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Online Reputation Management: Estimating the Impact of Management Responses on Consumer Reviews

Forthcoming, Marketing Science

43 Pages Posted: 13 Nov 2014 Last revised: 8 Nov 2016

Davide Proserpio

Marshall School of Business, University of Southern California

Georgios Zervas

Questrom School of Business, Boston University

Date Written: November 7, 2016

Abstract

We investigate the relationship between a firm’s use of management responses and its online reputation. We focus on the hotel industry, and present several findings. First, hotels are likely to start responding following a negative shock to their ratings. Second, hotels respond to positive, negative, and neutral reviews at roughly the same rate. Third, by exploiting variation in the rate with which hotels respond on different review platforms and variation in the likelihood with which consumers are exposed to management responses, we find a 0.12-star increase in ratings and a 12% increase in review volume for responding hotels. Interestingly, when hotels start responding they receive fewer but longer negative reviews. To explain this finding, we argue that unsatisfied consumers become less likely to leave short indefensible reviews when hotels are likely to scrutinize them. Our results highlight an interesting trade-off for managers considering responding: fewer negative ratings at the cost of longer and more detailed negative feedback.

Keywords: online reviews, management responses, reputation

Suggested Citation

Proserpio, Davide and Zervas, Georgios, Online Reputation Management: Estimating the Impact of Management Responses on Consumer Reviews (November 7, 2016). Forthcoming, Marketing Science. Available at SSRN: https://ssrn.com/abstract=2521190 or http://dx.doi.org/10.2139/ssrn.2521190

Davide Proserpio

Marshall School of Business, University of Southern California ( email )

701 Exposition Blvd
Los Angeles, CA Los Angeles 90089
United States

HOME PAGE: http://www-bcf.usc.edu/~proserpi/

Georgios Zervas (Contact Author)

Questrom School of Business, Boston University ( email )

United States

HOME PAGE: http://people.bu.edu/zg

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