The effects of word-of-mouth incentivization on consumer brand attitude

Abstract

Purpose This study aims to conceptualize and test the effect of monetary and non-monetary incentives for word-of-mouth (WOM) campaigns on the brand attitude of those receiving an incentivized brand recommendation. It also studied whether or not the type of relationship between the recommender and the person who receives the recommendation and the expertise of the recommender moderate the impact of incentivization on brand attitude. The results should enable brand management to improve the design of WOM campaigns. Design/methodology/approach An experiment was conducted utilizing a sample of about 645 respondents in Thailand. In a 3 × 3 experimental design, three levels of incentivization and three types of social relationships were manipulated. All other variables were measured through a respondent-administered questionnaire. For incentivization of WOM, monetary reward and non-monetary reward are compared to a non-incentivized control state. The three types of social relationships are an authority relationship, a kinship relationship and a market pricing relationship between strangers as the control state. Findings The results of the experiment show that the introduction of rewards for recommendations harms the attitude of the receiver of a recommendation toward the brand. The attitude of potential buyers toward the brand can be tainted by the impression that a brand has enticed friends and relatives into profiting from their relationship. The negative effects increase further with the introduction of cash rewards. Contrary to expectations, however, the social relationship between the recommender and the new customer did not moderate the effect of incentivization. Source expertise has a direct as well as moderating effect on brand attitude. Practical implications The findings suggest that companies should use referral rewards with caution. Brand managers need to be aware that there is a trade-off between the advantages and the disadvantages of incentivized WOM campaigns. Recommendations have been derived about how to improve the design of incentivized WOM campaigns. Whether the advantages outweigh the disadvantages probably depend to some extent on brand-specific factors such as brand strength and market- or industry-specific factors, such as a credence good quality within the industry. It also emphasized that WOM campaigns need to be carefully monitored by measuring customer attitudes toward the brand. Originality/value Although past research provides valuable conceptual and empirical insights into consumer responses in incentivized WOM situations, most research has focused on the immediate effectiveness of WOM by measuring purchasing intentions. There is still a lack of information about how different kinds of incentivization affect customer attitudes toward a brand that incentivizes WOM, and how various relationship types moderate the effects; in particular, authority relationships have not yet been studied in this context.

Marketing–Quality Interface: An Empirical Analysis of FMCG Customers

“…They argue that brand name has a positive effect on perception. Moving on to the price variable, it shows that there is a positive and significant relationship with WOM (0.09) which is supported by research of Pongjit and Beise-Zee (2015) and quality perception (0.47) which is supported by Khan and Ahmed (2016); with p-values of 0.024 and 0.000, respectively, leading to the acceptance of the hypotheses. Moreover, place relationship with WOM is also significant positive with beta value of 0.64 at p-value 0.000 which is supported by the study of Veasna et al (2013) and with quality perception of 0.18 with p-value 0.000 which is supported by the study of Yaghin (2020).…”

“…On the contrary, according to Fetscherin et al (2014), loyalty and love for brand do not influence WOM. The relationship between receiver and sender of word of mouth campaign is influenced by giving financial and non-financial rewards for that particular communication regarding a brand (Pongjit & Beise-Zee, 2015). Moreover, reviews about particular product affect the customers.…”

Consumers Acceptance and Intention to Forward EWOM Messages: The Influences of Volume, Valence, Content Quality, Source Credibility and Homophily

“…There are no financial motives for the recommendations from the reviewers' perspective, so the reliability of the message source is not questioned (Hass, 1981). Furthermore, according to Pongjit & Beise-Zee (2015), senders' expertise is an essential factor for a recommendation to be passed on and followed.…”

Word of Mouth: A Literature Review

“…Pongjit and Beise-Zee [30], investigated how the incentives for the WOM can impact the brand attitude for the consumers. Their research aimed to understand how monetary and non-monetary incentives affect the various dimensions of brand image within various types of relationship.…”