When a consumer has a foul experience with an organization's products – whether it's buying a automobile with safety defects, becoming the victim of a knowledge breach, or having luggage lost by an airline – you would possibly think they don't care much concerning the company's good intentions.
Yet the other appears to be true. When deciding whether to report a negative incident, customers look like more influenced by whether or not they consider the corporate is friendly, sincere, and well-meaning—a top quality that marketing scholars and practitioners confer with as “brand warmth”—than by whether or not they consider the corporate can produce high-quality products, or what marketing experts confer with as “brand competence.”
That is The most significant result our team's recent research, published within the Journal of the Academy of Marketing Science in March 2024.
We wanted to know how brand identity affects customers' willingness to report problems, so we analyzed greater than 500,000 product damage reports submitted by vehicle owners to the National Highway Traffic Safety Administration between 2005 and 2021.
Keeping other aspects constant, we found that the “warmer” a automobile brand is, based on Young and Rubicam “Brand Asset Valuator” data, the more likely customers are to report problems with the products.
In fact, for a mean automaker, a one percentage point increase in brand enthusiasm was related to nearly 100 additional reports in a mean 12 months. In contrast, increasing brand competence had no impact.
At first glance, this might suggest that being nice is bad for business. But first glances could be deceiving. When we looked more closely at the information and classified consumers' descriptions of the incidents as either feedback intended to assist the corporate improve or complaints intended as punishment, we found that customers were motivated to provide feedback to nicer firms.
Each percentage point increase in brand comfort was related to a 4 percent increase within the feedback share.
Why it is necessary
As marketing Professorswe examine why consumers ensure selections in order that firms can higher serve them. Since firms spend plenty of money and time constructing a picture that appeals to consumers, it might be useful for them to know what qualities consumers value and the way this affects their decision-making.
Our research suggests that an organization like Ford – a brand that scores with high warmth – may benefit more from an investment in customer support than an organization with a low heat rating comparable to Rolls-Royce.
In addition, managers in each high and low customer satisfaction organizations can learn from this. For example, we found that managers can win back customers once they reply to customer reports of negative incidents by acknowledging the shopper's desire for feedback.
Finally, our research complements a bigger body of labor on decision making. Research in psychology has shown that folks judge others first by their intentions after which by their ability to implement those intentions. Interestingly, researchers have found that the reverse order applies when consumers judge firms. Our work complicates this picture even further.
What's next
Our team is working on constructing a tool that can hopefully help firms retain customers who report data leaks, service outages, or other bad experiences. Specifically, we’re training a big language model that can help managers reply to customer complaints.
Unlike generative AI tools like ChatGPT, that are trained on huge amounts of knowledge from the Internet, our tool is subject to complaints from regulators and the Better business officeand the responses of companies. Our model will distinguish between responses that generate consumer disputes and responses that don’t, generating responses that help the business retain customers. We intend to check and improve the model as regulators and third parties update their databases.
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