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Word-of-Mouth System Implementation and Customer Conversion: A Randomized Field Experiment

Ni Huang¹; Tianshu Sun²; Pei-yu Chen; Joseph M. Golden³

¹ W. P. Carey School of Business, Arizona State University, Tempe, Arizona 85287 · ² Marshall School of Business, University of Southern California, Los Angeles, California 90089 · ³ Collage.com, San Francisco, California 94122

Online retailers often face the decision on whether they should implement a word-of-mouth (WOM) system on their websites. Some retailers opt not to have an in-site WOM system (e.g., Tiffany.com and Tjmaxx.com ), whereas others implement and manage an internal WOM system (e.g., Amazon.com and Macys.com ). According to a new study in Information Systems Research, authors Ni Huang (Arizona State University), Tianshu Sun (University of Southern California), Peiyu Chen (Arizona State University), and Joseph M. Golden ( Collage.com ) conducted a randomized field experiment to examine how implementing an in-site WOM system from ground zero influences customer conversion in an online retailing website. Their results demonstrate that implementing an in-site WOM system can be a double-edged sword to the online retailing website. Specifically, the impact of a WOM system implementation on customer conversion is moderated by WOM volume, such that its effect is positive above a threshold of volume and negative below the threshold. Additionally, the researchers find that WOM valence reinforces the impact of a WOM system on customer conversion. These results offer important implications for the hundreds-of-billion-dollar online retailing industry on the implementation and management of online WOM systems.

DOI

10.1287/isre.2018.0832

Volume

30 (3)

Pages

805-818

Language

en

Export

BibTeX

Sources

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