Tailoring management response to negative reviews: The effectiveness of accommodative versus defensive responses

Abstract Firms increasingly respond to online customer reviews on public platforms to influence prospective consumers and enhance profitability. This paper highlighted the importance of semantically tailoring management responses according to the content of the reviews and examined the impact of such responses on prospective consumers and future sales. Based on a field study and an experiment, we found that an accommodative response to the product failure review and a defensive response to the ordinary negative review were effective at increasing sales and enhancing consumer purchase intentions. The effect of management response was mediated by the reduced causal attribution of negative reviews to firms. Our findings furnish meaningful implications for firm interventions on online platforms.

[1]  Dwayne D. Gremler,et al.  Electronic word-of-mouth via consumer-opinion platforms: What motivates consumers to articulate themselves on the Internet? , 2004 .

[2]  James G. Maxham,et al.  A Longitudinal Study of Complaining Customers' Evaluations of Multiple Service Failures and Recovery Efforts , 2002 .

[3]  Daniel Hoechle Robust Standard Errors for Panel Regressions with Cross-Sectional Dependence , 2007 .

[4]  Michael Wooldridge,et al.  Introduction to multiagent systems , 2001 .

[5]  Georgios Zervas,et al.  Online Reputation Management: Estimating the Impact of Management Responses on Consumer Reviews , 2015, Mark. Sci..

[6]  Doga Istanbulluoglu,et al.  Complaint handling on social media: The impact of multiple response times on consumer satisfaction , 2017, Comput. Hum. Behav..

[7]  Vincent P. Magnini,et al.  Factors Affecting Customer Satisfaction in Responses to Negative Online Hotel Reviews , 2015 .

[8]  Gerard J. Tellis,et al.  Does Chatter Really Matter? Dynamics of User-Generated Content and Stock Performance , 2011, Mark. Sci..

[9]  D. Gilbert,et al.  The correspondence bias. , 1995, Psychological bulletin.

[10]  Carolien Martijn,et al.  Negativity and positivity effects in person perception and inference: Ability versus morality , 1992 .

[11]  Ko de Ruyter,et al.  In stories we trust: How narrative apologies provide cover for competitive vulnerability after integrity-violating blog posts , 2010 .

[12]  Ling Liu,et al.  Manipulation of online reviews: An analysis of ratings, readability, and sentiments , 2012, Decis. Support Syst..

[13]  David Godes,et al.  Using Online Conversations to Study Word-of-Mouth Communication , 2004 .

[14]  E. Anderson Customer Satisfaction and Word of Mouth , 1998 .

[15]  Martin Wetzels,et al.  More than Words: The Influence of Affective Content and Linguistic Style Matches in Online Reviews on Conversion Rates , 2013 .

[16]  Emin Babakus,et al.  Customer Complaints and Organizational Responses: A Study of Hotel Guests in Northern Cyprus , 2004 .

[17]  Samuel D. Bond,et al.  Why Is the Crowd Divided? Attribution for Dispersion in Online Word of Mouth , 2015 .

[18]  M. Rose,et al.  Should Hotels Respond to Negative Online Reviews? , 2016 .

[19]  S. Ramaswami,et al.  Consumers’ Responses to Negative Word-of-Mouth Communication: An Attribution Theory Perspective , 2001 .

[20]  David A. Schweidel,et al.  Online Product Opinions: Incidence, Evaluation, and Evolution , 2012, Mark. Sci..

[21]  Moshe Davidow Organizational Responses to Customer Complaints: What Works and What Doesn’t , 2003 .

[22]  Sarah J. S. Wilner,et al.  Networked Narratives: Understanding Word-of-Mouth Marketing in Online Communities , 2009 .

[23]  Arthur A. Stukas,et al.  Interpersonal processes: the interplay of cognitive, motivational, and behavioral activities in social interaction. , 1999, Annual review of psychology.

[24]  Ling Peng,et al.  The signaling effect of management response in engaging customers: A study of the hotel industry , 2017 .

[25]  Ruth N. Bolton,et al.  A Model of Customer Satisfaction with Service Encounters Involving Failure and Recovery , 1999 .

[26]  B. R. Schlenker Impression Management: The Self-Concept, Social Identity, and Interpersonal Relations , 1980 .

[27]  E. E. Jones,et al.  From Acts To Dispositions The Attribution Process In Person Perception1 , 1965 .

[28]  Suman Basuroy,et al.  How Critical are Critical Reviews? The Box Office Effects of Film Critics, Star Power, and Budgets , 2003 .

[29]  Bogdan Wojciszke,et al.  Effects of information content and evaluative extremity on positivity and negativity biases , 1993 .

[30]  Bertram Gawronski,et al.  Theory-based bias correction in dispositional inference: The fundamental attribution error is dead, long live the correspondence bias , 2004 .

[31]  Song Yao,et al.  Sequential Search with Refinement: Model and Application with Click-Stream Data , 2017 .

[32]  Kristopher J Preacher,et al.  Statistical mediation analysis with a multicategorical independent variable. , 2014, The British journal of mathematical and statistical psychology.

[33]  William L. Benoit,et al.  Accounts, excuses, and apologies : a theory of image restoration strategies , 1994 .

[34]  X. Zhang,et al.  Impact of Online Consumer Reviews on Sales: The Moderating Role of Product and Consumer Characteristics , 2010 .

[35]  Wei Wei,et al.  Customer engagement behaviors and hotel responses , 2013 .

[36]  Eric Fang,et al.  Is Neutral Really Neutral? The Effects of Neutral User-Generated Content on Product Sales , 2014 .

[37]  T. Mussweiler Comparison processes in social judgment: mechanisms and consequences. , 2003, Psychological review.

[38]  Navdeep S. Sahni Advertising Spillovers: Evidence from Online Field Experiments and Implications for Returns on Advertising , 2016 .

[39]  Ruth N. Bolton,et al.  An Experimental Investigation of Customer Reactions to Service Failure and Recovery Encounters , 1998 .

[40]  O. Ybarra Naive causal understanding of valenced behaviors and its implications for social information processing. , 2002, Psychological bulletin.

[41]  Vanessa M. Patrick,et al.  The Positivity Effect in Perceptions of Services: Seen One, Seen Them All? , 2003 .

[42]  W. T. Coombs,et al.  Information and Compassion in Crisis Responses: A Test of Their Effects , 1999 .

[43]  A. Hayes Introduction to Mediation, Moderation, and Conditional Process Analysis: A Regression-Based Approach , 2013 .

[44]  B. Gu,et al.  First Step in Social Media - Measuring the Influence of Online Management Responses on Customer Satisfaction , 2011 .

[45]  A. Mauri,et al.  Web reviews influence on expectations and purchasing intentions of hotel potential customers. , 2013 .

[46]  Jacob Hornik,et al.  Information dissemination via electronic word-of-mouth: Good news travels fast, bad news travels faster! , 2015, Comput. Hum. Behav..

[47]  K. Ohbuchi,et al.  Apology as aggression control: its role in mediating appraisal of and response to harm. , 1989, Journal of personality and social psychology.

[48]  Liselot Hudders,et al.  How to deal with online consumer comments during a crisis? The impact of personalized organizational responses on organizational reputation , 2017, Comput. Hum. Behav..

[49]  Wendy W. Moe,et al.  Measuring the Value of Social Dynamics in Online Product Ratings Forums , 2010 .

[50]  Guda van Noort,et al.  Online Damage Control: The Effects of Proactive versus Reactive Webcare Interventions in Consumer-generated and Brand-generated Platforms , 2012 .

[51]  Marcel Zeelenberg,et al.  Comparing Service Delivery to What Might Have Been , 1999 .

[52]  William Boulding,et al.  A consumer-side experimental examination of signaling theory: Do , 1993 .

[53]  Chung-Hun Lee,et al.  Toward Understanding Consumer Processing of Negative Online Word-of-Mouth Communication , 2014 .

[54]  M. Pillutla,et al.  Impact of Product-Harm Crises on Brand Equity: The Moderating Role of Consumer Expectations , 2000 .

[55]  Donald E. Conlon,et al.  Customer Perceptions of Corporate Responses to Product Complaints: The Role of Explanations , 1996 .

[56]  J. Eccles,et al.  In search of the powerful self-fulfilling prophecy. , 1997, Journal of personality and social psychology.

[57]  Zeynep Gürhan-Canli,et al.  The Effect of Expected Variability of Product Quality and Attribute Uniqueness on Family Brand Evaluations , 2003 .

[58]  Rashmi Adaval,et al.  Automatic construction and use of contextual information for product and price evaluations , 2002 .

[59]  Izak Benbasat,et al.  Product-Related Deception in E-Commerce: A Theoretical Perspective , 2011, MIS Q..

[60]  Geng Cui,et al.  Terms of Use , 2003 .

[61]  D. Ferrin,et al.  Silence speaks volumes: the effectiveness of reticence in comparison to apology and denial for responding to integrity- and competence-based trust violations. , 2007, Journal of Applied Psychology.

[62]  A. Marcus,et al.  Victims and Shareholders: The Dilemmas of Presenting Corporate Policy During A Crisis , 1991 .

[63]  Yong Liu,et al.  When do Third-Party Product Reviews Affect Firm Value and what can Firms Do? The Case of Media Critics and Professional Movie Reviews , 2012 .

[64]  Nicholas H. Lurie,et al.  Temporal Contiguity and Negativity Bias in the Impact of Online Word of Mouth , 2013 .

[65]  Richard Staelin,et al.  Identifying Generalizable Effects of Strategic Actions on Firm Performance: The Case of Demand-Side Returns to R&D Spending , 1995 .

[66]  J. Driscoll,et al.  Consistent Covariance Matrix Estimation with Spatially Dependent Panel Data , 1998, Review of Economics and Statistics.

[67]  Kevin Kam Fung So,et al.  Responding to negative online reviews: The effects of hotel responses on customer inferences of trust and concern , 2016 .

[68]  D. Ferrin,et al.  Removing the shadow of suspicion: the effects of apology versus denial for repairing competence- versus integrity-based trust violations. , 2004, The Journal of applied psychology.

[69]  A. Rao,et al.  No Pain, No Gain: A Critical Review of the Literature on Signaling Unobservable Product Quality , 2000 .

[70]  Sunder Kekre,et al.  The Squeaky Wheel Gets the Grease - An Empirical Analysis of Customer Voice and Firm Intervention on Twitter , 2015, Mark. Sci..

[71]  Seokwoo Song,et al.  An empirical investigation of electronic word-of-mouth: Informational motive and corporate response strategy , 2010, Comput. Hum. Behav..

[72]  David Godes,et al.  Sequential and Temporal Dynamics of Online Opinion , 2012, Mark. Sci..

[73]  V. Folkes Recent Attribution Research in Consumer Behavior: A Review and New Directions , 1988 .

[74]  Karen L. Xie,et al.  The business value of online consumer reviews and management response to hotel performance. , 2014 .

[75]  David M. Drukker,et al.  Testing for Serial Correlation in Linear Panel-data Models , 2003 .

[76]  Anindya Ghose,et al.  Examining the Relationship Between Reviews and Sales: The Role of Reviewer Identity Disclosure in Electronic Markets , 2008, Inf. Syst. Res..

[77]  Frank R. Kardes,et al.  Perceived Variability and Inferences About Brand Extensions , 1991 .

[78]  B. R. Schlenker,et al.  The Use of Apologies in Social Predicaments. , 1981 .

[79]  David Godes,et al.  Firm-Created Word-of-Mouth Communication: Evidence from a Field Test , 2009, Mark. Sci..

[80]  Richard E. Petty,et al.  Contextual contrast and perceived knowledge: Exploring the implications for persuasion☆ , 2007 .

[81]  J. Robbennolt Outcome Severity and Judgments of “Responsibility”: A Meta‐Analytic Review , 2000 .

[82]  Christopher M. Snyder,et al.  The Influence of Expert Reviews on Consumer Demand for Experience Goods: A Case Study of Movie Critics , 2005 .

[83]  Raji Srinivasan,et al.  Social Influence Effects in Online Product Ratings , 2012 .