When Disgruntled Consumers Hold Their Tongue

Who hasn’t seen the glory of negative word of mouth in action — the Facebook or Twitter firestorms that erupt after someone is kicked off an airplane or a hapless fast-food server uses a politically incorrect term?

Yet, as Matthew Philp points out, there are far greater number of aggrieved consumers who clam up and avoid spreading the bad news. Even when justified, he asks, why do they withhold negative opinions?

To find out, Philp, a doctoral candidate in marketing at Smith School of Business, conducted four studies that looked at the psychology behind negative word of mouth (NWOM). His insights may help firms to better understand dissatisfied consumers, particularly millennials with social media savvy and a big focus on self-image.

Most research around NWOM is based on the belief that people share negative experiences to spread the word about what a firm did wrong, blaming the company rather than themselves.  Philp’s approach is to view dissatisfied consumers as victims who partly blame themselves.

Internalizing the Negative Experience

Philp says that prior to the Internet, it had been theorized that people failed to share negative experiences because they lacked the time or technical tools. “The Internet took away all those sorts of economic deterrents,” he says.

Instead, his research revealed that consumers to a certain degree internalize the negative experience. Though very dissatisfied with the firm, many consumers feel their role in a negative interaction contributed in some way to the outcome, leading them to feel foolish. Not wanting to appear incompetent, they are less likely to share this negative experience with others.

“Consumers recognize that the firm is to blame for this but at the same time, consumers can also blame themselves,” says Philp.

Working with Smith School of Business professor Laurence Ashworth, Philp carried out four studies involving undergraduate students. In one of the studies, participants were asked to imagine that they needed a new camera for an upcoming trip. Some were told they had to purchase a new camera immediately as they were leaving for the airport, while others were told they had a month before the trip. All participants bought the same camera from the same store, for the same price. They later found out that the same camera was available at another store for either the same price or a considerably lower price.

The authors found study participants – especially those who had plenty of time to shop around – felt incompetent when they realized they could have paid a lower price. Consumers felt “more incompetent as a consequence of believing they could have avoided the negative experience in hindsight,” the researchers write in a working paper.

Misplaced Feeling of Guilt

In the next study, participants were asked to imagine that they had purchased a camera that had broken within the first year, and that the firm would not honour the one-year warranty. Half of the participants had been told that, rather than simply having a standard one-year warranty, they had been given the option of a two-year warranty, which they had rejected in favour of the standard warranty.

The researchers found that although both sets of consumers were mad at the firm for violating the warranty, participants who had explicitly chosen the one-year warranty felt partly responsible for the outcome – even though they clearly were not – and were consequently less keen on sharing NWOM for fear that it might make them look incompetent.

Companies should remember that negative word of mouth offers important market intelligence

In a third study, participants were asked to imagine themselves buying a new smart phone, and that they had chosen either a well-known brand or a riskier, lesser-known brand, both with identical specifications. Participants subsequently found out the phone was not very good, and were given the opportunity to comment on either an anonymous or a non-anonymous online message board.

The researchers found that when the message board identified commenters by name, those who had chosen the riskier, lesser-known brand were much less likely to spread NWOM. The reason: participants felt more responsible for choosing this phone relative to participants who had selected the well-known brand, which caused them to feel somewhat responsible for the negative outcome. When the message board was anonymous, however, all participants spread NWOM, regardless of which phone they had purchased, because there were no concerns about how they might appear. 

In a final study, participants imagined they bought a camera with either cash or a gift card, both of which they had received as a gift. After buying the camera, they discovered that it was available at another store for much less. Those who had used cash were less likely to share NWOM because they perceived that they could have easily purchased elsewhere and consequently took some responsibility for paying too much. By contrast, participants who used a gift card – meaning they had no choice of store – felt less responsible and were subsequently less concerned that sharing information about their bad experience would make them look incompetent.

Finding the Positive in the Negative

What can firms learn from all of this? Philp cautions that the findings are based on studies of undergraduates from Canadian universities, so being Canadian and of a younger age may have played a part in how NWOM occurred. “With age, your image concerns decrease,” says Philp.

But given the buying power of millennials, he feels that firms need to take notice of what situations can influence NWOM. “They spend a lot of money,” he says. “It’s these people who might have more image-based concerns when it comes to shopping and it might apply to them a bit more.”

Perversely, companies can attract plenty of NWOM if they focus on making consumers more satisfied via gift cards, convenient locations, and default warranties. All these approaches reduce consumers’ fears of appearing incompetent and make them less inhibited to share their negative views if they feel let down.

But companies should also know that NWOM isn’t devoid of value since it offers important market intelligence. They can learn a lot from the negative word of mouth that consumers share.

Yet, more often than not, certain contexts could be limiting this behaviour.  Philp insists that firms need to pay special attention to these various contexts if they are to manage word of mouth effectively.

— Anna Sharratt