer posting a complaint is helped, which might lead to better word of mouth by this specific consumer. Second, the discussion itself being public might also spur positive word of mouth from other readers: the service recovery has become a marketing tool.

2.3.1 Motives for word of mouth behaviour

Consumers have diverse motives for participating in word-‐of-‐mouth behaviour. In general, it can be said that WOM happens when a consumer is surprised either negatively or positively by the way a company fullfills customer expectations (Henning-‐Thurau, Gwinner, Walsh and Gremler, 2002). Multiple researchers have performed studies in which these motives were found, for example Dichter (1966), who states there are four possible motives, being product involvement, self-‐involvement, other-‐involvement (concern for other people) and message-‐ involvement (to what extent a person is intrigued by the companies’ message). However, a more recent and comprehensive study by Sundaram, Mitra and Webster (1998) shows that there is a difference between motives based on whether the WOM is positive or negative. Motives for positive word of mouth include altruism (making sure other people can have the same good experience), product involvement (how involved a consumer is in purchasing and using a certain product), self-‐enhancement and helping the company that provided a great good or service. Negative word of mouth, however has different motives. Altruism is still important but in this case, consumers want to prevent the same bad service or good being purchased by other consumers. Anxiety reduction is another motivator: complaining helps to soften the mood. Vengeance is a third motivator, and advice seeking the fourth. This last motivator is one that might be interesting for a company who wishes to engage in service recovery, as this means that, while dissatisfied and telling people accordingly, the consumer is still waiting for a solution and hopes to obtain one using negative WOM.

2.3.2 Negative word of mouth

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beneficial option. However, in a research by Nyer (2000), he concludes that when consumers are involved in finding a solution to the service failure, and asked to describe their complaint, their satisfaction might even be higher than the satisfaction of customers who were already satisfied in the first place. This shows that allowing for consumers to vent their complaints is beneficial to both the company and the consumer.

The link between customer service and complaining behaviour has also been investigated by Blodgett, Wakefield and Barnes (1995). One of the conclusions of this research is that

consumers are more likely to partake in complaining behaviour if the perceived chance of a beneficial outcome increases. Employees that are helpful and friendly will make the consumer feel that the retailer is likely to solve any problems, if they might arise. When a consumer feels the chance of problem solving is smaller, he or she will more likely take a negative stance and his or hers word of mouth will be more negative. A consumer who is dissatisfied should therefore be approached as soon as possible by a company, making him or her feel like the problem will be solved, which in turn will prevent negative word of mouth.

The same research shows that the product importance is of no effect in determining the extent to which the consumer will seek redress or will have a negative stance beforehand. The

importance of approaching dissatisfied consumers and showing that the company is capable and willing to solve the problems is just as important for low-‐involvement products such as fast food, as it is for larger expenses such as cars. Blodgett et al (1995) also found that while

monetary compensation is important (where a partial refund might work just as well as a full refund), the feeling of being done justice is even more important. Being shown respect is an important goal of consumers who face a problem: acknowledgment is an important result to consumers. Lack of justice, the study shows, also contributes in a large way to post-‐redress negative word of mouth.

2.3.3 Manipulation

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researchers, including Dellarocas (2006). In this research it is noted that a manipulation strategy has a negative effect on the information value for consumers, if the real product is low of quality: as the real world quality experience differs from the promised experience, the consumer will be less inclined to believe the information about that product or brand in the future. The same is true the other way around: if an experience is positive, positive information will lead to higher perceived information value. However, as the positive experience itself should lead to real, non-‐manipulated word of mouth from consumers, it’s less necessary to manipulate. Therefore, as manipulation would be disadvantageous in case of service failure, and unnecessary in case of positive experience, it would be best not to manipulate information at all. However, this is without taking into account the possibility that a competitor starts

manipulating, which might mean the company is better off engaging in manipulating behaviour anyway – in order not to be perceived as the lesser company (Dellarocas, 2006).

The research in sections 2.1, 2.2 and 2.3 show that loyalty is, or should be, an important concept for companies. Their long-‐term success is dependent on their ability to create loyal customers (Reichfeld, 1996). Service recovery can limit the strength of negative word of mouth (Blodgett, Wakefield and Barnes, 1995), or even create positive word of mouth (Nyer, 2000), in case of service failure. Therefore, it is expected that there is a positive link between a company’s participation in online discussion, and word of mouth. Therefore, when there is a negative online discussion about a company, it is expected that the resulting negative word of mouth will be lower or even absent when a company itself chimes in and participates in the discussion in order to solve the problem(s) of the customer.

As word of mouth has been shown to affect repurchase behaviour (Reichfeld, Markey and Hopton, 2000), and true loyalty consists of attitudinal loyalty (positive word of mouth) as well as behavioural loyalty (repurchase behaviour) (Baldinger and Rubinson, 1996), the same positive link is expected to exist between a company participating in online discussion and repurchase behaviour. This leads to the following hypotheses:

H1: Company community participation leads to more positive word of mouth. H2: Company community participation leads to more repurchase behaviour.

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2.4 Types of discussion boards

Ever since computers became interconnected, they have been used as means of communication. From the earliest days of Plato, Bulletin Board Systems and Internet Relay Chat until the now-‐ popular social media such as FaceBook, Twitter and LinkedIn, there has always been a social aspect to life on the net. Even in 2001, 84% of Internet users already participated in online groups (Horrigan and Rainie, 2001). However, there are differences between company-‐

controlled and independent boards, and as stated in the introduction and research question, it is likely that the differences between these types have at least some effect on the question of whether or not company community participation affects loyalty. Therefore, an understanding of online discussion is required. This section investigates the definition of a community, what types of communities there are, the reasons consumers have to engage in online discussion, and the importance of discussion boards.

2.4.1 Definition of a community

The high participation in online groups spurred ubiquitous research and discussion about what defines an online (or virtual) community, and what differences there are to a ‘real life’-‐

community. Fisher, Bristor and Gainer (1996) describe the widely varied assumptions of scholars about what the core elements of a community are, especially considering what the nature of the bond between members of a community is.

Whereas in some cases geography is considered a starting point for defining a community, social relationships – personal knowledge about other community members – are another possible starting point (Pitta and Fowler, 2005). Both starting points imply strong ties between community members, but there is also a third approach: the bond between members forming a community can also be “an experience, idea or thing people have in common” (Fisher et al, 1996). The difference between real-‐life and virtual communities is that the latter is often based around a common consumption of a good or service, is self-‐selective, voluntary of nature (whereas real communities are often defined by aspects beyond control, such as birthplace and family), and easy to enter or exit (Fisher et al, 1996). The way online communities form is different from the offline-‐process. In the real world people meet, connect and form relationships. Online, people connect, form relationships, and maybe meet (Rheingold, 1993). Whereas real-‐world

Joining the Discussion