Consumers Perceptions and Behaviour about Brands: Effect of Complaint Resolutions on Social Media

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1 Article can be accessed online at Consumers Perceptions and Behaviour about Brands: Effect of Complaint Resolutions on Social Media Ashwini K. Awasthi*, Madhura Kane** Abstract Customers can act in a variety of manners on experiencing product or service failures. Complaining to the firm is one of such options that are beneficial to the firm. It helps the firm to identify problems, and satisfy customers for long term relationships. Social media is an emerging platform for communicating with the firms for complaint resolution. Younger generation is increasingly using social media channels like Facebook and Twitter to post complaints. Some companies have taken up the call and they are trying to resolve these complaints. Social media users provide positive or negative feedback on the basis of such complaint handling. This exploratory study looks at customer perceptions, and their behavioural intentions in response to companies solutions to complaints on different social media channels. Keyword: Social Media, Customer Complaints, Customer Perceptions, Customer Behaviour Introduction Despite best efforts, firms may not be able to avoid productor service failures at one or the other time. Product failures may result from a focus on continuous product innovation, while customer service failures and service (offering) failures may result from people and process interfaces. Customers act in different ways when they decide to complain about such failures: they may complain with the firm, or complain to their primary or secondary groups, or they may reach out to third parties (Singh, 1988; Alexander, 2002). Dissatisfied customers would either switch brands, or they would spread negative word of mouth (Blodgett, Wakefield & Barnes, 1995). Complaints are the means to find out information for improving customer satisfaction (Boshoff, 1997). How customers would act after they have put across their complaints depends on organisations actions on complaints (Awasthi & Rawani, 2013; Davidow, 2003; Tax, Brown & Chandrashekaran 1998). Appropriate handling of complaints results in positive outcomes for the firms, such as increased repurchase intentions, commitment, and goodwill (Bitner 1990, Goodwin & Ross 1992, Tax et al. 1998, Smith & Bolton 1998, Hart, Heskett & Sasser 1990; McCollough, Berry & Yadav, 2000). Poor customer complaint handling results in alienating the customer further and the firm could lose them (Boshoff, 2005). This cannot be a good strategy as getting a new customer is a time consuming and much costly affair (Fornell & Wernerfelt, 1988; Bolton, 1997; Smith & Bolton, 1998; Hart et al., 1990). The objective of firms complaint handling strategy should be to foster fruitful relationships with the customers (Boshoff, 1997). In this context, social media has taken up a central role in our lives for our daily dose of news updates as well as for brand related information, apart from catching up with friends. It has also become a place for people to spell out their opinions about the products and brands they use and the issues they are facing with them. A good social media strategy can help companies to hear the customer voice and solve the problems they face. Companies can leverage their IT infrastructure for gathering intelligence and providing value to customers. Facebook and Twitter which have over 1 billion users, recognise India as one of their major user bases. In terms * ** Professor of Marketing at the Institute of Management, Nirma University, Ahmedabad, Gujarat, India. awasthi.ashwini@gmail.com Business consultant with Cybage Software Pvt. Ltd., Pune, Maharashtra, India. madhurakane.imnu@gmail.com

2 Consumers Perceptions and Behaviour about Brands: Effect of Complaint Resolutions on Social Media 77 of online fan coverage, telecom companies like Tata DoCoMo have more than 13 million fans on their Facebook page and 69 thousands followers on Twitter which is well beyond the scope of some of their counterparts, similarly Vodafone has12.5 million and 66 thousand (Yadav 2013). Social media allows consumers to communicate directly with the company (Vinerean, Dumitrescu, & Tichindelean, 2013). Its usage has been demonstrated to have a relationship with the firm s ability to manage relationships with customers (Rodriguez, Peterson, & Krishnan, 2012). As it is a new channel of communication with customers, companies want to understand that how they can reach their target audience effectively and create relevant interactions (Lipsman, Mudd, Rich, & Bruich, 2012). Organisations should be concerned not only with customer satisfaction, but also the way in which customers interact and post comments on their social media pages (Pinto & Mansfield, 2012). Complaining on social media has increased and it is expected to go on increasing in the future (Tripp, Gregoire, & Business, 2011). Millennials (people born after 1980) are attracted to social media to achieve 3 C s : connection, conversation and community (Pinto & Mansfield, 2012). Because of their proficiency in using the social media, these people would be using it for complaining and hitting back in the absence of improper solutions to their complaints.they also take their complaints to social media to garner more exposure and attention. N OF S Compared to tele-complaints, customer problems are resolved faster and efficiently through social media, since the solution can be published to multiple audiences at the same time. Social media can further help organisations check and monitor the complaints about their products and services on a daily basis. However, social media also makes companies vulnerable to public disparagements by unhappy customers. This study attempts to understand how complaint resolution on social media affects the consumer s perceptions and behaviour towards the brands. O OF S For understanding how fast and effective complaint resolution on social media affects consumer s perceptions and behaviour across demographic variables, the study has following objectives. To find out the speed of company s response for complaints posted. To investigate consumers perception and behavior after complaint resolution, across different social media platforms. To investigate perceptions and behavior after complaint resolution, across gender and occupation. R rc M t odo o Since no appropriate measurement instrument was found in the literature, we developed an instrument to measure the relevant variables. The instrument was checked with the existing literature and with the objectives of the study, for its content validity. It was pre-tested before it was sent to a convenience sample of 110 people. The questionnaire had screening questions that asked the respondents if they had complained on social media, and if they had received a response on that complaint. 91 of them replied affirmatively on these questions, and responded on the subsequent statements. Respondents were in the age group of 18 to 35 years. All of them had used Facebook or Twitter, majority (87%) having had made complaints on Facebook. Sample had 54% men and 46% women; 67% students and 33% working professionals. Table 1: Speed of Response for Complaints Posted Facebook Twitter Resolved within 30 minutes 0 8 Resolved within one hour 9 50 Resolved in more than one hour but the 24 0 same day Complaint resolved in more than one day Complaint/comment was deleted from the brand s social media page 8 50 Numbers in the table are percentages of the total number of respondents within respective social media channel All results are significant at p<0.05 Table 1 shows the speed of response to complaints posted in the two channels. It is seen that complaints are resolved either faster or slower on Twitter, while most of the time they are resolved slowly on

3 78 International Journal of Marketing and Business Communication Volume 3, Issue 3 & 4, 2014 Facebook. Half of the complaints had been deleted on Twitter, while most of the complaints are retained on Facebook. Table 2 shows that solutions provided on Twitter are considered more suf icient than the ones provided on Facebook. People are more satis ied with the responses on Twitter (though this result is statistically not signi icant). Possibility of negative or positive word of mouth is also higher on Twitter. On the other hand, Facebook gives more exposure and attention to the complainants. Table 2: Perception and Behavior After Complaint Resolution, Across Social Media Platforms Perceptions/Behaviour Facebook Twitter The solution provided through the social media page was sufficient. Complaining about a brand on social media can generate more attention. Satisfied with the response the brand gave through its social media page. Reading other s experiences and issues with the brand on its social media page affects my opinion about the brand. On my complaint being resolved effectively, I will recommend the brand on social media. I would increase spending on the brand on receiving good customer support and complaint resolution on social media. I will tell my friends and spread negative word on social media if my complaint was not handled properly by the brand. I will switch to another brand on reading about poor experiences of my friends with the brand. *p< * 3.8* 4.8* 4.3* * 4.1* * 3.5* Numbers in the table are means of ratings on a five point scale, 5 representing most favourable rating point. Table 3 shows difference in perceptions and behaviour across gender and occupation. Working professionals found the solutions on social media sufficient than students. Students and men have higher chances of recommending the brand on successful complaint resolutions, while working professionals would talk more negatively in case of unsatisfactory complaint handling. Table 3: Perceptions and Behavior After Complaint Resolution, Across Gender and Occupation Perceptions/Behaviour Women Men W P Students The solution provided * 3.2* through the social media page was sufficient. Complaining about a brand on social media can generate more attention. Satisfied with the response the brand gave through its social media page. Reading other s experiences and issues with the brand on its social media page affects my opinion about the brand. On my complaint being 3.5* 3.8* 3.3* 3.9* resolved effectively, I will recommend the brand on social media. I would increase spending * 2.9* on the brand on receiving good customer support and complaint resolution on social media. I will tell my friends and * 4.0* spread negative word on social media if my complaint is not handled properly by the brand. I will switch to another brand on reading about poor experiences of my friends with the brand. *p<0.05 Numbers in the table are means of ratings on a five point scale, 5 representing most favourable rating point. WP=Working Professionals Di cu ion Number of people on Facebook is larger than other channels, and therefore number of complaining population can also be expected more on this channel. Other channels like YouTube, Google+ etc. do not find representation in the sample (though they would have some representation in the population). However, brands are taking longer to respond on Facebook. And the solutions provided are also not sufficient as compared to those on Twitter.

4 Consumers Perceptions and Behaviour about Brands: Effect of Complaint Resolutions on Social Media 79 Faster (and slower) response and sufficiency of solutions can be the reasons for higher propensity of positive and negative word of mouth on Twitter. Though the results of satisfaction on complaint resolution are statistically not significant, but they indicate that satisfaction levels on Facebook would be lower than those on Twitter. People think that they would derive more mileage by complaining on Facebook, and Facebook complaints have also not been deleted by the brands. But to leverage these advantages, faster response time, and sufficient complaint resolution needs to be in place. Gender wise differences in customer perceptions and behavior show that men have higher chances of recommending the brand, and students are inclined to recommend and spend more on the brand after effective complaint resolution. The study has highlighted the importance of fast and effective complaint resolution, and it has also pointed to the existence of differences across demographic variables. However the work has limitations, which are also pointers for future studies. First, the questionnaire needs further refinement in terms of content validity, formatting, and pre-testing. Second, more variables such as the time of posting complaints, types of complaints etc. can be incorporated. Third, study can be done for individual brands in different social media channels to see the effectiveness of the same brand across diverse channels. Fourth, those people whose complaints are not resolved can be studied to understand their actual perceptions and behaviour. Finally, sample in the study after screening the respondents was left small in size, which resulted in many non-significant results. Therefore studies with bigger sample sizes, representing diverse demographic variables can through more insights onto the subject. R r nc Alexander, E. C. (2002). Consumer reactions to unethical service recovery. Journal of Business Ethics, 36, Awasthi, A. K., & Rawani, M. (2013). Effect of organisational responses on customer s perceived justice: Moderating role of causal attributions. Journal of Marketing and Communication. Bitner, M. J. (1990). Evaluating service encounters: the effects of physical surroundings and employee responses. Journal of Marketing, 52, Bitner, M. J., Booms, B. H., & Tetreault, M. S. (1990). The service encounter: Diagnosing favorable and unfavorable incidents. Journal of Marketing, 54, Blodgett, J. G., Wakefield, K. L., & Barnes, J. H. (1995). The effects of customer service on consumer complaining behavior. Journal of Services Marketing, 9(4), Bolton, R. N. (1997). A dynamic model of the duration of the customer s relationship with a continuous service provider: The role of satisfaction. Marketing Science, 17(1), Boshoff, C. (2005). A re-assessment and refinement of RECOVSAT: an instrument to measure satisfaction with transaction-specific service recovery. Managing Service Quality, 15(5), Boshoff, C. (1997). An experimental study of service recovery options. International Journal of Service Industry Management, 8(2), Davidow, M. (2003). Organizational responses to customer complaints-what works and what doesn t. Journal of Service Research, 5(3), DiAndrewLipsman, G. M. (2012). The power of like: how brands reach (and influence) fans. Journal of Advertising Research. Fornell, C., & Wernerfelt, B. (1988). A model for customer complaint management. Marketing Science, 7(3), Goetzinger, L., Park, J. K., & Widdows, R. (2006). E-customers third party complaining and complimenting behavior. International Journal of Service Industry Management, 17(2), Goodwin, C., & Ross, I. (1992). Consumer responses to service failures: Influence of procedural and interactional fairness perceptions. Journal of Business Research, 25, Hart, C. W. L., Heskett, J. L., & Sasser Jr., W. E. (1990). The profitable art of service recovery. Harvard Business Review, (July-August), Pinto, M. B., & Mansfield, P. (2012). Facebook as a complaint mechanism: An i nvestigation of millenials. Journal of Behavioral Studies in Busines. McCollough, M. A., Berry, L. L., & Yadav, M. S. (2000). An empirical investigation of customer satisfaction after service failure and recovery. Journal of Service Research, 3, Rodriguez, M., Peterson, R. M., & Krishnan, V. K. (2012). Social media s influence on business-to-business sales performance. Journal of Personal Selling & Sales Management, 32(3).

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