Journal of Nonprofit & Public Sector Marketing ...

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Dissecting Word-of-Mouth's Effectiveness and How to Use It as a Proconsumer Tool a

Bodo Lang & Rob Lawson

b

a

The University of Auckland Business School, The University of Auckland , Auckland , New Zealand b

Department of Marketing , School of Business, University of Otago , Dunedin , New Zealand Published online: 18 Nov 2013.

To cite this article: Bodo Lang & Rob Lawson (2013) Dissecting Word-of-Mouth's Effectiveness and How to Use It as a Proconsumer Tool, Journal of Nonprofit & Public Sector Marketing, 25:4, 374-399, DOI: 10.1080/10495142.2013.845419 To link to this article: http://dx.doi.org/10.1080/10495142.2013.845419

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Journal of Nonprofit & Public Sector Marketing, 25:374–399, 2013 Copyright © Taylor & Francis Group, LLC ISSN: 1049-5142 print/1540-6997 online DOI: 10.1080/10495142.2013.845419

Dissecting Word-of-Mouth’s Effectiveness and How to Use It as a Proconsumer Tool

Downloaded by [University of Auckland Library] at 18:07 19 November 2013

BODO LANG The University of Auckland Business School, The University of Auckland, Auckland, New Zealand

ROB LAWSON Department of Marketing, School of Business, University of Otago, Dunedin, New Zealand

Companies are increasingly relying on alternative promotional activities, such as word-of-mouth communication (WOM), to reach their target markets. From a consumer protection perspective this may be troubling, as consumers may not always be aware of what is commercially motivated WOM and what is not. Based on a synthesis of the literature, this article develops the first practitioner-friendly model, which explains WOM’s effectiveness as an information source for consumers and why it is a powerful tool for nonprofit organizations and government agencies. Then nine recommendations are developed to help nonprofit organizations and government agencies use WOM more effectively as a proconsumer tool. This is the first article to conceptualize proconsumer WOM rather than naturally occurring WOM or commercial WOM and to specifically focus on WOM to protect and educate consumers. The study paves the way to an untapped research area; that of proconsumer WOM by nonprofit organizations and government agencies. KEYWORDS word-of-mouth communication, consumer protection, nonprofit, government, public sector

Address correspondence to Bodo Lang, PhD, The University of Auckland Business School, The University of Auckland, Owen G. Glenn Building, 12 Grafton Rd., Auckland, New Zealand. E-mail: [email protected] 374

Dissecting WOM and Using It as a Proconsumer Tool

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WORD-OF-MOUTH: A TOOL TO “CON” CONSUMERS? Commercial marketers are decreasing their reliance on traditional advertising (McQuivey & Narbey, 2008) and are turning increasingly towards alternative channels, such as word-of-mouth communication (WOM; Leskovec, Adamic, & Huberman, 2007; Trusov, Bucklin, & Pauwels, 2009). WOM occurs between a non-commercial (e.g., not financially rewarded) communicator and a receiver concerning a brand, a product, or a service offered for sale. WOM can be transmitted through a variety of digital and nondigital channels, but according to one study, 76% of WOM is transmitted face-to-face (Keller, 2007). Together, face-to-face and other offline mechanisms for spreading WOM are said to account for up to 91% of all WOM (Fay, 2011). WOM, of course, is nothing new. Consumers have used WOM to inform one another about which products and services to buy and which ones to avoid for many years (Nyilasy, 2006). What is new, however, is the increasing proliferation of commercially incentivized WOM campaigns where the sender is rewarded for engaging in WOM (Adweek, 2008; Charles, 2008). For example, in the United States alone, around 2 million bloggers are paid for their efforts (Blodget, 2009). Furthermore, agents from one WOM agency alone reached 40 million consumers (Chernov, 2008), and through technology reaching consumers across borders and languages with one “WOM campaign” is becoming easier (Thunström, Chernov, & Oetting, 2009). There are, of course, legal and ethical issues surrounding covert marketing activities such as commercial WOM (Martin & Smith, 2008; Petty & Andrews, 2008). To assist practitioners in navigating these murky waters, WOM associations, such as WOMMA (U.S. WOM association) and WOMMAUK (UK WOM Association) have been established (McCarthy, 2010; Mitchell, 2007) and these associations provide important guidance to the flourishing commercial WOM industry, which is expected to reach $3 billion by 2013 (PQ Media, 2009). In short, commercial WOM has become big business. Legislators have responded to this trend; in the UK it is a criminal offense for marketers not to disclose the origins of positive WOM about a brand (ASA-CAP, 2011; Hall, 2008). Moreover, in December 2009, the U.S. Federal Trade Commission released guidelines on product endorsement and made it mandatory to disclose commercial WOM. To assist practitioners in their efforts to comply with these guidelines, the WOMMA issued disclosure guidelines for commercial WOM (Comer, 2010). However, senders of commercial WOM messages may be reluctant to disclose their commercial motivation (Ahuja, Michels, Walker, & Weissbuch, 2007), a behavior known as “concealment” (Kozinets, de Valck, Wojnicki, & Wilner, 2010), thus potentially undermining the FTC and WOMMA guidelines. This raises an important issue for government agencies and nonprofit organizations that wish to educate and protect consumers: consumers can


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generally detect traditional advertising, such as TV commercials, but they may struggle to differentiate between undisclosed, commercial WOM and traditional, noncommercial WOM. This may prevent consumers from “discounting” or excluding commercial WOM because of its lack of authenticity (Notarantonio & Quigley, 2009), which could lead to suboptimal choices for the individual consumer and the “commercialization of chit-chat” for society (Carl, 2006; Martin & Smith, 2008; R. Walker, 2004). Such trends are likely to become more commonplace when considering the rapidly growing number of consumers who are incentivized to endorse brands via Twitter, Facebook, or on blogs (Stone, 2009). In short, some critics may see commercially motivated WOM as a tool to “con” consumers.

AIMS OF THIS ARTICLE Previous research has called for more attention into covert marketing practices, such as undisclosed commercial WOM (Ashley & Leonard, 2009; Sprott, 2008). Following this call, the present article aspires to fill three research gaps; Firstly, this article acts as a consciousness raiser for public sector professionals, members of the nonprofit community, and academics, of the rapid increase of commercial WOM and also of the many academic studies that have implicitly or explicitly assumed a commercial perspective in their treatment of WOM. Explicit manifestations of a commercial perspective are evident in studies that have focused on how to measure (Reichheld, 2003) and manage WOM for commercial gain (Ennew, Banerjee, & Li, 2000; Haywood, 1989; Williams & Buttle, 2011), and in many studies on referral marketing (Biyalogorsky, Gerstner, & Libai, 2001; Buttle, 1998; Ryu & Feick, 2007; Schmitt, Skiera, & Van den Bulte, 2011). Implicit manifestations of a commercial perspective are also common in WOM literature but are more difficult to identify. These range from papers with “managerial implications” (Brown, Bhadury, & Pope, 2010; Trusov, Bucklin, & Pauwels, 2009) to papers using commercial brands (Godes & Mayzlin, 2009; Keller & Fay, 2009), and papers that investigate WOM in a business-tobusiness context (Beltramini, 1989; Lacey & Morgan, 2009; Money, 2004; Money, Gilly, & Graham, 1998). WOM has also been referred to as “WOM advertising,” which further underscores marketing academics’ seemingly prevailing view of WOM as a commercial tool (Arndt, 1967b; Brooks, 1957; Dichter, 1966; Phelps, Lewis, Mobilio, Perry, & Raman, 2004). Conversely, little research has investigated WOM from a consumer protection and education perspective (Simonsohn, 2011; Singh, Kilgore, Jayanti, Agarwal, & Gandarvakottai, 2005; Weinberg & Davis, 2005), few WOM studies have been conducted in noncommercial settings, such as arts (Hausmann, 2012), education (Kamins, Folkes, & Perner, 1997), health care (Dobele & Lindgreen, 2011; Gelb & Johnson, 1995), or charitable trusts (Cermak, File, & Prince,



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1991), and—importantly—no research to date has overtly conceptualized proconsumer WOM and focused explicitly on how nonprofit organizations and the public sector could utilise WOM for proconsumer purposes. Secondly, one of the key reasons why commercial marketers are increasingly using WOM for their purposes is its strong influence on consumers, yet little research has sought to bring together the various factors that make WOM so effective at reaching consumers and changing their behavior and attitudes (Watts & Dodds, 2007). The third research gap this study hopes to fill has arisen through the publication of many empirical WOM studies over the past six decades on one hand and the relative scarcity of discoveryorientated conceptual papers on the other, leading to a fragmented body of knowledge and an incomplete understanding of WOM (Wells, 1993; Yadav, 2010). This study is a first step towards addressing these three research opportunities. The article synthesises findings from more than 60 years of WOM literature, and develops the first practitioner-friendly conceptual model that explains why WOM is such an effective tool for informing and persuading consumers. To provide a counterweight to the many studies that provide advice to commercial WOM marketers, this article then issues nine recommendations for government agencies and nonprofits, specifically for consumer affairs practitioners who help consumers navigate through an increasingly complicated and—arguably—opaque marketplace.

CONCEPTUALIZING PROCONSUMER WOM Proconsumer WOM has four characteristics that differentiate it from commercial WOM, namely its origin, its purpose, its content, and its valence. Firstly, proconsumer WOM typically originates from a nonprofit or public sector agency, rather than a for-profit organization. Secondly, proconsumer WOM has a consumer’s best interest at heart, such as affecting behavioral changes not necessarily related to the purchase of a product (e.g., how to live a healthy lifestyle and where to find the nearest public park). Thirdly, even if proconsumer WOM is about products, this information is often at the product category level rather than the product brand level (e.g., how to purchase a car rather than what car to purchase). Moreover, even if an explicit product recommendation or warning is issued it is likely to include a selection of brands, rather than singling out one brand. Fourthly, proconsumer WOM can vary in its valence from positive to negative, which is a key difference between proconsumer WOM and viral marketing, which specifically aims to promote one brand ahead of its competitors. In short, proconsumer WOM can be defined as noncommercially motivated WOM, which aims to educate and protect consumers by sharing beneficial information about a wide range of purchase and nonpurchase-related consumer


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choices. In this sense, proconsumer WOM can help to counterbalance the increasing commercialization of WOM. Proconsumer WOM involves three principal players: firstly, consumers; secondly, government and related agencies that directly focus on consumer issues (e.g., the Office of Fair Trading [UK], the Federal Trade Commission [United States]) and also agencies whose principle concern may not be consumer issues (e.g., Association of National Park Authorities [UK], the National Park Service [United States]). Thirdly, proconsumer WOM can also involve a variety of nonprofit organizations that may or may not have the primary goal of consumer protection and education at heart (e.g., Which? [UK] and Consumers Union [United States] versus the British Heart Foundation and the American Heart Association). Many such nonprofit and public sector agencies have limited budgets for promoting their cause, which makes WOM a particularly powerful tool for them: WOM has been shown to be highly effective at reaching consumers and often it is free. Proconsumer WOM can be a powerful tool for noncommercial organizations that are operating in increasingly commercialized environments (e.g., greater competition for members and funding). This has necessitated the adoption of increasingly commercial tactics (e.g., the use of celebrity advertising or focusing on the customer experience with the aim of improving customer loyalty; de los Salmones, Dominguez, & Herrero, 2013; Hume, Sullivan-Mort, Liesch, & Winzar, 2006). The adoption of proconsumer WOM may be able to lessen the pressures of operating in such quasicommercial environments. The following section develops the first conceptual model that dissects WOM’s effectiveness, with the aim of encouraging nonprofit organizations and public sector agencies to utilize proconsumer WOM for their promotional purposes.

WOM’S EFFECTIVENESS Over the past six decades, WOM has proven to be a remarkably effective information source in consumer decision-making. For example, in comparative studies WOM has been shown to the most trusted and most reliable source of information by consumers (East, Hammond, Lomax, & Robinson, 2005; The Nielsen Company, 2009). Various studies have shown that WOM is a more important source of information than print advertising, television advertising, marketing events, and media appearances (Beal & Rogers, 1957; Buttle, 1998; East et al., 2005; Hinde, 1999; Katz & Lazarsfeld, 1955; Traylor & Mathias, 1983; Trusov et al., 2009). Importantly, third-party reviews, such as Which? and Consumer Reports have been shown to causally affect consumer choice (Simonsohn, 2011), yet WOM has been found to be more potent still (Herr, Kardes, & Kim, 1991; Hinde, 1999; Price & Feick, 1984). Research has also shown that WOM can be even more powerful than the consumer’s


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own attitude (Bourne, 1957; East et al., 2005). Therefore, WOM appears to be an extremely powerful tool for nonprofit organizations and government agencies. To dissect WOM’s effectiveness, it may be useful to think of two fundamental factors: WOM’s reach, or the number of consumers exposed to it, and its personal impact, that is, its impact on consumers’ attitudes and behaviors. Once these factors are understood it then becomes possible for the public sector and nonprofit organizations to harness their respective strengths for proconsumer purposes.

Factor 1: WOM’s Reach WOM’s reach is about the number of consumers exposed to the WOM, and there are seven drivers which appear to contribute towards this factor. Firstly, WOM spreads across ethnic groups and geographic boundaries (Money, 2000; Takada & Jain, 1991; Watkins & Liu, 1996). WOM has been found to be important in western countries such as Canada, the UK, and the US (Bansal & Voyer, 2000; Brown, Barry, Dacin, & Gunst, 2005; Ranaweera & Prabhu, 2003), Asian countries, such as Japan, Singapore, and South Korea (Babin, Yong-Ki, Eun-Ju, & Griffin, 2005; Money, 2004; Wirtz & Chew, 2002), and developing countries, such as India and the former Soviet Union (Bauer & Gleicher, 1953; Ennew et al., 2000). Secondly, WOM has been found to be an important decision-making influencer in categories as diverse as corporate services (Money, 2000), personal services (Reichheld, 2003; Swanson & Kelley, 2001), basic goods (Belk, 1971; Du & Kamakura, 2011), complex goods (Arndt & May, 1981; Stuteville, 1968) and nonprofits (Bayus, 1985; Cermak, File, & Prince, 1991). Thirdly, almost all consumers engage in WOM (Bone, 1995; Bristor, 1990), with studies reporting incidence rates of more than 50% of consumers (Anderson, 1998) to as many as 80% of consumers engaging in WOM (Bone, 1992; Larsen & Hill, 1954). Such high incidence rates are supported by Keller (2007) who found that the average American consumer participates in 121 WOM conversations in a typical week. Fourthly, a number of studies support the notion that at least half of all consumers rely on WOM when making purchase decisions (Barnes, 1986; Engel, Blackwell, & Kegerreis, 1969; Engel, Kegerreis, & Blackwell, 1969; Feldman & Spencer, 1965; C. Walker, 1995), although this proportion varies by product category (East et al., 2005). Fifthly, WOM’s speed also contributes towards its reach. For example, one study found that 90% of innovators who had trialled a product had spoken to at least one person only a few days after the product trial (Engel, Kegerreis et al., 1969), and other research has supported the notion that WOM can spread quickly (Shiller, 2000; Watts, 2003). Importantly, the speed with which WOM is spreads is even greater for digital WOM (Phelps et al., 2004; Qualman, 2009).

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B. Lang and R. Lawson 3. Retransmission & multiple dyads

1. Retransmission A

B

C

H C

2. Multiple dyads B

A

E

I

B

F D

J G

A

K

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4. Low reproduction rate

5. High reproduction rate

FIGURE 1 Retransmission and multiple dyads spread proconsumer word-of-mouth further.

The final two conditions that contribute towards WOM’s reach are critical. Firstly, all WOM involves the transmission of information from at least one sender to at least one receiver. However, WOM can spread far further than this, through “retransmission” (Bristor, 1990; Watts & Peretti, 2007). That is, WOM may be received by a consumer who then passes the message on to another consumer who also passes the message on and so forth (Figure 1, Panel 1; Arndt, 1967c). Retransmission has been shown to occur for traditional WOM (Brown & Reingen, 1987; Reingen, 1987; Reingen & Kernan, 1986) as well as digital WOM (Phelps et al., 2004). Secondly, the fact that WOM can be shared with more than one person (i.e., “multiple dyads”) is the seventh driver that contributes towards WOM’s reach (Figure 1, Panel 2). The average number of receivers per sender has ranged from a relatively low number of three people (Bowman & Narayandas, 2001; Larsen & Hill, 1954) to 7.9 people in the United States and up to an average of 9.5 people in Sweden (Anderson, 1998). Together, retransmission and multiple dyads contribute towards WOM’s ability to spread exponentially. This potential to spread can be calculated through WOM’s reproduction rate (Watts & Peretti, 2007). A reproduction rate of 100% indicates that there are as many senders in one wave (w1 ) as there are receivers in the next wave (w2 ). As can be seen in Panel 3 of Figure 1, reproduction rates are affected by both retransmission (e.g., individual “F” did not pass on WOM) and multiple dyads (e.g., individual “B” passed on WOM to two others). Depending on retransmission and multiple dyads, WOM’s reproduction rates can range from low to high, resulting in vast differences in the number of consumers exposed to a message (Panels 4 and 5 in Figure 1).


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Due to the seven characteristics discussed thus far, WOM has the ability to reach many consumers. The following section discusses WOM’s second major strength, its personal impact on consumers.


Factor 2: WOM’s Personal Impact The second factor, WOM’s personal impact, captures why WOM has such a strong impact on consumers’ attitudes and behaviors. Six drivers emerge from the literature as contributing towards WOM’s personal impact. Firstly, it is generally agreed that the persuasiveness of WOM is mainly due to WOM being seen as credible, trustworthy, and reliable (Arndt, 1967c; Dholakia & Sternthal, 1977; Heckman, 1999; Richins, 1984; Sobczak, 1990). For example, one study found that 55% of WOM receivers rate WOM’s believability as nine or ten on a scale ranging from 0 to 10 (Keller, 2007). The second and third drivers are closely linked: WOM has been found to be highly persuasive due to the receiver’s ability to give feedback (Arndt, 1967b, 1967c) and the sender’s ability to deliver tailored (Lazarsfeld, Berelson, & Gaudet, 1948) or personalized communication (Bolen, 1994), where information may be filtered or one’s own interpretation added, making it more relevant to the receiver (Arndt, 1967c). Fourthly, research has identified that more accessible and diagnostic information has a greater impact on consumers (Feldman & Lynch, 1988), and WOM fares well in both accessibility and diagnosticity compared to nonpersonal sources of information such as advertising (Herr, Kardes, & Kim, 1991; Lynch, Marmorstein, & Weigold, 1988). Fifthly, WOM can have different types of content: factual WOM (e.g., how many calories are burned by different sports), evaluative WOM (e.g., whether a particular sport is more enjoyable), and behavioral WOM (e.g., a recommendation to engage in a particular sport to lose weight and to lower the risk of a heart attack; Harrison-Walker, 2001; Reichheld, 2003; Swan & Oliver, 1989). Sixthly, WOM can also vary in its emotional appeal, and research has shown that messages with higher emotional appeal are more likely to be retransmitted (Phelps et al., 2004). Similar categorizations (e.g., emotional and rational) can also be applied to traditional advertising, but what sets WOM apart is its more frequent use of emotion and evaluation (Arndt, 1967a; Liebermann & Flint-Goor, 1996). The seventh and final driver that contributes towards WOM’s personal impact on consumers separates it even more clearly from other marketing communication channels: WOM ranges in its valence from highly positive to highly negative (Anderson, 1998; East, Hammond, & Wright, 2007; Soderlund, 1998; Wirtz & Chew, 2002). This stands in stark contrast with information that is disseminated through channels such as advertising, personal selling, or public relations, which is almost exclusively positive about the brand that is being promoted. This is a key aspect of WOM, and makes it

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particularly applicable for proconsumer purposes as it can encourage behavior (e.g., recommending fuel efficient cars), remain neutral, or discourage behavior (e.g., to avoid cereals with excessive sugar levels).


PUTTING IT TOGETHER: A MODEL OF WOM’S EFFECTIVENESS Figure 2 summarizes the 13 drivers of WOM in one model. Thus far WOM’s reach and personal impact have been discussed independently of each other. However, rather than being independent, WOM’s reach and personal impact are interdependent of each other. Firstly, WOM’s reach influences WOM’s personal impact. For example, the higher the number of people who utter consistent WOM to a consumer, the higher the chances of that consumer following the collective advice (Sweeney, Soutar, & Mazzarol, 2008; Watts, 2003). Thus, if proconsumer WOM has sufficient reach, its personal impact is also likely to increase. Conversely, WOM’s personal impact can also influence its reach. For example, research has found that message content, such as entertainment value, affect and the persuasiveness of the message, can influence consumers’ intentions to share WOM with other consumers (e.g., multiple dyads) and their intention to retransmit WOM (Lang, 2007; Phelps et al., 2004). Thus, if WOM has high personal impact, it is also more likely to result in higher reach.

High proportion engage in

High proportion rely on

Effective across product categories

Can spread quickly

Re-transmission

Reach

Global incidence

Multiple dyads

WOM’s Effectiveness Full spectrum: positive to negative

Impact

Objective, evaluative, conative and affective Accessible and diagnostic

Credible, trustworthy and reliable Ability to give feedback

Tailored and personal

FIGURE 2 Factors that contribute towards word-of-mouth’s effectiveness (color figure available online).


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RECOMMENDATIONS TO INCREASE THE REACH AND PERSONAL IMPACT OF PROCONSUMER WOM


The previous section delineated the first conceptual model explaining why WOM is an effective tool to reach, inform and influence consumers. Public sector professionals and nonprofit organizations should attempt to maximize both WOM’s reach and its personal impact, creating a synergistic effect between the two. The following nine recommendations will enable government agencies and nonprofits to use proconsumer WOM more effectively.

Recommendation 1: Maximize Reproduction Rates and use Big Seeds to Spread Proconsumer WOM WOM’s reach can be high as it spreads virally through multiple dyads and retransmission. However, reaching a country’s entire population may prove difficult as reproduction rates are often less than 100%, with one study reporting reproduction rates ranging from 4.1% to 77% (Watts & Peretti, 2007). In other words, each successive wave of recipients is likely to be smaller— not larger—than the previous one. Cumulatively, changes in the reproduction rate have a substantial multiplier effect on how many consumers are reached by a message; the closer reproduction rates are to 100%, the more dramatic the changes are (Figure 3). For example, improving WOM’s reproduction rate from 15% to 50% (an increase of 35%) will see the number of consumers who are reached increase by only 70% (e.g., 118 versus 200 reached in Table 1). However, improving the reproduction rate by another 35% (from 50% to 85%) will see the number of individuals reached increase by 334% (e.g., 200 versus 667 reached in Table 1). Thus, maximizing the reproduction rate is critical if public sector practitioners and nonprofits wish to spread proconsumer WOM widely. Despite government agencies’ and nonprofits’ best intentions, WOM’s reproduction rate is still likely to be less than 100%. Therefore, practitioners may wish to rely on larger numbers—“big seeds”—of consumers to spread their messages (Watts & Peretti, 2007). As outlined in Table 1, applying the exponential growth generated by high reproduction rates (e.g., 85%) to large seeds (e.g., 100,000 individuals) can result in substantially more consumers being reached by proconsumer WOM. This can be done by simply exposing a greater number of consumers to information that is relevant to them, which may be particularly relevant for government agencies with large numbers of external stakeholder. For example a government agency could circulate social media messages and e-mail alerts that are specific to a compliance deadline, or when calling for public submissions on an issue. Such tactics are likely to increase the reach of proconsumer WOM.

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B. Lang and R. Lawson 200,000 180,000

Number of o consumers reached


160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% Reproduction rate

FIGURE 3 Reproduction rates have a dramatic impact on the number of consumers reached (color figure available online). Note. The size of the initial seed is 10,000 consumers. Calculations are based on a formula by Watts and Peretti (2007).

TABLE 1 Number of Consumers Reached Under Varying Reproduction Rates and Seed Sizes Reproduction rate Seed size (Individuals) Small: 100 Large: 100,000

Low (15%)

Moderate (50%)

High (85%)

118 117,647

200 200,000

667 666,667

Note. Calculations are based on a formula by Watts and Peretti (2007).

Recommendation 2: Persuade by Reason, Motivate through Emotion Proconsumer information can have strengths but it also has an important weakness: it almost exclusively focuses on rational arguments (i.e., factual and evaluative comments). For example, product tests by Which? and Consumer Reports generally cover factual, evaluative and behavioral aspects, but they seldom have an emotional appeal. Advertisers, on the other hand, have long understood that persuasion is more likely to occur when one persuades by reason and motivates through emotion (Allsop, Bassett, & Hoskins, 2007). WOM is no different: research has found that emotional messages and messages that are judged to be enjoyable and entertaining are more likely to be retransmitted (Christophe & Rime, 1997; Lang, 2007; Phelps et al., 2004). Such appeals may be particularly appropriate for nonprofits, which could


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use some of the appeals that advertisers have successfully used for decades: humor, suspense, surprise, and fear, to name but a few (Brown et al., 2010). Another means of building an emotional connection with the audience is through storytelling, which is an important and often-used mechanism for transmitting WOM (Woodside, Sood, & Miller, 2008). If done in an appropriate manner, such tactics could increase the personal impact of proconsumer WOM by, for example, drastically increasing the reproduction rate of the latest product test results, or by spreading the results of a court ruling in a case that is of interest to consumers.

Recommendation 3: Tap into WOM Motivators to Boost Proconsumer WOM Another powerful way to encourage more proconsumer WOM is to tap into the key motivations of why consumers engage in WOM, such as a sender’s high involvement with a product (Dichter, 1966; Engel, Kegerreiset et al., 1969; Richins, 1984; Wangenheim, 2005). Public sector professionals and nonprofits can gauge consumers’ involvement in at least two ways: through direct measurement (e.g., survey) and by proxy (e.g., consumers’ online selfselection behavior). Once identified, high involvement consumers are highly suitable seeds for a proconsumer WOM campaign due to the relevancy of the information to them and to their network. A second key motivator for engaging in WOM is altruism, which is an individual’s need to foster and develop relationships by sharing enthusiasm, expressing care, friendship, and love for one another. Altruism has been shown to be an important motivator for traditional WOM (Dichter, 1966; Sundaram, Mitra, & Webster, 1998) as well as digital WOM (Phelps et al., 2004; Smith, Coyle, Lightfoot, & Scott, 2007). Importantly, proconsumer WOM is an excellent way to express altruism, as consumers share helpful information, such as optimal choices (e.g., identifying “best buys” in a product category) without being financially rewarded, or having a conflict of interest. To tap into this powerful WOM motivator, government agencies, but more likely nonprofit practitioners need to make the connection between altruism and their services more explicit. For example, using phrases such as “show you care – information share” and allowing subscribers to “gift” one-off consumer advice and information could help to satisfy their desire to engage in altruistic behavior. In this sense, proconsumer WOM may be better a better vehicle to display altruism compared to commercially motivated WOM.

Recommendation 4: Stimulate WOM through Advertising and Other Tools WOM can be stimulated through a variety of mechanisms, such as advertising, public relations, or sales promotion (Bristor, 1990). In particular,


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advertising has been singled out as a key driver of WOM (Graham & Havlena, 2007; Niederhoffer, Mooth, Wiesenfeld, & Gordon, 2007), with one study reporting that 20% of WOM referred to paid advertising and that this type of WOM was more likely to generate recommendations to buy a brand (Keller & Fay, 2009). Government agencies and particularly smaller nonprofits do not have budgets to allow them to run nation-wide TV campaigns with a high frequency but advertising on the Internet in general, and on sites such as YouTube in particular have elevated the ability of such organizations to make engaging and innovative audio-visual content available to large audiences. Using such tools could increase the reach of proconsumer WOM. Apart from advertising, the Internet also appears instrumental in eliciting WOM, with one study finding that around 12% of WOM is elicited by this channel (Keller, 2007). Public sector agencies and particularly nonprofits could improve their performance in this area, particularly when comparing their web presence with that of a successful commercial site. Sales promotion could also be used more effectively to stimulate WOM. For example, many consumer affairs organizations do not allow for “product trial” of their most useful services. In other words, often the information that consumers really want to access is only available in a paid-for manner. Allowing free access for a limited time or paid access to one-off reports (rather than asking consumers to commit to a full subscription) is likely to generate proconsumer WOM due to the low perceived risk for the consumer in relation to the value of the information. Beyond advertising and related tools, the public sector in particular has the opportunity to generate a lot of proconsumer WOM through innovative practices. For example, car drivers in Sweden who travel at or below the speed limit have the ability to win a portion of the fines paid by drivers who are exceeding the speed limit. This “gamification” approach has generated much proconsumer WOM by incentivizing good behavior, rather than solely punishing noncompliant behavior as is typically done (National Public Radio, 2011). Scope for similar practices exists across a wide variety of government agencies, such as, complying with a tax return deadline or keeping to a medical appointment schedule. Employing such innovative practices is likely to result in an dramatic increase of proconsumer WOM.

Recommendation 5: Ask Consumers to Spread Proconsumer WOM By asking consumers to spread proconsumer WOM, a greater number of senders can be activated. The key mechanism to encourage consumers to spread WOM is an incentive, which is a tactic that was adopted by commercial practitioners many years ago (Arndt, 1967b; Dholakia & Durham, 2010; Godes & Mayzlin, 2004b; C. Walker, 1995). For example, customers of the Japanese clothing retailer Uniqlo increased their chances of winning a discount or cash prize every time they invited others to shop at the site via Twitter or Facebook (Hung, 2010). Similarly, incentivizing proconsumer


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WOM could be done in a number of ways, for example, by rewarding those who have been voted as providing the most helpful advice to other consumers. Such steps may be particularly effective in increasing the reach of proconsumer WOM by nonprofit organizations.


Recommendation 6: Facilitate Consumer-to-Consumer WOM As mentioned earlier, consumer affairs practitioners can serve as both the source of proconsumer WOM and also as the facilitators of consumer-toconsumer WOM. To facilitate the latter, government agencies and particularly nonprofit organizations, who may have the added advantage of dedicated members, should actively ask their stakeholders to provide proconsumer WOM, particularly in social media (Kaplan & Haenlein, 2010), where it is captured over a period of time and can be accessed by many others through mechanisms such as discussion boards, knowledge banks, blogs, micro-blogs (tweets), social networking sites (e.g., Facebook) or content communities such as YouTube. Secondly, channels (e.g., an online forum run by a nonprofit) must be designed to make it easy to provide and access proconsumer WOM, otherwise consumers are unlikely to use such channels. To encourage consumer-to-consumer WOM, specific channels could be moderated by staff and labeled as “quality assured.” Such steps may lead to ‘hyper-credibility’ where the naturally high credibility of WOM is further enhanced through the quality assurance of highly knowledgeable, impartial, noncommercial sources, such as an organization engaging in product testing. Lastly, the aesthetic design of channels is critical to their success. Studies have shown that the perceived usability of technology is highly correlated with users’ impressions of how it looks, and users’ overall judgment of a website is best predicted by its perceived beauty (Shenkman & Jonsson, 2000; Tractinsky, 1997). In other words, if online tools are meant to increase dialogue with government agencies and nonprofit organizations, their aesthetic design needs to be a guiding thought, not an after-thought. This is an area of relative weakness for many noncommercial organizations. WOM is regularly monitored by commercial companies through free online tools (e.g., Google Alerts, Technorati) and through proprietary tools (e.g., Alerti, Netpinions). Therefore, the final three recommendations focus on how the public sector and nonprofit organizations can also benefit from monitoring the content of WOM and those that engage in it.

Recommendation 7: Identify WOM Seekers WOM can be sought (when a consumer asks for advice) or unsought (when a sender shares WOM without being asked). Research has found that sought WOM has a greater impact on consumers than unsought WOM

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(Nyilasy, 2006), with one study estimating the impact to be 1.5 to 2 times higher (East et al., 2005). Thus, proconsumer WOM will have a significantly greater impact if public sector practitioners and nonprofits can correctly identify information seekers and supply them with the information they need. Identifying information seekers can be done in a number of ways, for example, through their information requests and interactions with frontline staff, through their online browsing behavior on an agency’s website, by monitoring social networking sites, or through surveys. Identifying information seekers has the potential to increase the personal impact of proconsumer WOM.

Recommendation 8: Identify the Topics Where WOM is Most Sought Consumers’ need for proconsumer WOM may be particularly high in certain product categories. For example, categories with many competing brands, such as breakfast cereals or categories in which consumers risk is high, such as consumer electronics may be more appropriate for proconsumer WOM due to its ability to reduce perceived risk (Cunningham, 1965; Wangenheim, 2005). WOM may also be especially suitable for product categories, such as financial services, health care, and education, which can have long-term effects and can have high levels of experience and credence attributes (Patti & Chen, 2009; Sweeney et al., 2008). Surveys and a variety of online tools track online conversations, particularly in social networking sites (T. Walker, 2010) and therefore allow an assessment of the areas in which consumers are most interested or most concerned. For example, members at a nonprofit organization can easily measure which web pages are accessed most frequently, which product categories or topics generate the highest number of enquiries, and they can use various online tools to capture and track which topics or brands are most frequently discussed. Identifying where proconsumer WOM may be most beneficial is likely to increase the reach and personal impact of such information.

Recommendation 9: Identify WOM Influentials WOM is spread by all kinds of consumers, but some consumers talk more than others. For example, Larsen and Hill (1954) found that the number of individuals that one sender spoke to ranged from 0 to 35 and another study found that digital WOM varied even more, ranging from one to 177 per month per individual (Phelps et al., 2004). Four types of consumers may be particularly suitable for spreading proconsumer WOM: market mavens (those who are knowledgeable about the marketplace in general), opinion leaders (those who are knowledgeable about one product category in particular), multipliers (e.g., media and community leaders) and consumer



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apostles (those who have a higher than average desire to help others). Each of these four groups would be well placed to facilitate proconsumer WOM, although the importance of market mavens and opinion leaders is still somewhat debated (Du & Kamakura, 2011; Godes & Mayzlin, 2004a, 2009; Leskovec et al., 2007; Price, Feick, & Higie, 1987; Smith et al., 2007; Watts & Dodds, 2007). The most effective influencers belong to more than one of these four groups; for example, they are an opinion leader, multiplier and a consumer apostle, which makes them a very powerful seed to start proconsumer WOM. Using such influencers can increase the reach of proconsumer WOM. Market mavens, opinion leaders and consumer apostles can be identified through surveys and by monitoring consumers’ (online) advice-giving activity. Multipliers can be identified through industry associations, public registers and other online resources. Utilizing such groups to spread proconsumer WOM can be easy to implement. For example, treating them to privileged knowledge, such as “sneak previews” of the results of an extensive product test, will also tap into another key motivator for sending WOM: the need for self-confirmation (Chun-Yao, Yong-Zheng, Hong-Xiang, & ShinShin, 2007; Hennig-Thurau, Gwinner, Walsh, & Gremler, 2004; Still, Barnes, & Kooyman, 1984; Stuteville, 1968; Sundaram et al., 1998) and the prestige that is associated with being seen as an expert (Arndt, 1967b; Belk, 1971; Buttle, 1998; Dichter, 1966; Engel, Blackwell et al., 1969; Whyte, 1954). This section has issued nine explicit recommendations on how public sector agencies and nonprofit organizations can utilize proconsumer WOM. However, not all recommendations apply equally to nonprofit organizations and public sector agencies because such organizations differ in many regards, such as their size, funding, control over their goals, stakeholders, public exposure, reporting requirements, and political influence (Amirkhanyan, Kim, & Lambright, 2008). For example, a nonprofit may find it easier to appeal to emotions, not just cognition (Recommendation 2) than a government agency. Therefore, Table 2 indicates how applicable each of the nine recommendations may be to nonprofit organizations and public sector agencies respectively, and the likely effect of each recommendation on WOM’s reach and its personal impact.

CONCLUSION Commercial marketers discovered long ago that WOM is a highly effective tool to reach the marketplace, which is why they have been enthusiastic users of this powerful tool for decades. This article aimed to increase WOM’s usage as a proconsumer tool, that is, one that has consumers’ best interests at heart. To achieve this, this article conceptualized proconsumer WOM and how it differs from naturally occurring WOM and commercial WOM.

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TABLE 2 Applicability of Recommendations and Their Effect on the Reach and Personal Impact of Proconsumer Word-of-Mouth Applicability of recommendation to


Recommendation 1. 2. 3. 4. 5. 6. 7. 8. 9.

Maximize reproduction rates and use big seeds Appeal to emotions, not just cognitions Tap into WOM motivators Stimulate WOM Ask to spread proconsumer WOM Facilitate consumer-to-consumer WOM Identify the seekers Identify the topics where WOM is most sought Identify influentials

Effect on WOM’s

Public Nonprofit Personal sector organizations Reach impact ∗∗

∗∗

∗∗∗

∗∗

∗

∗∗∗

∗∗

∗∗∗ ∗

∗∗

∗∗∗

∗∗

∗∗∗

∗∗

∗∗∗

∗

∗∗

∗∗∗

∗∗∗

∗

∗

∗∗∗

∗∗∗

∗∗

∗∗

∗∗∗

∗

∗∗∗

∗∗

∗∗∗

∗∗∗

∗∗∗

∗

∗∗∗

∗∗∗

∗

Note. Recommendations are classified as having one of three levels of applicability and effect: ∗∗ = moderate, ∗∗∗ = high.

∗

= low,

This article then developed the first practitioner-friendly conceptual model explaining what drives WOM’s effectiveness in the marketplace. The reach-impact model and the 13 drivers have highlighted WOM’s suitability as a proconsumer tool for government agencies and nonprofits. For example, WOM’s inter-ethnic appeal suggests that government agencies can use proconsumer WOM for their purposes in ethnically diverse regions. The finding that WOM is applicable across many product categories shows that proconsumer WOM is also likely to work for a variety of topics, ranging from appealing products, such as consumer electronics or fashion, to what may be seen as more mundane issues, such as advice on budgeting or nutrition. Because most consumers engage in and rely on WOM also means that most consumers can be senders and receivers of proconsumer WOM. The speed with which WOM can spread is particularly useful for time critical proconsumer WOM, such as product recalls and warnings (Martin, 2008). Moreover, combining the credibility of the public sector and nonprofit organizations with the credibility of WOM as a channel is likely to dramatically increase the effectiveness of proconsumer WOM. In short, the reach-impact model suggests that WOM is a highly suitable channel to distribute proconsumer information and to use WOM to encourage consumers to interact and engage with government agencies and nonprofits in a more proactive manner. The reach-impact model can also serve as a checklist for proconsumer WOM campaigns; the more factors that apply, the more powerful the WOM campaign is likely to be. For instance, if the content of a WOM message is highly engaging, then multiple dyads and high retransmission rates are likely, thus resulting in higher reach and greater personal impact of WOM, thus being more effective across the network.



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Academics may also benefit from this article in a number of ways. Firstly, this article aspires to serve as a consciousness raiser as it demonstrated how, to date, academics have implicitly and explicitly treated WOM from a commercial perspective, rather than a public sector or nonprofit perspective. Academics may also benefit from the model presented in this article. Over the past six decades, significant progress has been made in the field of WOM, but some questions remain unanswered. This article fills one of these gaps by conceptualizing proconsumer WOM and explaining what makes WOM such an effective information source in consumer decision-making. It is hoped that the reach-impact model will stimulate discussion and further research in this important area. This article issued nine specific recommendations that will increase the reach and personal impact of proconsumer WOM. In summary, WOM spreads through a viral process, therefore government agencies and nonprofit organizations need to maximize reproduction rates and start with “big seeds.” Practitioners were encouraged to appropriately use a wider range of emotional appeals, such as surprise, suspense, hum or, and storytelling, rather than solely focusing on rational arguments. This study also argued that tapping into key WOM motivators such as involvement, altruism, or “being in the know” would spread proconsumer information further. Lastly, public sector agencies and nonprofit organizations wishing to use WOM more actively were given six recommendations pertaining to stimulating, simulating, facilitating, and monitoring proconsumer WOM. It is hoped that this article has contributed to a better understanding of a phenomenon that has caught the imagination of marketing academics and of commercial marketers. Well-designed and engaging proconsumer WOM will help to restrengthen the ultimate power in the marketplace: that of consumers themselves.

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