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Wilfrid Laurier University School of Business & Economics
April 25, 2014
Canadian Excellence

Ranaveera - abstract

Date: Friday April 13, 2012
Time: 10:30am-Noon
Location: SBE2250
Speaker: Dr. Chatura Ranaveera
Topics: For Better or For Worse? Adverse Effects of Relationship Age and Continuance Commitment on Positive and Negative Word of Mouth

This study investigates the direct and moderating effects of relationship age, continuance commitment and satisfaction on the generation of positive and negative word of mouth (P/NWOM). Hypotheses based on the notion of liability of adolescence and the motivation to generate P/NWOM were tested with data collected through a survey of a random sample of customers of fixed-line telephone users.

Relationship age adversely impacts PWOM and the effect of satisfaction on both P/NWOM. Continuance commitment increases NWOM and causes dissatisfied customers to generate greater NWOM while not affecting the PWOM of satisfied customers. Satisfaction shows a significant non-linear effect on WOM.

Results offer strong evidence of the dark side to long term customer relationships. Recommendations focus on managing long-term relationships and perceptions of continuance commitment to minimize adverse effects. As far as we know, this research is the first to offer a theoretically grounded explanation of the direct and moderating effects of relationship age on P/NWOM behaviour. Results challenge the premise of long term customers being a panacea for numerous problems faced by firms. Findings also help explain the contradictory results in prior research on the effects of continuous commitment on WOM.

Future research could conduct longitudinal or experimental work to explicate the causal mechanisms underlying these cross-sectional survey results. Research could also extend these results to a B-B context.