The Stern Award Committee, including Erik Mooi (Chair; University of Melbourne), Steven H. Seggie (ESSEC Business School), and Mrinal Ghosh (University of Arizona), is pleased to announce Brett W. Josephson, Ju-Yeon Lee, Babu John Mariadoss, and Jean L. Johnson as winners of the 2025 Louis W. Stern Award. Their winning article, “,” was published in the January 2019 issue of Journal of Marketing.��

The committee stated:

This high-quality article has significantly impacted the B2B relationship marketing literature. The authors theoretically and empirically demonstrate that three positive (exploration, endowment, and recovery) and two negative (neglect and betrayal) relationship migration mechanisms capture movement across four different relationship states. They conclude that relationship marketing strategies are state specific, thereby deepening our understanding of the theoretical and practical nuances to relationship marketing strategies.

Honorable Mention

The committee would also like to recognize an Honorable Mention for this year’s award:

“,” by Xu (Vivian) Zheng, David A. Griffith, Ling Ge, and Uri Benoliel (Journal of Marketing, July 2020).

���������t the Stern Award

The Interorganizational SIG (IOSIG) Louis W. Stern Award was established by Louis W. and Rhona L. Stern in 1999 through the ��������� Foundation (���������F). The award recognizes an outstanding article published in a widely recognized and highly respected refereed journal that has made a significant contribution to the literature on marketing and channels of distribution between three and eight calendar years after publication.

The article will be honored at the 2025 Summer ��������� Academic Conference in Chicago, IL.

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Traditionally, volunteers were thought to be motivated by the altruistic act of giving, and many chose nonprofits due to a strong sociocultural fit and personal convictions. However, volunteers now interact differently with brands in the nonprofit sector. Individuals devote fewer hours to their causes and want flexible schedules. They seek opportunities for personal growth and pick activities with potential work-related benefits. These new volunteers often show a weaker sense of affiliation with organizations.

This raises an important question: How can organizations effectively cultivate relationships with volunteers whose interests and motivations are shifting?

A finds that entertaining more distant relationships can mutually benefit nonprofit organizations and volunteers. Drawing on an in-depth analysis of the Red Cross in Vienna, Austria, our research demonstrates that organizations can effectively manage both traditional and new types of volunteers by adopting tailored relationship management practices.

Relationship Growth for Traditional Volunteers

Nonprofit brands continue to need the vision, commitment, and initiative of traditional, growth-oriented volunteers who provide the backbone of organizational activities. To allow these relationships to thrive, managers should focus on a solid material presence.

Nonprofits should establish a physical infrastructure so that volunteers can gather, socialize, and bond. Managers should provide training and competence-building activities to assist the intensification of the brand relationship. They should supply branded clothing to facilitate easy visual identification of members and communicate with members by leveraging high quality content such as exclusive print magazines.

In addition, managers need to carefully create documentation that clearly presents the brand’s history and values as well as provide a comprehensive and clear description of what volunteering entails in terms of expectations and duties. Communicating a compelling narrative consistently throughout the volunteer’s journey is crucial to sustain the path of growth and intensification.

These brand relationship practices will enable volunteers to ascend, over time, to strategic roles within the organization, including mentoring and training of future generations of volunteers. These growth-oriented volunteers, when supported with the right managerial practices, progressively become practice champions and thus constitute valuable assets for the organization.

Activating New Volunteers

New volunteers seek flexibility and opportunity; they help out when they have time and when the task fits their agenda. Adopting a pragmatic approach to the relationship is crucial for nonprofit organizations. This involves accepting a certain degree of distance to and from these volunteers, who may be less emotionally attached to the organization, and respecting their desire for intermittent engagement. What matters is not their unwavering loyalty but their existing skills.

Consequently, the managerial focus needs to shift to acquiring and activating volunteers as needed. Organizations should initially build a diverse pool of volunteers whom they can subsequently activate as needed. The key lies in utilizing systems to identify potential volunteers and communicate with those possessing desired characteristics for specific tasks. The integration of a mobile application could greatly facilitate this process.

Such practices will allow nonprofit organizations to deploy the right volunteers, in the right quantity, at the right time.

Lessons for Managers

Our research offers insights for nonprofit managers grappling with the management of volunteer relationships. We show the value that lies in distant, non-escalating relationships when managed in symbiosis with classic growth-oriented relationships. Our results point to broader implications for brand relationship management, applicable to both nonprofit and for-profit entities.

Traditional volunteering mirrors consumer–brand relationships in which individuals develop strong ties with brands and often integrate in brand communities. This type of relationship permeates marketing and consumer studies. The new volunteers we study resemble consumers who maintain a more distant and seemingly disinterested relationship with brands that they consume sporadically but regularly, without a desire to intensify the relationship. We call this a “Neither Growing nor Fading” (NGNF) relationship. NGNF relationships arguably represent a significant proportion of the interactions that consumers typically have with brands, yet there is little research to date that has focused on them.

Here are some strategies for managers to acquire and activate NGNF members:

• Actively embrace the new volunteering logic and accept that volunteers become dormant between activations.

• Develop partnerships with broadcasters to reach large audiences and communicate the organization’s volunteering story and needs via social media to generate traffic on the organization’s platforms.

• Know volunteer needs by identifying volunteer profiles for each specific volunteer job. Identify key skillset information to include in the registration form, such as education and training.

• Develop some material element to identify volunteers during their activation (light jackets, baseball caps, etc.). These materials could be lent to volunteers for the duration of their activation.

Source: Verena Gruber and Jonathan Deschênes, “,” Journal of Marketing.

Go to the Journal of Marketing

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A by the consumer research company Attest found that 89.4% of adults in the U.S. are currently either “very likely” or “somewhat likely” to shop around for the best deals on food and beverage products. In , 71% of consumers said they were likely to switch food and beverage brands to save money, and 80% believed brands conveniently cite inflation to justify price hikes.

As a result, shoppers are moving away from large national brands toward private labels. According to a , 40% of shoppers said they have purchased more private labels since 2020, with higher grocery prices as the reason.

Some national brand manufacturers also produce private labels, and with such growth, the practice is likely to become even more commonplace. However, this phenomenon has been largely unexplored because the supply of private labels—and to whom they are supplied—is a well-kept secret.

In a , we explore the complex trade-offs involved in dual branding, that is, the supply of private label products by manufacturers of national brands. We identify private label suppliers to six of the largest grocery retailers in Spain across over 260 product categories and combine that information with purchase data from a national household panel. Armed with this unique dataset, we explore the factors that drive dual branding and what effect it has on the national brands of dual branders.

We find that more than 70% of private label suppliers to these retailers supply both national and private label brands. In the majority of cases, dual branders supply private labels in categories where they have their own national brands; however, almost a third of the time, their private label categories are closely related to, but not the same as, the categories in which they have national brands. For example, consider a private label in beauty creams and a national brand in body milk. Or a private label in toast sticks and a national brand in cookies.

How Does Supplying Private Labels Help (or Hurt) National Brand Manufacturers?

Private label supply is not limited to fringe national brand manufacturers; the strongest driver of private label supply is manufacturers with a large national brand business. Manufacturers of premium and innovative national brands supply private labels, especially to a retailer whose private label is not heavily discounted. Also, the more a manufacturer depends on a retailer for its national brand revenue—and the more intense the competition it faces on that retailer’s shelf—the more likely it is to supply the retailer’s private label. In other words, manufacturers see private label supply as a way to exploit scale and try to gain influence with retailers to benefit their national brands.

Does this quest for influence actually work out? The answer, according to our study, is yes—with qualifiers. First, our research reveals that when a manufacturer starts supplying private labels to a retailer, its national brands enjoy a significant increase in relative distribution depth at that retailer. More items belonging to the brand are stocked, increasing its visibility at the point of purchase. This boost is even more pronounced for manufacturers that previously experienced declining distribution depth and faced higher competitive intensity. In effect, supplying private labels benefits national brands.

On the flip side, despite the increase in relative distribution depth, we find no corresponding boost in the relative share of dual branders’ national brands at the retailer. This may seem odd, but it is important to remember that increasing distribution depth is under the control of the retailer, but an increase in sales is up to consumers.

In sum, while supplying private labels can be a strategic move, it is not a cure-all for struggling national brands. Shelf space is a valuable resource for grocery retailers, most of whose business is still in physical stores. No retailer will continue to expand shelf space for a brand that lacks sufficient consumer demand.

Lessons for Manufacturers

Our study offers two important lessons for manufacturers:

1. Manufacturers should supply private labels if they can succeed in that business as efficient and flexible producers at scale. Those with weak national brands may be better off migrating completely into private label production.
2. Manufacturers that are considering supplying private labels in periods of excess capacity should look before they leap. They may assume they can get out of the private label business whenever they want, but terminating an arrangement with a retailer hurts their national brand distribution depth as much as starting one benefits it.

As national brand manufacturers navigate the private label landscape, our research will help them decide whether they should get into this intensely competitive business. It will also help them build competitive intelligence into the private label decisions of their channel counterparts and competitors.

From: Yu Ma, Kusum L. Ailawadi, Mercedes Martos-Partal, and Óscar González-Benito, “,” Journal of Marketing.

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Have you ever considered taking advantage of a “refer a friend” offer? Companies across a wide range of industries—such as banks, hotels, fashion and beauty products, ridesharing, and telecommunications—frequently run customer referral programs as a cost-effective way to acquire new customers. Referral programs often provide incentives to both the existing customer (i.e., referrer) and the customer’s friend (i.e., referee) contingent on the friend’s acceptance of the offer (e.g., placing an order, subscribing to the service). For example, as of October 2023, the awards both the referrer and the friend statement credits ranging from $50 to $100, and offers 2,000 bonus points to both parties for each of the referred friend’s initial five hotel stays.

Your first inclination when hearing about such simple and lucrative offers may be positive and egoistic, but the more you think about it, the more you might feel guilty and perceive the action of sending the offer to your friend as negative and against communal norms, potentially putting your friendship at risk.

Indeed, in a , authors Minzhe Xu, Zhihao Yu, and Yanping Tu find that when a company solicits existing customers to refer a friend through mutual rewards, participation rates are minimal and actual conversion rates are as low as 4%. They argue that existing customers (i.e., referrers) do not solicit these types of offers to their friends because the symbolic nature of mixing financial rewards with friendships results in feelings of discomfort, guilt, and other unfavorable emotions.

What Can Companies Do?

Currently, to facilitate the referral process, many companies generate automatic invitation messages that referrers can easily share with their friends via email, text, or social media. Interestingly, although most referral programs reward both the referrer and the friend, most invitation messages do not mention the referrer reward. The researchers conducted a survey of 45 referral programs from nine industries, revealing that only seven programs incorporated information about the referrer reward in the invitation message (e.g., “it’s a beautiful win–win”). Inconsistencies in reward disclosure exist not only across companies but also within companies. For example, Airbnb included the referrer reward in its invitation message via the email channel (“I’ll get $20 in travel credit, too”) but not the text channel.

The research contains seven studies that evaluate why consumers are hesitant to refer friends and how a business may improve the referral process to increase the referring rate, conversion rate, and overall sales. By disclosing the referrer reward in the invitation message forwarded to friends, the psychological barriers for the referrer can be negated, providing significant benefits to the business.

By disclosing the referrer reward in the invitation message forwarded to friends, the psychological barriers for the referrer can be negated, providing significant benefits to the business.

However, the authors include one caveat: the reward amount and structure matter. Sharing the referrer reward is not helpful if there is an inequality in the reward amount (i.e., if a higher reward is offered to the referrer) or if the reward process puts unequal responsibility on one recipient, such as if rewards are based on the referee’s spending. Either of these situations may highlight that the incentive structure is incompatible with friendships.

The authors provided further insights in a brief interview about their study:

Q: What challenges did you face while examining this topic? To what extent, if at all, did these challenges influence research outcomes or implications?

A: One challenge we faced was testing the effect of disclosure on the referees’ acceptance rate in the real world. Because the number of referees depended on how many current customers sent the referral invitation, the number of referees differed between the conditions, making it difficult to conclude how disclosure affects acceptance. This might be one reason why disclosure did not have a significant effect on the acceptance rate in the field studies, so we conducted lab studies to further test the effect of disclosure on acceptance.

Q: The study mentions reputational benefits from a referee’s perspective. Do you think the referrer’s brand affiliation (i.e., high vs. low) would influence the likelihood of sending a referral?

A: We speculate that current customers with a higher (vs. lower) level of brand affiliation are more likely to send a referral invitation to their friends, and the reasons can be multifold. For example, consumers with a higher level of brand affiliation may have better attitudes toward the brand and thus may be more likely to refer. It is also possible that when consumers feel more affiliated with the brand, they see the brand as a friend and thus perceive sending a referral invitation as helping the friend, which increases the referral likelihood.

Q: Some nonprofits reward donors for certain participation levels (e.g., gold-level donor status or t-shirts for blood donations). How do you see applying the reward disclosure in donor referrals to the nonprofit realm? Do you think the altruistic/egoistic nature of the donation would impact or diminish the psychological barriers (i.e., discomfort, conflict, guilt)?

A: In the donation domain, suppose a referral offer indicates that if a current donor invites a friend to donate and their friend indeed makes a donation, both the current donor and their friend can get a reward. Our disclosure effect may attenuate since some current donors may see inviting a friend to donate as a prosocial, rather than exchange, activity and thus may not feel the psychological barrier.

Q: How would materialism and exclusivity impact a referee from soliciting a shared reward for a luxury product?

A: On the one hand, current customers may see owning a high-exclusivity product as indicative of their high status relative to others and want to maintain their status, causing a negative main effect of product exclusivity on the referring likelihood. On the other hand, current customers may perceive a high-exclusivity product as more helpful to friends, causing a positive main effect of product exclusivity on the referring likelihood.

Q: What do you think the process is for the referrer when they first see the refer a friend reward offer? Do you believe a different emotion exists before the psychological barriers to communal behavioral requirements occur? Do you think they automatically think negatively when they see the offer and the disclosure changes their emotions?

A: Our theory posits that upon learning about an incentivized referral program, referrers tend to perceive the referring action as an exchange activity incompatible with the communal norms regarding the interaction between friends, leading to negative feelings (a psychological barrier). Our finding suggests that consumers generally experience the psychological barrier when faced with a referral program offer, but some consumers may have feelings other than the psychological barrier, which also affect their referring intention. The initial negative reaction toward referral programs may be automatic or deliberative, possibly determined by individual experience, product characteristics, and the context in which the referral program offer is encountered.

Q: How would you incorporate this study with future marketers in an educational setting, such as a classroom or marketing training?

A: One takeaway of this research, specifically about the design of referral programs, is to disclose the referrer reward in the invitation message, which we found could benefit multiple aspects of the referral process (e.g., the referring likelihood, the acceptance likelihood, and the conversion rate). This strategy and its boundary conditions can be incorporated into marketing training about referral programs. Another takeaway of this research, more broadly about social relationship marketing, is to better align a marketing campaign, which involves consumers who are friends, with communal norms. This general suggestion can also be added to related marketing training programs.

Read the full article:

Minzhe Xu, Zhihao Yu, and Yanping Tu (2023), “,” Journal of Marketing Research, 60 (2), 355–70. doi:.

Go to the Journal of Marketing Research

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Conference participants receive a digital copy of the conference proceedings approximately one week ahead of the conference.

Non-members may purchase digital proceedings by contacting customerservice@ama.org or purchase a print copy via the ���������’s official .

Winter Academic Conference | February

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Important Timeline for SIG Leaders

• July 1: Start of the New Fiscal Year
• August: ��������� Summer Academic Conference
• September 15: SIG Leadership Updates are Due to ��������� Support Center
• December: Winter ��������� Award Orders + Reception Details Due
• February: MA Winter Academic Conference
• June: Summer ��������� Award Orders Due
• June 15: Due Date for Fiscal Year Spending

SIG Guidelines and Reporting | SIG Processes | SIG Documents | SIG and ��������� Branding Guidelines | Pop-Up SIGs

Can’t find what you are looking for? Please do not hesitate to reach out to membersupport@ama.org for help.

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Every SIG has a personalized SIG Overview Document. These documents include important dates, a live budget, a list of active academic members, and a list of contacts who have previously been members or affiliated for wider outreach. Since these documents have individual budget information, they are not linked on this page. If you are a SIG Leader and need access, please contact rfickett@ama.org to resend you your SIG Document link.

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Pop-Up SIGs

Pop-up SIGs are temporary entities (formed for a period of one to three years) created to address emerging topics in marketing that typically fall at the intersection of existing SIGs or around new substantive/thematic developments in the field. The Organizational Frontlines group has been successful in holding programming and attracting members from diverse SIGs in the past and that is the pilot as a Pop-up SIG. These may transition into SIGs of their own if they have enough members at the end of three years or may be folded into existing SIGs (provided the SIG agrees to merge with the Pop-Up). It is a way for ��������� to promote new topic areas within marketing, and to highlight topics at the intersection of different sub-fields in marketing.

Pop-Up SIG Applications are approved by the Academic Council, and Pop-Up SIGs may receive a budget of up to $1,000 per fiscal year to support their efforts and programming. 

The Academic Councils reviews at their quarterly meetings.

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. 

From: Danielle A. Chmielewski-Raimondo, Ali Shamsollahi, Simon J. Bell, and Jan B. Heide, “,” Journal of Marketing.

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In general, the research suggests that appropriate governance solutions will depend on: (1) a given relationship’s specific condition; and (2) the relative levels of forbearance, decay, and learning that are contributing to it. As Chmielewski-Raimondo explains, “Consider a relationship in which learning has taken place, but which nonetheless has decayed due to a lack of maintenance efforts and encroaching disillusionment. While partners have become more familiar with one another, the relationship has been taken for granted. Managers in such a situation must make efforts to arrest decay, such as recalibrating incentive structures. In contrast, if a complete turnaround in mutual forbearance is required, customized incentives that demand in-depth interaction and coordination while also demonstrating commitment to the partner may be called for.” 
 
Alternatively, firms might find that a key relationship, while having been maintained through mutual forbearance, has yielded little new knowledge about the partner, ultimately leading to a persistently high degree of information asymmetry. Such a situation requires promoting learning that is capable of, at a minimum, closing the prevailing information gap to increase partner familiarity. This might be achieved through increasing opportunities for interaction, such as more frequent sales calls. 
 
The researchers say that relationships over time can exhibit different degrees of familiarity and indifference. “Consider the specific pathway toward unfamiliar indifference – relationships in which low levels of passive learning and high levels of forbearance decay have occurred. Such relationships are the most likely candidates for termination. Depending, however, on the actual extent of decay and information asymmetry, such relationships may be saved and maintained in a transactional state or even rejuvenated,” says Shamsollahi. The necessary recovery efforts are likely to be considerable, however, particularly for relationships on the cusp of termination. Bell adds that “A firm’s approach should leverage more elaborate customized information sharing programs such as socialization as well as customized incentive mechanisms like pledges. Such solutions are likely to be costly, so the firm should weigh the relevant investments against the likely returns from salvaging the relationship.” 
 
“By contrast, relationships in which there has been a great deal of learning and partner forbearance has been maintained will tend to possess not only stocks of patience, but also a high level of mutual understanding. In terms of relationship management efforts, there is little need for immediate, reparative action,” explains Heide. Here, firms have the luxury of employing less costly standard information and incentive programs as means of maintaining forbearance and promoting learning. These relationships are substantially less costly to ‘move up’ and may, in fact, tolerate some degree of periodic neglect.

Full article and author contact information available at:  

���������t the Journal of Marketing 

The Journal of Marketing develops and disseminates knowledge about real-world marketing questions useful to scholars, educators, managers, policy makers, consumers, and other societal stakeholders around the world. Published by the ��������� since its founding in 1936, JM has played a significant role in shaping the content and boundaries of the marketing discipline. Christine Moorman (T. Austin Finch, Sr. Professor of Business Administration at the Fuqua School of Business, Duke University) serves as the current Editor in Chief.
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As the largest chapter-based marketing association in the world, the ��������� is trusted by marketing and sales professionals to help them discover what is coming next in the industry. The ��������� has a community of local chapters in more than 70 cities and 350 college campuses throughout North America. The ��������� is home to award-winning content, PCM® professional certification, premiere academic journals, and industry-leading training events and conferences.

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When a firm changes the salesperson, relationships with customers are disrupted and threaten a company’s most valuable asset. In fact, prior studies show that relationship disruptions may create a loss of customer knowledge, diminish customers’ trust, and increase uncertainty. As a result, studies indicate that a relationship disruption leads to losses of up to 17.6% of total customer revenue. 

A new in the Journal of Marketing states that the implications of relationship disruptions are more intricate and can also be revitalizing. First, after a disruption, a new incoming salesperson and the customer become newly acquainted and can reexplore mutual opportunities. Second, a relationship disruption might create an opportunity for customers to learn about other available products if a new salesperson has different experience, industry knowledge, and product focus. Third, a new salesperson needs to devote enhanced efforts to obtain in-depth customer knowledge and build customers’ trust after a disruption, which may motivate customers to expand the relationship.  

To test our idea that relationship disruption may also have positive effects, our research team surveyed 273 purchasing managers, led in-depth interviews with 11 purchasing and sales managers, and gathered data pertaining to 2,040 B2B customers of a leading European logistics company over a four-year period. Based on comprehensive sales analytics, we discovered that relationship disruptions can decrease resale revenue (from previously sold products) by 28.1% but can also increase new sale revenue (from newly sold products) by 50.6%.  

We furthermore found that these negative and positive effects of relationship disruptions strongly hinge on the relationship prior to the disruption and how it is managed afterward. Specifically, if customers received high value from the relationship in the past and anticipate future value, they are more motivated to maintain and expand the relationship after a disruption. Furthermore, if salespeople who take over from leaving colleagues are effective relationship managers, they can further enhance customers’ motivation. In favorable conditions, a relationship disruption leads to substantially lower losses in resale revenue and higher gains in new sale revenue, leading to total revenue increases of 28.9%–41.1%.  

Our study helps managers: (1) prioritize their efforts among customers subject to a relationship disruption; (2) select activities to retain or expand business with prioritized customers; and (3) capitalize on the revitalization of customer relationships.  

First, when a relationship disruption is impending (e.g., salesperson’s resignation, retirement, or promotion), managers should analyze a departing salesperson’s customer relationships to identify financial risks and opportunities and prioritize which customers to target with retention or expansion efforts. In addition, to understand the financial impact of a relationship disruption, managers can apply quantitative predictive analytics derived from our research. The models we propose can estimate the effects of a relationship disruption on customers’ resale, new sale, and total revenues, according to the favorability of the relationship context.  

Second, our findings provide guidance for managing prioritized customer relationships and preparing them for an impending disruption. If their analyses predict a significant loss of resale revenue, managers should focus on managing the retention by fortifying this relationship in advance of the disruption. They can foster stronger firm-level ties by offering more benefits to customers (e.g., customization, discounts) or seeking to renew contracts. Managers also should sensitize incoming salespeople to the risks of resale losses and the importance of relationship building. If instead the model predicts a potential rise of new sale revenue, managers should focus on managing the expansion, including training salespeople to generate new sale revenues by reexploring needs and offering corresponding and novel products to customers. 

Third, to benefit from revitalization and growth in new business, managers might—very carefully—select customer relationships for proactive disruption, even if a disruption would not normally be impending. We strongly urge managers to avoid the conclusion that proactively disrupting an interpersonal relationship is a certain route to increased revenue. Beneficial effects for total revenues only accrue if the specific relationship context is favorable and if appropriate replacements are available. Even then, managers must consider potential unintended effects, such as demotivation among sales staff. So extreme caution is warranted here. 

Ultimately, our study serves as a reminder that existing customers’ revenue potential may not be fully realized. Managers may instruct salespeople to re-explore customer needs, even in the absence of disruptions—allowing the firm to seize new opportunities.

Read the full .

From: Christian Schmitz, Maximilian Friess, Sascha Alavi, and Johannes Habel, “,”Journal of Marketing, 84 (January).

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While some of the “snowballing” of opinions (online ratings) in the above examples may be attributable to “,” a large portion of the issue lies with the way in which online opinion is generated. That is, although raters are all too willing to express opinions about products and services ranging from products on Amazon to even their own doctors, these opinions are not free from bias. In fact, a consumer’s opinion is quite easily swayed by others. However, the extent of and the contingencies that govern this herding remain largely unknown.

A new study in the Journal of Marketing investigates the extent of herding (i.e., how consumers may be swayed by others) in online ratings as well as the distinct herding effects produced by specific in- and out-group networks (friends and the crowd). Further, our research team uncovers key rater-level and firm-level factors that attenuate or amplify herding and examines the role of ‘mixed’ opinions (i.e., disagreement between crowd and friends) on the herding effect.

What we discovered through a rigorous analysis of data from an online community (44,108 board gamers rating more than 5,138 games published by 2,206 firms over a period of 10 years, which ≅2 million observations) is that a more nuanced view of social influence is required. Specifically, we found that:

• Although herding exists in online ratings, the source matters. Consumers rely heavily on both their friends’ and the overall crowd’s opinions when rating products online. On average, crowds exert a stronger herding influence on the average rater.
  
• Brands/firms can influence online opinion through their product portfolios. In this research, we show how firms can leverage themselves in online rating environments through their product line strategy. Firms’ product portfolio strategies act as proxies for firm competence and can significantly attenuate herding both from crowd (out-group) and friend (in-group) networks. That is, the marketing mix (product strategy) can counteract social influence in online ratings.
  
• “Mixed signals,” or diverging opinions between reference groups, create herding and differentiation. Our research finds that divergence between friend and crowd ties can create herding and differentiation depending on the experience level of the rater. More specifically, we show that when the two reference groups disagree with each other, experienced raters coalesce more on friends’ ratings than with the crowd.

What do these insights mean for managers?

As an avenue for consumers to express their opinions and evaluations about products, online ratings have become a staple component of the customer experience. This research has important implications for online reputation management, online rating platform design, and product strategy.

Online Reputation Management

Our study suggests that firms can and should take advantage of herding in rating environments. Even in the absence of conventional advertising strategies, firms can leverage reputation effects in ratings by strategically targeting their review solicitations. Further, managers must be careful because herding influences are a double-edged sword. Positive word of mouth results in more word of mouth that is positive, but the reverse is also true.

Online Rating Platform Design

Our research has implications for online rating platform design. Depending upon prior product ratings and the goals of the website, friend and crowd information can be made more or less accessible. Specifically, we found that the herding effect depends on rater experience or the lack thereof. Firms should adopt a “targeted” perspective for review solicitations to get less-biased evaluations.

Product Strategy and Portfolio Planning

This research provides guidance for portfolio planning. We discovered that a firm’s product strategy could have profound positive effects on online opinion, both directly and indirectly. Firms with broader and deeper product portfolios are viewed more favorably and can counteract herding influences from both crowds and friends.

In summary, when it comes to online opinion, all herding/social influences are not equal. Context and contingencies matter!

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Read the authors’ slides for sharing this material in your classroom.

From: Sarang Sunder, Kihyun (Hannah) Kim, and Eric Yorkston, “,” Journal of Marketing, 83 (November).

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