10 Days of Christmas…Consumerism: Day 6

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Image from Lisa Larter

It’s day 6 in our crash course of consumer psychology, and we’ve gotten into a lot of great work on social influence and contagion. Until now, we’ve ignored some inherently social marketplace phenomena: word of mouth advertising and customer reviews. These days, customer reviews and review sites like Yelp help consumers make purchasing decisions, or select products and services better suited to their needs. Customer reviews are supported by the concept of word of mouth, or hearing about something from someone else.

Word of mouth is powerful for several reasons. We know from social psychology that other people are often swayed by expertise or experience, and people writing product or service reviews have generally used the product or service.1 We are also persuaded more often by those familiar to us than by unfamiliar people, something researchers have dubbed “tie strength.”2 But as we’ve reviewed in past articles, complete strangers’ product choices can influence us also, so word of mouth can come from a large range of sources. And, boy, is it influential!

Research has shown that this product feedback we receive from others has both short and long-term consequences, with word of mouth affecting future decisions, as well as those made in the moment.3 In fact, researchers have found that word of mouth advertising has longer carryover effects and higher response elasticities than traditional marketing efforts.4 Basically, this means that word of mouth is more influential over time, and yields more customers per effort, than traditional marketing. As you can see, word of mouth is very desirable for businesses, and it works better on us as consumers.

Customer reviews of products or services are one expression of this type of word of mouth feedback. While browsing merchandise, you can get educated opinions and specifics about the product, as well as warnings or issues with service. Unsurprisingly, these reviews often play a role in our product decisions. For instance, book sales on Amazon and Barnes and Noble online bookstores are directly related to both the number and type of positive reviews left by other customers.5 In another study, researchers found that participants were about 20% more likely to choose recommended products than non-recommended products.6 But, luckily for companies, brand loyalty moderates the effect of product reviews, such that consumers are less likely to be swayed by reviews when they already like a brand or product.7

It’s been a wonderful journey through social influence within the consumer realm. Tomorrow, we’re turning to conceptualizations of brands as people. So, obviously, you won’t want to miss that 😉

  1. Petty, R. E., Cacioppo, J. T., & Goldman, R. (1981). Personal involvement as a determinant of argument-based persuasion. Journal of Personality and Social Psychology, 41(5), 847.
  2. Bansal, H. S., & Voyer, P. A. (2000). Word-of-mouth processes within a services purchase decision context. Journal of Service Research, 3(2), 166-177.
  3. Bone, P. F. (1995). Word-of-mouth effects on short-term and long-term product judgments. Journal of Business Research, 32(3), 213-223.
  4. Trusov, M., Bucklin, R. E., & Pauwels, K. (2009). Effects of word-of-mouth versus traditional marketing: findings from an internet social networking site. Journal of Marketing, 73(5), 90-102.
  5. Chevalier, J. A., & Mayzlin, D. (2006). The effect of word of mouth on sales: Online book reviews. Journal of Marketing Research, 43(3), 345-354.
  6. Senecal, S., & Nantel, J. (2004). The influence of online product recommendations on consumers’ online choices. Journal of Retailing, 80(2), 159-169.
  7. Ahluwalia, R., Burnkrant, R. E., & Unnava, H. R. (2000). Consumer response to negative publicity: the moderating role of commitment. Journal of Marketing Research, 37(2), 203-214.
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