First step in social media: Measuring the influence of online management responses on customer satisfaction

Bin Gu, Qiang Ye

Research output: Contribution to journalArticle

172 Scopus citations

Abstract

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 article, 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. Although 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.

Original languageEnglish (US)
Pages (from-to)570-582
Number of pages13
JournalProduction and Operations Management
Volume23
Issue number4
DOIs
StatePublished - Apr 2014

Keywords

  • customer satisfaction
  • management response
  • online social media
  • peer-induced fairness
  • service recovery

ASJC Scopus subject areas

  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering
  • Management of Technology and Innovation

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