Hell Hath No Fury Like a Customer Scorned

1. Hell Hath No Fury Like a Customer Scorned “Complaining Behavior, Service Recovery, and the Social Media: The New Challenge of Customer Voice and Social Power in a Web 2.0 World” Deborah L. Cowles, Ph.D. Virginia Commonwealth University October 17, 2009

2. Customer Voice & Social Power “Consumers have traditionally had little information, limited access to one another, and few outlets for feedback and communication.” Blackshaw, Pete (2008). Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000: Running a Business in Today’s Consumer-Driven World, (New York, NY: Random House), p. 4).

3. New Sources of Voice & Social Power • Internet • E-Mail • Early customer initiatives to develop complaint websites (Ward & Ostrom 2006) • Untied Airlines (Jeremy Cooperstock, 1996)

4. New Sources of Voice & Social Power • Social Media • Social networking sites (e.g., MySpace, Facebook) • Online communities, product review sites, etc. • Blogs, micro-blogs (e.g., Twitter) • User-generated content (e.g., YouTube) • United Breaks Guitars • (Song 2 – Dave Carroll, 2009) • Taylor Responds

5. What Do the Two United Stories Have In Common? • “Note that it was not the poor treatment we received from United, but rather, the subsequent disregard for a serious, polite complaint, which led to the creation of the web pages.” (Jeremy Cooperstock) • United employees “showed complete indifference to me.” (Dave Carroll) • Ineffective complaint handling and service recovery

6. Power in Marketing Research • From a social psychology perspective, power is “the ability to evoke change in another’s behavior” (Gaski 1984, p. 10) • Traditional Areas of Power Research • Channels • Sales • Advertising

7. Power in Marketing Research • Classic French & Raven Typology (1959) – deal specifically with social power. • Legitimate Power • Expert Power • Referent Power • Reward Power • Coercive Power

8. Brand Social Power • More Recently: Brand Social Power • Crosno, Freling, & Skinner 2009 • …“a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers” … • consumer perceptions of a brand’s power “to wield social power over, and induce certain behaviors among, their consumers.”

9. Social Power in Services Marketing • “Social power has been defined as an individual's relative ability to alter others' states (material, symbolic) by providing or withholding resources or administering punishment.” (Menon & Bansal 2007) • Consumer perceptions of their own social power during a service encounter.

10. High- and Low-Social-Power Consumers • High Social Power Consumers • expect providers to focus on the core service • more self-motivated and more proactive in service settings • report more self-oriented action thoughts • possibly more emotionally expressive • more vocal (tend to speak more) and interrupt others • Low Social Power Consumers • have expectations regarding the interpersonal component of service delivery • less self-motivated and more reactive in service settings • report more ruminative thoughts

11. Social Power & the Internet • Largely studied in public-policy and citizen-activism contexts. • “The internet has become the latest, greatest arrow in our quiver of social activism.”(Member of Public Citizen, an activist group) • When citizens become discontent with their relationship with corporations and their government, they can assert the social power afforded them via the Internet so as to achieve their specific goals and objectives. (Roper, 2002)

12. Consumer Activism & the Internet • Why consumers complain (traditional) • Obtain restitution • Vent anger • Help improve service • Altruism • Additional motives made possible via the Internet & Web 2.0 • Public recognition • Revenge

13. Public Recognition • The Internet provides a variety of powerful platforms for typically credible market influencers, each of which to some degree is motivated by a desire for public recognition. (Kiecker & Cowles 2001) • Opinion leaders • Market mavens • Innovators • Purchase pals • Most likely “high social power” consumers.

14. Revenge • When dissatisfied customers take the additional time and effort to participate in a firm’s complaint/recovery processes, but remain dissatisfied, then they feel a sense of “powerlessness.” (Bunker & Bradley 2007) • Consumers who feel powerless are prone to hyperbole. • “… grudge-holding was the largest reported consequence of powerlessness.” • In the marriage/family psychology literatures, grudge-holders are more likely to seek revenge.

15. Grudge-holding: History & Health • “Ancient grudges and the desire for revenge are at the root of so many of the conflicts raging across this planet.” (Burt-Murray 2008) • “Holding a grudge is not only dangerous for your health (anger causes stress on the heart) but is hazardous for the soul. When you refuse to forgive someone, you are not hurting them but you are hurting yourself by holding poison inside.” (Carpenter 2007)

16. Can the Social Media Facilitate Marketplace Justice? • Equity Theory • individuals are motivated by a comparison of the ratio of their inputs to their outcomes relative to the same ratio of comparison others. • When the comparison is unfavorable, “the individual is motivated to restore equity by any one of a number of mechanisms” (Carr, 2007) • The Internet/social media are new arrows in the quiver of mechanisms available to consumers to restore equity.

17. Can the Social Media Facilitate Marketplace Justice? • Social Exchange Theory • Procedural justice • Interaction justice • Distributive/outcome justice • Consumers have more social power to achieve fairness in the marketplace. • Firms have more ways to ensure that consumers’ complaint-handling/service-recovery expectations are met.

18. Thesis • When firms fail either to respond satisfactorily to complaining consumers or to provide inadequate service recovery, consumers have a new voice and platform made possible by the Internet and Web 2.0 technologies. • Some consumers are more likely that others to resort to this “nuclear” option • Consumer motivations differ

19. Research Propositions • Proposition 1 • 1a: Low social power consumers are more likely, compared to high power consumers, to be dissatisfied if expectations are not met regarding the interpersonal component of service delivery either during the service encounter itself or during the complaint/service-recovery process. • 1b: High social power consumers are more likely, compared to low power consumers, to be dissatisfied if expectations are not met regarding the core service which is the focus of either the service encounter itself or during the complaint/service-recovery process.

20. Research Propositions • Proposition 2 • If consumers’ complaint-handling/service-recovery expectations are not met, low social power consumers are less likely, compared to high social power consumers, to express their dissatisfaction to others via the social media.

21. Research Propositions • Proposition 3 • 3a: Low social power consumers will feel a greater level of powerlessness, compared to high social power consumers, if a firm’s service recovery efforts are perceived to lack procedural and interactive justice. • 3b: High social power consumers will feel a greater level of powerlessness, compared to low social power consumers, if a firm’s service recovery efforts are perceived to lack outcome justice.

22. Research Propositions • Proposition 4 • There is no difference between high- and low social power consumers regarding the likelihood of holding a “grudge” against the marketer so long as they feel that post-complaint/post-service-recovery expectations are not met. • Proposition 5 • There is no difference between high- and low social power consumers regarding the likelihood of engaging in hyperbole via the social media so long as they feel that post-complaint/post-service-recovery expectations are not met.

23. Research Propositions • Proposition 6 • a: The motivation for a low social power consumers’ engagement in the social media for the purposes of seeking redress following an unsatisfactory complaint-handling or service-recovery experience is more likely to be related to improving the service and for altruistic reasons, compared to high social power consumers. • b: The motivation for high social power consumers’ engagement in the social media for the purposes of seeking redress following an unsatisfactory complaint-handling or service-recovery experience is more likely to be related to obtaining restitution/compensation, venting anger/frustration, seeking public recognition, and/or getting even/seeking revenge, compared to low social power consumers.

24. Managerial Implications • In a Web 2.0 world, it is even more important for a firm to have in place well-thought-out, responsive, and effective complaint-handling and service-recovery policies and procedures so as to preclude consumers’ elevating their actions to that next level, which includes using the social media for all of the traditional motivations, as well as for other more gratuitous and vengeful purposes. • Firms should focus ever-increasing attention on “doing it right the first time” – not doing it “very right” the second time (Len Berry). • Firms must be vigilant in monitoring online “chatter” – especially for NWOM – at social media websites.

25. Future Research • The research propositions set forth here, as well as myriad others that can be both induced and deduced from the current marketing environment, are logical and sound. • They will serve as the basis for empirical research to provide the theoretical underpinnings for marketing decision-making regarding consumer social power in the context of the social media. • Marketing, consumer behavior, and other related literatures provide a more than sufficient springboard for measuring the theoretical constructs required to test these research propositions.

26. Deborah L. Cowles, Ph.D. Associate Professor of Marketing School of Business/Snead Hall 301 West Main Street Richmond, Virginia 23284-4000 804-828-1618 dlcowles@vcu.edu Contact Information