The most optimal way to deal with negative consumer review

Abstract

PurposeAfter a negative consumer review (NCR) has been posted on an online shopping site such as Amazon.com, the immediate concern of a brand holder should be to focus on the steps the brand should take to rebuild the unhappy consumers’ trust. The purpose of this paper is to employ the signalling theory to analyse whether a brand response, a customer response or a response that combines both when responding to a NCR leads to better product purchase intentions at the customer end.Design/methodology/approachIn a laboratory study comprising 351 respondents, six different response scenarios are tested, both for a well-known and an unknown brand. The experiment employs a 6 (response scenario: single brand response, single customer response, brand response and one customer response or vice versa, brand response and three customer responses or vice versa)×2 (customer-based brand equity: strong/weak) between-subject design.FindingsThe findings show that after a NCR, the subjects perceive a customer response as more trustworthy than a response from an unknown brand. However, customer-based brand equity changes the whole story. If a strong brand responds, the purchase intentions of the subjects are similar to those generated by a single customer’s response. In addition, after considering multiple responses, it can be seen that a response combining a brand and a customer response has a higher effect than from a single response. Furthermore, the authors demonstrate that perceptions are more favourable if several customer responses are sent in case of an unknown brand.Originality/valueThe originality of this paper lies in the fact that it tries to explore how the consumers perceive multiple responses from different sources after a NCR has been posted. The results highlight that a response that combines a brand and a customer response has a significantly higher effect than what is achieved from a single response. It must also be noted that customer-based brand equity plays a key role.