How Word-of-Mouth Transmission Encouragement Affects Consumers’ Transmission Decisions, Receiver Selection, and Diffusion Speed

Abstract

This research considers how marketers can encourage or “nudge” consumers to transmit word of mouth (WOM), such as referrals or recommendations to friends, in a manner that helps reach, inform, or influence large numbers of consumers quickly, which is an outcome referred to as faster diffusion. Building on studies showing diffusion is faster when higher-connectivity people are involved, the authors propose a mechanism based on network externalities that encourages regular customers to select receivers who have higher levels of social connectivity. Three experiments and a simulation demonstrate the mechanism’s efficacy by showing (i) how regular consumers can be encouraged to select higher-connectivity friends as WOM receivers, (ii) why this mechanism works, and (iii) how encouraging this receiver selection behavior can lead to faster diffusion at the macro level. The findings extend the WOM marketing literature by introducing an approach for encouraging transmissions to specific types of consumers that is a viable alternative to directly targeting higher-connectivity consumers in seeded WOM campaigns, which is often practically infeasible.

Keywords: marketing