The Effects of Incentives, Satisfaction, Tie Strength, and Deal Proneness on Word-Of-Mouth Behavior

ABSTRACT - Although more than 30 years of research has established the power of word-of-mouth (WOM), little work has focused on how it could be managed effectively. This study used a 3 x 3 x 2 experiment to examine how WOM is affected by incentives (no incentive, $25, $100), satisfaction (dissatisfied, satisfied, extremely satisfied), and tie-strength with the recipient of WOM (weak vs. strong). Consumer deal proneness was investigated using a quasi-experimental design.

Citation:

Patricia Chew and Jochen Wirtz (2001) ,"The Effects of Incentives, Satisfaction, Tie Strength, and Deal Proneness on Word-Of-Mouth Behavior", in AP - Asia Pacific Advances in Consumer Research Volume 4, eds. Paula M. Tidwell and Thomas E. Muller, Provo, UT : Association for Consumer Research, Pages: 335.

Asia Pacific Advances in Consumer Research Volume 4, 2001      Page 335

THE EFFECTS OF INCENTIVES, SATISFACTION, TIE STRENGTH, AND DEAL PRONENESS ON WORD-OF-MOUTH BEHAVIOR

Patricia Chew, National University of Singapore, Singapore

Jochen Wirtz, National University of Singapore, Singapore

[The authors thank Cindy Koh Kai Lin for her excellent research assistance throughout this project.]

ABSTRACT -

Although more than 30 years of research has established the power of word-of-mouth (WOM), little work has focused on how it could be managed effectively. This study used a 3 x 3 x 2 experiment to examine how WOM is affected by incentives (no incentive, $25, $100), satisfaction (dissatisfied, satisfied, extremely satisfied), and tie-strength with the recipient of WOM (weak vs. strong). Consumer deal proneness was investigated using a quasi-experimental design.

The results showed that although high satisfaction levels resulted in positive WOM and purchase recommendations, incentives significantly enhanced the likelihood of generating WOM. Specifically, an incentive encouraged more positive WOM, and reduced negative WOM. Furthermore, the size of the incentive necessary to encourage WOM was found to be dependent on the deal proneness of the consumer. High deal prone consumers responded better at lower incentive levels. Finally, consumers expressed more extreme opinions, which reflected more closely their satisfaction levels to strong tie relations than to weak tie relations, and the favorability of WOM and purchase recommendation was dependent on the satisfaction levels.

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