Can We Talk? The Impact of Willingness to Recommend on a New-to-Market Service Brand Extension Within a Social Network

Abstract

Adoption of new services in the marketplace, and the impact that word of mouth (WOM) has on adoption, has long been of interest to marketers. Managers have therefore become increasingly interested in measuring WOM activity most commonly through the recommend intention metric. The circumstances under which the predictive ability of this metric can be established, however, are not clear. This research provides the first longitudinal examination of the relationship bet ween recommend intention and the adoption of a new-to-market service (NTMS) brand extension. Analysis is conducted using anonymized data provided by a large U.S. telecommunications provider for 791 customers and their corresponding telephone network (11,552 individuals). The findings indicate an interaction effect where recommend intention predicts new service adoption only when the recommending customers are more recent adopters of the service and are in more frequent contact with the potential customer. Therefore, when managers are using the recommend intention metric to predict adoption, there is a need to take into consideration the exposure of the individual to others in their network and the timing of their adoption.