What we know about online reviews — and what we don’t
Tuesday, January 31, 2017
Online reviews have now become a major information source for consumers when they make a purchasing decision even though many online review websites — including TripAdvisor and Yelp — were not established until the early 2000s. It is thus not surprising to see a high level of research activities related to online reviews.
At this point, it would be helpful if we could take stock of what is already known by identifying the streams of research efforts and point out the areas where additional attention is needed.
With that in mind, I worked with Karen Xie and Tori Richards on a literature review paper about online review research. We conducted a systematic review of the contemporary literature in seven major hospitality/tourism journals and advanced a thematic framework of online review research.
The detailed report of our analysis was published in the International Journal of Contemporary Hospitality Management, with a few brief highlights below.
Scope of the review
We adopted a systematic review approach and analyzed 67 refereed journal publications that were reported between January 2000 and July 2015 in the seven most influential hospitality/tourism journals, including the articles that were available on the journals' websites but had not actually published in the printed journals (a.k.a., "OnlineFirst" articles).
We coded and reported the literature under four themes — quantitative evaluation features (i.e., valence, variance and volume) of online reviews, verbal evaluation features (e.g., content or textual comments of the reviews), reputation features (of the reviewers) and social features (i.e., interactions among reviewers, managers and consumers).
Quantitative evaluation features
This area received the most attention from academic scholars. Research has identified a few consistent results, such as:
- Extreme ratings affect the helpfulness of online reviews.
- Positive online reviews (three stars or higher in a five-star scale) have positive electronic word-of-mouth (eWOM) effects on business performance, such as higher price, more room sales, higher revenue per available room (RevPAR) and a higher market share.
- While review valence and review volume in general have positive impacts on a business's performance, review variance has negative or moderation effects.
Future studies many consider addressing the following research questions:
- Companies now can pay online review websites to feature their business on the top of search results. Then, when consumers are exposed to those paid featured ads, will review valence, variance and volume have the same effects on consumers' purchasing decisions as if they were seen in the organic search results?
- What impacts do those paid featured ads have on a business's performance?
Verbal evaluation features
If the length of a review is measured with word counts, contradicting results were reported. Lengthier reviews, as compared to the shorter ones, are perceived as more helpful and more trustworthy by consumers but found to have negative impact on a hotel's market share. The "popular" keywords of those positive or negative online reviews have also been identified.
Accordingly, we propose the following research questions for future studies:
- Is it a review's readability, but not word counts or manipulated variables in a lab setting, that play a more critical role in influencing consumers' purchasing decisions?
- If so, how do we define a review's "readability"?
Only 13 out of 67 studies discussed the reputation features of reviewers. Certain groups of consumers are found to be more likely to share their travel experience (e.g., those who are young, highly educated and have higher incomes). The presence of personal identification information can affect consumers' perceived credibility and the helpfulness of a review.
Additional research endeavors may:
- Investigate whether consumers feel inclined to seek information that is provided by reviewers who are similar to them.
- Discover whether consumers who share similar backgrounds, travel experience and/or status on an online review website tend to submit similar ratings or posting similar comments about the same service issues.
Similar to reputation features, only 20 out of 67 studies reported the interactions between consumers and managers, even though some recent studies have concluded that managerial responses to online reviews have significant positive impacts on the helpfulness of online reviews as well as a business's bottom line.
Moreover, even fewer studies examined the interactions among consumers. Future studies may consider addressing the following issues:
- To better understand the interactions among consumers.
- To identify the best time for managers to respond to online reviews.
- To educate managers on how to strategically respond to certain types of online reviews, similar to another recent study about managerial responses.
Thematic framework of online review research
As a summary of the research themes, we also presented a visual diagram to illustrate the dynamic relationships among different players (and themes) in the online review settings. The measurable business outcomes include: consumers' trust and attitudes towards online reviews, booking intentions, customer satisfaction, customer experience, RevPAR, price and market share.
The thematic framework is expected to help industry practitioners — including operational managers and social media marketers — better understand how each critical factor may influence the effects of online consumer reviews on various business outcomes.
What do you want to know about online reviews? Please share your questions with us. Your comments may help us identify new research questions for future studies.
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