Network Analysis of Traditional Word of Mouth.

Network analysis of Word of Mouth (WOM) examines how customers exchange opinions within their social networks. Compared to standard survey questions, which typically measure the likelihood to recommend, the network approach provides more metrics (e.g., average path length, clustering coefficient, density, average degree) that can be used to diagnose customer chatter. Unfortunately, traditional WOM has not benefitted from network analysis, which usually is applied to online WOM due to the availability of stored data. Despite the pervasiveness of online WOM, recent commercial reports reveal that traditional WOM still surpasses online WOM by a large margin. Traditional WOM is also perceived as more trustworthy and persuasive than online WOM. Thus, given the heavy reliance on traditional WOM and the advances made in network analysis that deal with online WOM, the main purpose of this study is to demonstrate that network analysis is a viable option for gaining insights in traditional WOM. This is the first study to utilize a survey method for collecting WOM network data for a wide range of products, which allows a direct comparison of their network structures. While network analysis may be more demanding on the researcher and the respondents, as the study illustrates, it also is more diagnostic than a standard survey. The main study utilized network analysis by using an alter-alter method, which was used to map the WOM networks structures for multiple products. Specifically, we examined the WOM networks structure as a function of product type (search, experience, and credence products) and opinion valence (positive vs. negative). The results reveal that WOM networks are affected primarily by product type. People are most likely to share opinions about experience products, followed by opinions about search products, and least likely to talk about credence products. The effect of opinion valence is limited. These findings are of practical relevance because they show that WOM can be managed by including search, experience, or credence qualities in promotional messages. This study also is the first to compare WOM networks to the existing social network, which can serve as a benchmark for evaluating WOM campaigns. The results reveal that for most products, people do not utilize all of their social connections for WOM, but there are exceptions, such as sharing a positive opinion about a movie, where WOM chatter can exceed the social network. Introducing a new method for studying traditional WOM also brings new research questions, and the study concludes with limitations and future research directions. Overall, the conclusion is that network analysis is a viable technique for studying traditional WOM. [ABSTRACT FROM AUTHOR]