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Soothing the unsatisfied or pleasing the satisfied? The effects of managerial responses to positive versus negative reviews on customer ratings and financial performance

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A Correction to this article was published on 25 March 2024

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Abstract

Managerial responses (MRs) have gained increasing attention as an important intervention strategy for addressing online customer reviews. This study seeks to answer the question of how a firm should prioritize responding to customers’ positive reviews (MR-P) and negative reviews (MR-N). We examine the differential effect of the MR-P ratio and the MR-N ratio on subsequent customer review ratings and a firm’s financial performance. Our findings show that while the MR-P ratio leads to an increase in subsequent customer review ratings and revenue, the MR-N ratio results in a decrease in customer review ratings and revenue in the short run, but contributes to improvements in these metrics in the long run. Furthermore, we find that the influence of MR-P and MR-N on subsequent review ratings diminishes among firms whose MRs contain highly similar content and firms whose competitors actively create MRs. This research not only advances our understanding of the managerial response literature but also provides valuable guidance for firms seeking to maximize the effectiveness of their MR campaigns.

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Funding

The authors gratefully acknowledge the support from: Natural Science Foundation of China (Grant No. 72172131) awarded to Professor Jun Ye. Natural Science Foundation of Fujian Province (Grant No. 2021J01038) awarded to Professor Jun Ye. Social Science Foundation of Fujian Province (Grant No. FJ2023A009) awarded to Pro?fessor Jiajun Wu. Sanming University (Grant No. 22YG13S) awarded to Professor Jiajun Wu.

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Authors and Affiliations

  1. School of Economics and Management, Sanming University, No. 25 Jingdong Road, Sanming Fujian, 365001, China

    Jiajun Wu

  2. School of Management, Xiamen University, No. 422 Siming South Road, Xiamen Fujian, 361005, China

    Jun Ye

  3. HKU Business School, The University of Hong Kong, Hong Kong, China

    Junhong Chu

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  1. Jiajun Wu
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  2. Jun Ye
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Correspondence to Jun Ye.

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The original online version of this article was revised: The Funding information section was missing from this article and should have read “The authors gratefully acknowledge the support from: Natural Science Foundation of China (Grant No. 72172131) awarded to Professor Jun Ye. Natural Science Foundation of Fujian Province (Grant No. 2021J01038) awarded to Professor Jun Ye. Social Science Foundation of Fujian Province (Grant No. FJ2023A009) awarded to Pro?fessor Jiajun Wu. Sanming University (Grant No. 22YG13S) awarded to Professor Jiajun Wu.”

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Wu, J., Ye, J. & Chu, J. Soothing the unsatisfied or pleasing the satisfied? The effects of managerial responses to positive versus negative reviews on customer ratings and financial performance. J. of the Acad. Mark. Sci. (2024). https://doi.org/10.1007/s11747-024-01010-3

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