Friday, October 07, 2005

Counter-Intuitive Findings About Positive & Negative WOM

Robert East of Kingston University (England) wanted to challenge two traditional assumptions about WOM:

1) Negative WOM (NWOM) is more frequent than positive WOM (PWOM). FALSE
2) NWOM has more impact than PWOM. FALSE

Why is PWOM more frequent than NWOM? Robert claims PWOM episodes are more frequent (3x more than NWOM) because there are 3x as many opportunities to give it (people are more likely to have satisfactory rather than dissatisfying experiences). Also, many people lack negative examples that they could provide (for example, how many people could recommend against a particular dentist when it's more likely you could recommend FOR a dentist).

Does NWOM have more impact than PWOM? Robert says we might think this because NWOM is rarer than PWOM and so we might think rare info is more surprising and informative. But based on survey results, PWOM was reported as having A LITTLE MORE IMPACT than NWOM (but the difference is not statistically significant; 64% reported PWOM impacted their decision on different categories versus 55% claiming the same effect of NWOM).

The most interesting finding, according to Robert, is that PWOM follows market share. For example, Nokia has 40% MS for mobile phones and 40% PWOM. But they also have 24% NWOM. Sony-Ericsson has 24% MS with 21% PWOM and 22% NWOM. NWOM for mobiles relates to market share but is flattened. Check out his presentation for more details.