Does social couponing stimulate positive eWOM and online referrals?

Abstract

Purpose of the paper : Social couponing campaigns are becoming increasingly popular among hotels. However, while their short-term impacts have been assessed, their medium and long-term benefits for the hotels’ reputation have not been measured yet. The purpose of this study is to provide evidence of the potential of social couponing to stimulate positive electronic word ‐ of ‐ mouth (eWOM) and online referrals to hotels. In addition, this research intends to identify the factors related to the design and management of the couponing campaign, which influence the couponers’ willingness to engage in positive eWOM and referrals. Methodology : The study is based on the content analysis of 564 TripAdvisor reviews posted by guests that have stayed at 76 Italian hotels using a Groupon’s coupon. Both frequency and co-occurrence analysis are performed. Findings : The results show that social couponing stimulates intense positive eWOM and referrals. The analysis also highlights the most important coupon-related factors, which are able to influence the valence (positive vs. negative) of the eWOM. Research limits : The small sample of hotels, considered in this research and the specific features of the Italian hotel industry suggest caution in generalizing the results to other settings. Practical Implications : Hotel managers should design and manage their couponing campaigns carefully considering several factors, identified by this study, which directly stimulate positive eWOM. The findings of this research also suggest that hotel managers could use couponing campaigns as effective tools for their online reputation management strategies. Originality of the paper : This paper provides empirical evidence of the eWOM and referral effects of social couponing. Hence, it complements previous studies, which have mostly considered the short-term effects of social couponing related to sales increase.