UND's William Martin studies words-of-mouth and how they impact consumer decisions

Kate Menzies

Document Type

Article

Publication Date

6-6-2014

Abstract

UND's William Martin studies words-of-mouth and how they impact consumer decisions

"There's no such thing as bad publicity," the old adage says.

Not when it comes to companies and their reputations.

For the corporate world, word-of-mouth can be the death of a brand or company or the reason for its success. Because of its substantial impact on a business' bottom line, William Martin, an assistant professor within the University of North Dakota's Department of Marketing, decided it needed further study.

Martin, a Dean's Excellence Junior Faculty Fellow, was specifically interested in how people use word-of-mouth in purchasing decisions. What he has found is that word-of-mouth depends on aspects of both the listener and the speaker.

Contrary to popular belief, negative word-of-mouth doesn't always have a strong impact on consumption. According to Martin, it most likely depends on what product is being talked about. For instance, word-of-mouth may be considered more heavily when purchasing the latest electronic gadget compared to purchasing basic items like a loaf of bread.

What's interesting is that people don't seem to care from whom the negative message is coming. Whether from friends, family or complete strangers, it is all weighted similarly in the minds of consumers. However, this is not the case when assessing positive word-of-mouth.

Consumers are more apt to rely on people they trust when evaluating positive assessments. Because of this, Martin was curious what would happen if a firm rewards people for spreading positive word-of-mouth, a practice that is becoming common.

The result was that by gaining a reward, the person who spread the positive message was discredited in the minds of the receiver. When the listener discovered that the speaker had been compensated, the information was treated largely as noise. That, in turn, didn't have a strong impact on consumers' overall purchase decisions.

So what does this mean for companies?

By incentivizing patrons with rewards to spread positive word-of-mouth, companies may be just creating noise. Therefore, companies are not impacting consumption nearly as much as they intend to, he said.

In order to gain the trust of the listener, companies have to encourage people to spread positive word-of-mouth without incentivizing it. Marketers will have to genuinely spark enthusiasm among consumers when trying to boost the sales of a product.

Overall, Martin's research will help improve the awareness and prestige of the University. The research that faculty participate in contributes to their reaccreditation process, and also provides material to take back to the classroom.

"This research allows me to be active in creating new knowledge," said Martin.

By observing interactions involving word-of-mouth, Martin has been able to gain insight into how people form relationships with each other and their culture, as well as how emotions influence what consumers purchase.

Through this study, companies may better understand what kinds of products are more susceptible to word-of-mouth.

Companies also can use this knowledge to avoid the pitfalls of negative word-of-mouth and help create a better customer experience.

Because, after all, there is such a thing as bad publicity.

Kate Menzies University & Public Affairs student writer

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