Word-of-Mouth is a very strong contributor when it comes to brand building and product performance. We all know about the influence this may have on the purchase decision itself but what about the satisfaction with the purchased item and the resulting word-of-mouth dynamic?
A study by Sangyoon Yi and Jae-Hyeon Ahn (2017) did cover the effects that consumer expectations have on the post-purchase satisfaction. The research was conducted in the form of an agent-based model drawing from diffusion and choice models. Concerned products were durable goods that are not purchased with a high frequency e.g. like cars and phones.
Whereas high consumer expectations lead to increases in sales and word-of-mouth stimulation, low expectations normally are vice versa. The findings suggest that for example products that have a low value do benefit from a promotion aiming at high initial expectations, whereas products with a high value should focus on a promotion that mirrors the actual product value. In this case, possible surprises by the consumer would be reduced for the latter.
The authors recommend that companies which are introducing new products should focus on how consumers are valuing a certain product and form product expectations. In this context, also attention should be paid to how different customers product values and expectations really are. As such products of high value are said to benefit stronger from word-of-mouth as the level of uncertainty is lower for the consumer. In both cases this can be achieved by promoting a product across different marketing channels with a similar expectation strategy.
Sangyoon Yi, Jae-Hyeon Ahn, (2017) “Managing initial expectations when word-of-mouth matters: Effects of product value and consumer heterogeneity”, European Journal of Marketing, Vol. 51 Issue: 1, pp.123-156.