Managing negative word-of-mouth: an exploratory study

Abstract

This exploratory study investigates how executive-level and functional managers in three large organisations understand and respond to negative word-of-mouth (NWOM). The findings, based principally on analysis of 54 interviews over 3 years, show that organisations devote far more resources to the management of NWOM than they do to the promotion of positive word-of-mouth. Marketing and other customer-facing work groups play varied roles in organisational response to NWOM, which often involves complaints management and crisis management. We find that senior management, marketing, sales, advertising, PR and contact-centre staff all have different fears about NWOM and therefore respond to it in various ways. Our recommendations for better management of NWOM stress three points – leadership, organisational readiness and public relations management.

Keywords:

• word-of-mouth
• negative word-of-mouth
• WOM
• complaints management
• customer relationship management
• crisis management
• issue management
• PR
• public relations
• case study

Additional information

Notes on contributors

Martin Williams

Martin Williams, DBA, FCIM, has over 30 years experience in advertising and marketing on three continents and has held leadership positions in advertising, direct marketing, customer relationship management, online marketing and fundraising. He currently lectures at University of Technology, Sydney. Martin co-founded and was CEO of Australia’s leading direct marketing agency Cartwright Williams and CW Database Services. Martin is chair of the Salvation Army Red Shield Appeal Direct Marketing Advisory Committee and a Governor of the Medical School Sydney University. He is author of Interactive Marketing and is currently compiling a text on word-of-mouth (and electronic word-of-mouth) management.

Francis Buttle

Francis Buttle, PhD, FCIM has over 30 years experience in marketing and customer relationship management on three continents. He is Honorary Professor at Macquarie Graduate School of Management, Sydney, and was previously Professor of Marketing and Customer Relationship Management at Manchester Business School, UK. He was the world’s first professor of CRM. Francis is also Principal of Francis Buttle & Associates, a worldwide network of customer management experts established in 1979. He has published over 300 items including 11 books. His most recent books are the third edition of Customer Relationship Management: Concepts and Technologies and the eBook Social CRM: what is it and what does it mean for your business?