Before booking a vacation or a hotel, the first thing most people do is to check the reviews. A comScore Inc. survey (2007) found that 24% of consumers use online consumer reviews before purchasing a product. In the context of hotels, these online consumer reviews influenced the choices for 87% of the consumers.

Online ratings and reviews are a growing form of interpersonal communication that is not only outside a firm’s control but also exerts a strong influence on consumers’ purchase decisions. These reviews are influenced by the consumer’s product experience, which consist of positive features, regular negative features, (possible) product failure, and product recovery.

However, are these reviews also influenced by other consumers’ online ratings?

Sridhar & Srinivasan (2012) hypothesized the moderating effects from other consumers’ online ratings on the effects of a reviewer’s positive and regular negative features of product experience product failure and product recovery to address product failure on the reviewer’s online product rating.

They used data from 7499 consumers who filled in all the personal information (e.g., age, membership duration) while reviewing. They collected their online ratings on a five-point scale and text reviews of 114 hotels in Boston and Honolulu, which were posted on a third-party travel website between 2006 and 2010.  They also collected information about the reviewed hotel’s class and amenities (e.g., business centers, swimming pools) and personal information

With a model they tested the different hypotheses which results supported the hypotheses. They found that the higher other consumers’ online ratings were:

• the weaker the positive effect of the positive features of product experience on a reviewer’s online product rating was.
• the weaker the negative effect of the regular negative features of product experience on a reviewer’s online product rating was.
• the stronger the negative effect of product failure on the reviewer’s online product rating was.

This would imply that consumers expect more of a product if the reviews are higher. They already expected the product to work well, so if it did, this would not ‘stand out’ and would affect the reviewers online rating less. But the negative features would also affect the reviewers rating less because these negative features did not bother the previous online reviewers that much as well considering the ratings were higher. However, if the product failed, consumers would react stronger and have a stronger negative effect, resulting in a lower online product rating. This is also logically explainable, because when the reviews are very high, you would certainly not expect to have a failure in the product.

This paper documented that online product reviewers are influenced by information provided by other online product reviewers. The findings of Sridhar & Srinivasan (2012) showed that online social influence can alter the marketing phenomena. For example, the marginal impact of product failure would be expected to be negative, but together with a superior product recovery and social influence effects, this negative marginal effect may be overturned.

The main managerial implication that this paper gives are that companies are well aware of the fact that high reviews can either strengthen or weaken the effects of product failure on a reviewer’s online product rating, companies should be well aware of the double-edged effects of high online ratings of their products. If such product failure occurs, companies can proactively contact such consumers requesting direct feedback, instead of letting them post negative reviews online.

Sources:
Sridhar, S., & Srinivasan, R. (2012). Social influence effects in online product ratings. Journal of Marketing, 76(5), 70-88.