All of us who think about Customer Loyalty with any regularity can agree that Word of Mouth (WOM) is important, and those discussions typically focus on the power of referrals to generate new business. New research is also looking at the impact of WOM on the sender. In a recent Journal of Service Research publication by Garnefeld, Helm and Eggert (2011), the authors argue that recommending a service provider improves the senders own loyalty.
This reinforcing effect – an Affirmation Impact – on the sender is interesting, and I think it’s there for the receiver – or a 3rd party listener- as well, when they are already also a customer. Let me explain.
WOM discussions typically focus on the impact on a non-customer hearing about a positive experience that then encourages them to try a service or product. But often these conversations, in the real world, take place between people who are often both already customers. So the sender of the message is ‘preaching to the choir’ to some extent – but still, hearing from someone else that they also have a positive impression of a company reinforces the receivers notion that ‘I made the right choice’.
I could go so far as to suggest this Affirmation Impact provides a sense of ‘I fit in’. A few months back, David Brooks wrote an interesting OpEd in the New York Times discussing various research that looks into the effect of groups. One of the studies, for example, discussed how home teams do indeed tend to get more favorable calls from referees. Moskowitz and Wertheim show that the larger, louder and closer a crowd is, the more the refs favor the home team. Or put another way: the larger, louder and closer a crowd is, the harder it is to go against them. People don’t like to be booed; they do like to feel ‘part of the group’.
So when conversations are taking place about a particular service, do we feel better when we can follow the crowd? When we can jump in and say ‘I agree, I thought they were great too…’?
My colleague Howard Lax recently posted a blog asserting that people act out of a sense of perceived interest. Dr. Lax argues that an individual’s interests are at the root of their behavior. If we believe that these interests can often include a desire to be part of the crowd (especially the ‘in’ crowd), then I think this argues again for an Affirmation Impact when you hear from others that you’ve made a wise choice. Even stronger when you get a sense of ‘I was here first’.
When your customers can feel ‘I made the right choice and others agree’, it will have an impact on keeping those customers coming back. But beware of the cascading adverse consequence of the converse, a potential Disaffirmation Impact of dissatisfied customers sharing bad experiences and swapping negative stories about a company. While this might not create a proverbial “run on the bank,” it threatens to reinforce and magnify a customer’s sense of dissatisfaction and speed their defection.