Getting personal: the effect of

(1)

Getting personal: the effect of

different managerial response types

and the level of personalization on

(2)

Table of content

• Introduction – Research question • Literature review – Hypotheses – Conceptual Model • Methodology – Survey – Manipulation – Operationalized • Results – Two-way ANOVA – Test of Simple Effects – Regression Analysis

• Discussion

(3)

INTRODUCTION

• Traditional complaint literature: focus on one-to-one communication

• Differs from the online environment

• Challenging to develop appropriate response strategies

(4)

INTRODUCTION

• Type of managerial response

• Each complaint should receive a response

• Credibility

• eWOM more credible compared to marketer generated information

• Authors fellow customers

• To what extent MR are perceived as credible

• Level of personalization

• Unclear what the effect is

(5)

Research question

What is the effect of different type of managerial responses and the level of personalization of these managerial responses on

(6)

Why relevant?

• Management not knowing to respond • Low levels of responses to OCRs

• Signal better service quality

(7)

Literature review

• Apology

• Accommodative response

• Organization takes responsibility • Avoid repeating same wrongful act

• Most essential response components organizations can use

(8)

Literature review

• Refutation

• Untrue or deyning responsibility for failure • Negative effort / lack of fairness

(9)

Literature review

• Compensation

• Positive influence on customers – perceived effort • Mostly based on offline service recovery literature • Online – transparant

• Readers of online review might apply different standards

• Full financial/material compensation hardly ever offered

(10)

Effect of MR on credibility

• Apology more effective than refutation • No difference apology or compensation

(11)

Level of personalization

• Standardized – Same response – Generic – No personal acknowledgment • Personalized

– Referring to receivers’ self

– Pay attention to personalized information – Paraphrase complaint

(12)

Covariates

• Other factors influences perceived credibility of MR • Skepticim towards organizations

H3) Consumers being skeptic towards organizations are less likely to perceive a

managerial response as credible

• Need for cognition

H4) Individuals with a high need for cognition will perceive a personalized

response as more credible compared to individuals with a low need for cognition

• Attribution of responsibility

H5) If attribution of responsibility if high, managerial responses containing an

(13)

(14)

METHODOLOGY

• Causal research – experiment

• Independent variables manipulated • 3x2 between-subjects design

• Randomization

Managerial response

Apology Refutation Compensation

Standardization Condition 1 Condition 3 Condition 5

(15)

Survey

• Questionnaire

• Negative online customer review equally shown • Different managerial response

• Questions measuring perceived credibility • 7-point-Likert-scale

(16)

Manipulation

• Type of managerial response

• Apology • Refutation

• Compensation

Apology Refutation Compensation P-value

Apology 4.65 3.43 4.31 .000

Refutation 2.24 4.21 2.71 .000

(17)

Manipulation

• Level of personalization

• Standardized

– Generic

– No explicit response to OCR

• Personalized

– Parahrasing complaint

Condition Mean SD P-value

(18)

Negative online customer review

• Equally shown among all conditions

’Last week, we had an overnight stay at Hotel Sea View.

Unfortunately, the beds did not meet our expectations. They are extremely uncomfortable, resulting in a bad night of sleep. These beds need to be renewed!’

(19)

Operationalized

• DV = Perceived credibility • Source credibility • Message credibility Overlapping constructs • Covariates

• Skepticism towards organizations

– High score = low level of skepticism

– High score = high need for cognition

• Attribution of responsibility

– High score = high attribution of responsibility

(20)

Sample

Gender Age Occupation

141 females Average = 31.27 97 Student

90 males Most frequent = 52 80 Fulltime

Total = 231 40 Parttime

(21)

Sample

Overall sample descriptive

Mean Frequency online hotel

booking

3.11

Frequency of use online review website

4.80

Familiarity TripAdvisor 5.11

(22)

RESULTS

two-way ANOVA

DV = Credibility

Type of managerial response

Condition Apology Refutation Compensation Total Standardized 4.03 (.913) 4.32 (.986) 4.51 (1.016) 4.28 (.981)

Personalized 4.72 (1.095) 4.33 (.1.008) 4.40 (1.073) 4.48 (1.063)

Total 4.38 (1.061) 4.32 (.991) 4.45 (1.040)

(23)

(24)

Test of Simple Effects

Managerial response

Apology Refutation Compensation Standardized 4.033 (.163) 4.342 (.159) 4.509 (.180)

Personalized 4.721 (.161) 4.509 (.180) 4.405 (.169)

P-value .003 .994 .673

Based on estimated marginal means

(25)

DV = Credibility

Model 1 2 3 4 5 Constant 4.293** 3.022** 4.135** 4.142** 2.757**

IVIa = type of managerial response

(Compensation)

.096 -.092 .088 .640** .530

IV1b = type of managerial response

(Apology)

-.101 -.118 -.105 .010 .050

IV2 = Level of personalization .016 -.048 -.681** .011 -.711*

IV1_a * IV2

Managerial Response (Compensation)* Level of personalization

-.048 .003 -.036 -.036 .021

IV1_b * IV2

Managerial Response (Apology)* Level of personalization

.226* .243** .208* .225* .235**

Control variable 1

Skepticism towards organizations

.312** .324**

Skepticism towards organizations* Managerial Response (Compensation)

.163 -.020

Skepticism towards organizations* Managerial Response (Apology)

-.028 -.122

Need for cognition

.381 .005

Need for cognition * Level of personalization .730** .690**

Attribution of responsibility

.038 .049

Attribution of responsibility * Managerial Response (Compensation)

-.575* -.470

Attribution of responsibility * Managerial Response (Compensation)

-.114 -.086

R2 .039 .143 .096 .061 .199

R2 adjusted .017 .112 .067 .032 .151

F-statistic 1.817 4.613 3.367 1.819 4,156

(26)

Multicollinearity

• Strong correlation between two or more predictors

(27)

Discussion results

H1) A managerial response with an apology or compensation will be

perceived as more credible compared to a managerial response with a refutation.

Test

• two-way ANOVA

Result

• Compensation and apology more credible

(28)

Discussion results

H2) The level of personalization will positively enhance the effect of all type of managerial responses on the perceived level of credibility.

Test

• Regression analysis

Result

• Effect of personalized apology significant (t = 1.919, p=.056) • Beta value (.226) = positive relationship

(29)

Discussion results

H3) Consumers being skeptic towards organizations are less likely to perceive a managerial response as credible

Test

Result

• Effect of skepticism on credibility significant(t = 3.141, p=.002) • Beta value (.312) = positive relationship

(30)

Discussion results

H4) Individuals with a high need for cognition will perceive the

personalized response as more credible compared to individuals with a low need for cognition.

Test

Result

• NFC influences effect of level of personalization on credibility ( t = 2.314, p = .022)

(31)

Discussion results

H5) If attribution of responsibility is high, managerial responses containing an apology or compensation are perceived as more credible compared to a refutation.

Test

Result

• High attribution of responsibility, decreases effect of compensation • Beta value (-.575) = negative relationship

(32)

DISCUSSION

• Effect of type of MR and level of

personalization on credibility not significant • Interaction effect was found to be significant • Personalized apology significantly more

credible compared to personalized refutation • Skepticism towards organizations

(33)

Theoretical implications

• Apology more effective compared to refuation • Did not account for level of personalization

• Apologetic response perceived as compensation

• Compensation perceived as confession

• Corresponds with characteristics of apology • Account for perceived differences between

(34)

Managerial implications

• Response strategy with an apology should be carefully considered

• Standardized apology is perceived as less credible • Extent to which service provider is kept

responsible

• If they are the one to blame – no compensation • Apology perceived as compensation

(35)

Future research

• Different levels of personalization • Using less well-known platforms

• Perceived negativity of online customer review

• Different type of apologies