Productions and Operations Management, Forthcoming
40 Pages Posted: 18 Jul 2012
Date Written: June 13, 2011
With the growing influence of online social media, firms increasingly take an active role in interacting with consumers in social media. For many firms, their first step in online social media is management responses, where the management responds to customers’ comments about the firm or its products and services. In this paper, we measure the impact of management responses on customer satisfaction using data retrieved from a major online travel agency in China. Applying a panel data model that controls for regression toward the mean and heterogeneity in individual preference for hotels, we find that online management responses are highly effective among low satisfaction customers but have limited influence on other customers. Moreover, we show that the public nature of online management responses introduces a new dynamic among customers. While online management responses increase future satisfaction of the complaining customers who receive the responses, they decrease future satisfaction of complaining customers who observe but do not receive management responses. The result is consistent with the peer-induced fairness theory.
Keywords: Online Social Media, Management Response, Service Recovery, Customer Satisfaction, Peer-Induced Fairness, Service Operations, China
Suggested Citation: Suggested Citation
Gu, Bin and Ye, Qiang, First Step in Social Media - Measuring the Influence of Online Management Responses on Customer Satisfaction (June 13, 2011). Productions and Operations Management, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2111716
By Craig Auker