Compensation in NeWOM: The Influence of Compensation on Purchase Intention when Responding to Negative Electronic Word of Mouth

Authors

  • Robert Zinko Prairie View A&M University
  • Paul Turcott University of Houston
  • Zhan Furner East Carolina University
  • Yubing Liu Prairie View A&M University
  • Bindu Farzana Prairie View A&M University

Abstract

Brandholders have little control over negative reviews, however most review platforms allow brandholders to respond to reviews. The characteristics of review responses that influence brand attitudes and consumer intentions are not well understood. This study seeks to contribute to our understanding of the influence of review responses on consumer outcomes. A model of purchase intention based on a review response factor (congruence between the service failure and the level of compensation identified in the response) is developed and tested using a scenario-based experiment. 15 scenarios are developed (3 levels of service failure and 5 responses). 5,607 responses are analysed using ANOVA and pairwise comparisons. Relationships are identified between compensation and purchase intention. Specifically, any level of compensation increases purchase intention more than no compensation. Additional, purchase intention is higher when compensation matches the level of service failure (higher compensation for more severe service failure results in higher purchase intention). However, we were not able to support a relationship between excessive compensation and purchase intention.

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2023-04-21

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Vol. 36 No. 1 (2023): The Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior

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