Peter KerkhofSonja Utz

Camiel BeukeboomVU University Amsterdam

Dept. of Communication Science9th International Conference on Research in Advertising

ICORIA, June 25/26 2010Madrid, Spain

The ironic effects of organizational responses to negative online consumer reviews

The rise of social media

• 2003: No Facebook, no Twitter, no Linkedin, no Hyves

• 2009:• Hyves 10.000.000 members in the Netherlands• Facebook: 4000.000.000 members, 600.000 new members,

60.000.000 use mobile Facebook• Linkedin: 53.000.000 members, 1 new member each second

(86.000 daily)• 75.000.000 members on Twitter, 800.000 tweets per hour

• 19% of all tweets is brand related• 20% of all brand related tweets is evaluative

– 55% positive, 33% negative

Source: Jansen et al., 2009

Brands in social media

Brands in social media

Brands in social media

Brands in social media

Brands in social media

The effects of consumer generated content

• Productevaluations

• Sales

• Brand awareness

• Reputation

• Trust

Brands have started to respond

Top 100 Dutch brands (2009):- 35 present in social media- mainly Twitter & Hyves

Brands have started to respond

Online reputation management:- Monitoring- Adding content - Starting brand communities - Influencing the influencers- Responding to online complaint & questions

Brands have started to respond

Brands have started to respond

Brands have started to respond

• Interpersonal • Computer-mediated• Public• Shared• On consumers’ territory

A new kind of brand communication

A new kind of brand communication

• Customer care• Marketing• PR• Sales• Product development

• Audience effects of responding to online complaints

• No response vs. ....–Apologies vs. denial– Informal (vs. formal) responses–Empathic reactions– .....

• Source effects

Our research

• Dependent variables– Credibility (competence, integrity)– Product evaluations– Review(er) credibility– Communicated customer commitment– Conversational human voice – Underdog effect

Our research

Design

Complaint

Apologies

Formal

Informal

Denial

Formal

Informal

No response

• Online experiments• n = 20 – 25 per cell• Apologies vs. denial vs.no response• Dependent variables: evaluation of brand,

review(er), • Moderator: prior brand involvement

Study 1

Study 1

Study 1

Study 1

Results

Results

Results

• Study 1:• online customer care backfires

• organizational competence • reviewer competence• severity of complaint

• especially (but not only)•when responsibility is denied•among brand involved customers

Study 2: Effects of informal vs. formal responses

- 2 (formal vs. informal) x 2 (apologies vs. financial compensation) design + control

Results Study 2

• Cognitive responses• Communicated relational commitment • Conversational voice• Fairness • Underdog effect

Positive effects of informal responses

Perso

onlijk

, exc

uses

Onper

soon

lijk, e

xcus

es

Perso

onlijk

, ver

goed

ing

Onper

soon

lijk, v

ergo

eding

Geen r

eacti

e0.0%

20.0%

40.0%

60.0%

Cognitive responses (% positive)

Study 3

- Replicates effects of informal reactions

- Moderation by company size

Conclusions

- be careful how to respond to brand mentions in social media

- be informal

- apologize when necessary

- is not responding still an option?