Word-of-mouth in services: a multiple case study

This study explores the processes and characteristics of WOM in the Australian business environment by examining how executives of large organisations deal with communications and customer relationships. WOM has become increasingly significant to business performance. Traditionally a face-to-face phenomenon, WOM can now also be remote via use of the telephone and the Internet. -- To date the majority of the WOM literature considers WOM to result from service beyond expectations. Even when significant resources are concentrated on customer relationship management (CRM), this study demonstrates that WOM emanates from other sources such as organisation-influenced communications, internal processes and WOM networking, thus supporting the recent work of some authors who have suggested that stimuli other than happy, satisfied customers may influence WOM. Opinion is divided on the relative importance of positive and negative WOM. However, there is general acknowledgement that WOM affects organisational performance. Positive WOM can contribute to new customer acquisition, reflect customer loyalty and enhance the organisation's image and identity, while the opposite effect of negative WOM can lead to organisations concentrating on complaint resolution to prevent switching, and crisis management to prevent damage to image, reputation and identity. In this study of service organisations the threat of negative WOM to business performance has been found to dominate management processes. -- A regional energy company and two multinational organisations, from the financial services and non-profit sectors, participated in the study. Semi-structured face-to-face interviews were conducted with managers from the marketing and communication departments, and participant observation took place within business meetings. -- The cross-case analysis has provided specific recommendations for managers of the three cases to take advantage of the WOM phenomenon in enhancing their business success. The Six Pillars of WOM model is a specific output that can be used constructively to identify, examine and manage cross-organisational processes that influence both positive and negative WOM. This study has shown that organisational efforts can have significant impact on WOM and new customer acquisition, even in markets where there is low customer satisfaction. Indeed, organisation-influenced WOM and WOM networking techniques have a much greater role than anticipated or previously realised. Nonetheless, much exploratory research remains before the WOM phenomena are well enough understood to the point where their application leads to improved organisational performance.